Differences in financial health increase among European consumers

As European economies struggle to cope with the effects of the second wave of the coronavirus, Intrum’s Financial Wellbeing Barometer highlights the disparities in financial wellbeing among consumers across the continent. While pre-existing household debt and financial instability have been aggravated by the pandemic in southern Europe, stimulus measures appear to have protected household incomes in countries like Germany.

The Financial Wellbeing Barometer, which measures and presents an aggregated score on financial wellbeing for consumers across 24 countries, finds that Germany retains its top position from 2019, followed by Austria and Estonia, while Spain, Italy and Greece have fallen in the rankings.

Anette Willumsen, Managing Director CMS Sales & Service Development and Markets at Intrum said “It is evident that households in countries that already suffered from financial instability and high unemployment rates going into the pandemic have been worse off in terms of financial health as we leave 2020 behind. This past year has stressed the importance of having a financial safety net, and going into the new year, it is vital that households take additional measures to better manage their personal finances.”

Italy has seen a sharp decline in the ranking, as heavy contractions in employment levels in April and May hit incomes hard, hampering consumers’ ability to pay on time.

As some sectors have been hit harder than others, Spain, whose workforce relies heavily on tourism, have seen household’s abilities to save for the future restricted. In combination with declines in the financial literacy performance of respondents, the country’s score has slid from the previous year’s ranking.

Willumsen concludes “Our research suggests that it is easier for some to achieve financial security than others due to individual financial circumstances and the broader macroeconomic landscape. There is no silver bullet, but nonetheless, with financial education and guidance from both public institutions as well as financial services firms, consumers are enabled to make better decisions when it comes to one’s personal finances.”