More Americans are struggling to pay the bills. Here's who is suffering most.

More Americans are struggling to pay their household bills compared with a year ago, but the rise in hardship isn't hitting all groups equally. 

Older workers and people over 65, who are largely retired, have experienced the sharpest rise in financial hardship among all age groups compared with a year earlier, according to an analysis of U.S. Census data. 

The share of people 55- to 64-years-old who said they had difficulty paying their bills in the last seven days rose 8 percentage points in late April to early May versus a year ago. A startling 37% of people in that age group report finding it somewhat or very difficult to handle their financial obligations. Almost 30% of seniors, or those 65 years and older, are struggling to pay their expenses, a 7 percentage point jump from a year earlier. 

Generation gap

Financial hardship is rising across most age groups after two years of high inflation that continues to strain household budgets. The impact has been hardest on older Americans, partly because older workers failed to receive the boost to wages that lifted the earnings of younger employees during the pandemic and as Social Security checks for seniors have lagged inflation, experts say.

"The youngest consumers are most likely to be the beneficiaries of a rising wage environment," noted Charlie Wise, senior vice president and head of global research and consulting at TransUnion. "Many baby boomers are retired and they are on fixed incomes, and they aren't keeping up with inflation the same way young consumers are."

To be sure, the share of younger Americans struggling to pay their bills has risen as well, but data shows that older people experienced the sharpest increase in financial distress during the past year. The highest share of people struggling to pay the bills is to be found among 40- to 54-year-olds, at 39%. But that is up only one percentage point from a year ago, a much smaller jump than for older Americans.

The share of 25- to 39-year-olds who are having trouble with their financial obligations actually improved slightly, falling from 35% a year ago to 34% today.

Older Americans are also more pessimistic about the economy and their personal finances  than younger consumers, TransUnion found in its most recent quarterly study of consumer health. Only about 3 in 10 baby boomers expect their incomes to rise in the next 12 months, compared with almost 7 in 10 millennials and Gen-Zers. 

"Baby boomers aren't facing the prospect of material wage gains or new jobs that will put more money in their pockets," Wise said. 

SNAP cuts

Low-income older Americans are getting hurt not only by inflation, but also from the end of extra food-stamp aid in March, which impacted 30 million people enrolled in the Supplemental Nutrition Assistance Program, or SNAP, according to the Senior Citizens League, an advocacy group for older Americans. 

The worst-hit of all groups were older Americans, with some experiencing a drop in benefits from $281 a month to as little as $23, anti-hunger groups said.

Although inflation is ticking down from its peak a year ago, "There has been relatively little significant change in the financial pressures [seniors] are reporting," Mary Johnson, Social Security and Medicare policy analyst with the Senior Citizens League.

"Food costs are still ranked as the budget category that increased the fastest over the past 12 months by 62% of survey respondents," she added. "Housing was ranked the fastest growing by 22% of survey respondents."

Inflation is a top concern for all consumers, but it's especially burdensome for older Americans, Wise said, noting that younger Americans "are able to shift their spending, cut back on discretionary spending."

He added, "For older consumers, more of their income goes to non-discretionary things, like health care costs. That's why more of them are having trouble."

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