Surging inflation has created a wave of financial anxiety as households are struggling to balance their income and expenditure. Intrum’s annual European Consumer Payment Report (ECPR), surveying 24,000 consumers about their financial situation, shows that more than eight in 10 are worried about rising grocery and energy prices.

One in three respondents believe they will not have enough money to pay their utility bills in the next 12 months and a similar proportion say they have already missed a bill over the past year.

“After many years of low inflation and loose monetary policy, soaring prices and rising interest rates have made European consumers deeply pessimistic about the future. Many consumers who were relatively unaffected during the pandemic are today feeling the impact. The cost shocks will have a significant impact on consumer spending patterns, increasing the risk of default on lower priority obligations,” said Andrés Rubio, Acting President & CEO of Intrum.

Creditors can expect growing levels of late and non-payments
Six in 10 respondents are changing how they spend money, with an equal share claiming to be increasingly aware of unnecessary costs. Consumers who are changing their behaviour are cutting back on meals out, which is bad news for the hospitality sector and other leisure sectors that were starting to regain their footing after the impact of Covid. Younger consumers are feeling the pinch too in their social lives and are more likely to be using buy now, pay later (BNPL) solutions to cover the growing cost. Thirty-one per cent of the Gen Z cohort, who are in their late teens and 20s, say they increasingly do this.

Among consumers who expect to miss bill payments in the next 12 months, most say they are likely to default on e-commerce and online store bills. These findings are supported by the latest data from the European Banking Authority (EBA) Dashboard, which shows that the ratio of stage 2 loans has been on the rise, indicating that a greater number of defaults could follow.

Most believe high inflation will last for years, despite government intervention
More than half of respondents expect inflation to continue for years, suggesting little faith in their leaders’ ability to bring prices under control. The economic uncertainties are also causing a majority, six in 10 respondents, to worry that they are not saving enough for the future and will not be able to retire comfortably.

One way for consumers to battle the gloomy outlook for their personal finances is to increase household incomes, and three in 10 respondents indicate that they will soon ask for a pay raise. This rises to 41 per cent among respondents with young children.

“Although we have not yet seen the ‘doom loop’ of a wage-price spiral in Europe, the relatively high share saying they will demand a pay increase indicates that consumers’ patience with falling real wages is diminishing. This will focus even more attention on central banks’ ability to control inflation” Rubio concludes.

About The European Consumer Payment Report 2022
The European Consumer Payment Report 2022 is an instrument for gaining insight into European consumers’ everyday lives, their spending and ability to manage their household finances on a monthly basis. The report is based on an external survey conducted by Longitude in 24 countries in Europe. A total of 24,011 consumers participated in the 2022 edition of the survey. The fieldwork for the study was conducted between July and September 2022.

The full European Consumer Payment Report 2022 will be available for download on intrum.com/ecpr2022 on 24 November. 

For further information, please contact: 
Kristin Andersson, PR & Media Relations Director, Mature & Emerging Markets
+46 (0)705 85 78 18
kristin.andersson@intrum.com

Karin Franck, PR & Media Relations Director, Strategic Markets & Scandinavia
+46 (0)709 78 72 74
karin.franck@intrum.com