Rising living costs put more consumers in financial distress in Germany. “The number of over-indebted households will increase” said Patrik-Ludwig Hantzsch, head of Creditreform’s economic research, to the Handelsblatt.
For 2024, the credit agency expects a “significant increase” in private insolvencies. On the one hand, the “financial stress” for people in lower income groups is increasing gradually. “They must spend a significant part of their money on daily necessities, rent, energy, and food.” These basic necessities have “experienced a significant price increase.”
On the other hand, there are increased risks for young consumers. They will “more frequently experience over-indebtedness” said Hantzsch. Small installment loans and so-called “buy now, pay later” offers are already “very low-threshold” and many high earners often struggle with the burden of additional loans.
Next year, people may be confronted with further financial risks. The factor of “unemployment” will play a greater role again in 2025, said the Creditreform expert. “Especially well-paid jobs in the industry, the automotive sector, or the chemical industry are on the brink.”
Many people fear that they can no longer pay their living costs. A survey of 1,001 people aged 18 and over by the Forsa Institute on behalf of the Consumer Protection Association (VZBV) shows this. A quarter of the respondents (27%) said they would have to rely on savings, overdraw their checking account, or use other financing options in 2025.
VZBV expert Jutta Gurkmann criticized the lack of transparency in price increases: “What we need is a price monitoring agency that uncovers unfair practices and protects consumers from high prices in the supermarket” she said.