Debt and mental well-being among older adults: does employment status matter? Combining population inference and target trial frameworks

While debts are widely used financial tools, few longitudinal studies investigating potential causal links between debts and mental wellbeing exist among older adults. Older adults, particularly those not employed, are less likely to have increasing incomes to help them pay off their debts. This study investigates whether older adults with non-mortgage debts in three different labour market states have lower mental wellbeing and, separately, whether it is likely that reducing their debts helps to improve mental wellbeing. Using the English Longitudinal Study of Ageing, the study focuses on the English context, which is particularly interesting due to the high levels of, and a unique policy approach to, private indebtedness. The results indicate that people with debts have lower mental wellbeing (more depressive symptoms and lower quality of life) in all categories, but the mental pain linked to debts is stronger for people who are jobless (not working, not retired). The analysis from a causal perspective suggests that getting rid of debts may reduce depressive symptoms among people who are jobless but may also improve quality of life among the retired and employed. Both these findings suggest that mental health services should work closely with debt advice when needed.