Mixed picture for European households
European consumers are largely upbeat about the economy, but a large portion of households nevertheless struggles with debt and needs to borrow to pay their bills on time. The 2018 edition of the European Consumer Payment Report reflects a stronger European economy through people’s view of their own and their countries’ economic prospects.
The number of people that manage to save every month has increased from 50 to 59 percent and the portion of respondents that think they will be better off than their parents has increased from 37 to 40 percent.
Yet many individuals and families struggle to make ends meet and pay their bills. Easier online and round-the-clock shopping and pressure from social media to always sport the latest fashion has been a factor in making the number of people that borrow in order to pay their bills jump from 15 to 20 percent in 2018 compared to 2017.
Families make up a substantial part of this group and 28 percent of parents say they have borrowed in order to buy something for their kids.
“It is positive that more Europeans experience an improved financial situation but the growing number of consumers who struggle financially deserve more attention. That many consumers need to borrow money to pay their bills – during a period of economic growth – indicates vulnerability to economic downturns, as well as any hikes in interest rates,” says Michael Ericson, CEO & President of Intrum.
Three out of four parents believe that the education system has a larger role to play in teaching their children about finances, although eight out of ten of them already try to do that on their own. They possibly do so with an eye to the future as the report finds that private finances can be a barrier to young Europeans leaving the nest and establishing their own home.
The ongoing Brexit process also worries consumers: 42 percent feel that a weakened European Union might have a negative impact on their personal finances.