National Grandparents Day is getting closer and this is a tremendous opportunity to think of the financial condition of the elderly ones in Poland. Unfortunately, it is not getting better—elder Poles are getting more and more in debt. KRUK Group itself has been conducting over 190 thousand cases concerning people over 67, and their collective debts amount to 901 million zlotys. This is 136 million zlotys more than the previous year.
Even though the number of cases considering elderly people has decreased in the previous year, the total amount of their debts has increased. An average debt of a Polish elderly amounts at the moment to PLN 5,500 and is PLN 1,000 higher than last year. Older people usually have debt obligations towards banks and other financial institutions, phone service providers, and insurers. The largest number of seniors in debt is in Silesia.
As in previous years, the highest amounts of debts are noted amongst the Silesian elder ones. Over 30.5 thousand of cases, amounting to 170 million zlotys come from Silesia. This means that the average debt of an older person in Silesia equals more than 6.5 thousand zlotys. The situation in Mazovia is not much better. Over 23.5 thousand 67+ citizens of that voivodship is in debt for the total sum of approximately 113 million zlotys. The average debt of a Masovian senior is 6140 zlotys.
The least indebted seniors live in Podlasie voivodship. Their total debts amount to just over 13 million zlotys, which gives on the average only about 4.5 thousand per person. KRUK Group notes also infamous record-holders. The senior who is in the deepest debt lives in Masovian voivodship, and his liabilities amount to 8.5 million zlotys.
'Financial capabilities of the elderly in Poland is not getting any better. That is why we should use the opportunity and talk about this problem on the National Grandparents Day to find out how, as the people closest to the indebted, we could help them,' says Karolina Barańska from KRUK Group.
Why the elderly get into debt?
According to KRUK Group data, older people usually tend to fail to pay the instalments of loans given by banks and other financial institutions. More often than not, older people do not pay their phone bills and insurance premiums. In the scope of the survey conducted by TNS Polska to the order of KRUK Group, it should be no surprise.* Nearly half of the seniors (46%) feel their financial status is poor, and only 5% find it proper. Moreover, more than 44% of the surveyed said that their money did not last until the end of the month, and another 14% had problems with balancing home budget.
That is why it is so important to plan your expenses, especially when the income is small, as it often happens with the elderly ones. The survey show as well, that seniors rarely control their home budgets. Almost half of the surveyed (46%) admitted that they did not keep any records of their expenses, neither they controlled the amount of money at their disposal. What is more, in order to improve their condition, seniors gladly use different forms of crediting. Almost half of the surveyed (43%) have borrowed money in the last 5 years—28% have taken credits, and 31% have decided to instalment purchase.
'The gratitude towards our Grandmas and Grandpas should also come in the form of a real support. And I do not necessarily mean material support. Sometimes it's enough to help them with our knowledge on financial matters, analyse a credit agreement with them before they decide to sign or explain the complexity of rental charge. Older people often fall victim to the “fine print” or various kings of advertisement,' says Karolina Duniec. If the debt has already arisen, the key issue is to deal with the situation. We could, for example, help the elderly to contact the company operating their debt. Another important aspect is to analyse the budget and working on the habit of controlling expenses. There are plenty of tools allowing us to plan home budget—from spreadsheets, through dedicated software, to smartphone applications. Yet sometimes the simplest solutions are the best—just start writing down the expenses planned and incurred in each month in a notebook. This will give you a better view of the situation and allow to plan some savings.
* A survey to the order of KRUK Group was carried out by TNS Polska in January 2014 in a representative sample of 1,000 people over 65.