In sum, however, this means that every tenth adult in this country is still over-indebted and has sustained payment problems, as it is called in official German. "Poverty and over-indebtedness have many facets and are more widespread in Germany than many are familiar and agreeable," comments Michael Bretz, the head of economic research at Creditreform.
Older consumers are increasingly affected. "The age over-indebtedness continues to increase significantly," says Bretz, who speaks in this context of a "worrying development". Above all, in the age group of 70 years and over: a good 380,000 people from this district are now overindebted, 44.5 percent or 118,000 more consumers than in the previous year, where the plus was also 69,000 cases.
And in the case of the 60- to 69-year-olds, too, the number of those affected has risen sharply in the past twelve months: by 85,000 cases or the equivalent of 15.3 percent to 640,000 consumers. There is also growth among the 50- to 59-year-olds. In this age group, 1.23 million consumers are now over-indebted, 4.9 percent more than in the previous year.
Drastic increase in over-indebtedness in the age group U-70
In a multi-year comparison, this development is even more evident, especially among the elders in society. For example, the number of cases in the age group U-70 between 2013 and 2019 increased by a whopping 243 per cent, albeit from a comparatively low level. By comparison, the total number of over-indebted individuals has increased by only five percent in these six years.
Those affected therefore have to make a living to earn a living and continue to work at retirement age, as Creditreform puts it – often in so-called atypical or marginal employment relationships. In addition, there are more and more older consumers for the daily supply of food to the panels. According to Tafel Germany, the number of seniors registered with a pension or basic security has increased by 20 percent within a year.
According to experts, there are several reasons for the strong trend towards poverty reduction and over-indebtedness, ranging from the growth of the low-paid sector to changes in the employment biographies. But the main reason Creditreform has identified the pension reforms of the past 20 years. They almost always aimed at reducing the level of coverage of the statutory pension in order to stabilize the contribution rate.
"Now, the level of benefits of the pension insurance many consumers apparently no longer enough," says economist Bretz and refers to an information from the federal government, according to which last year 51 percent of pensioners have received less than 900 euros per month. And a large part renounces other social benefits, as a study by the German Institute for Economic Research in Berlin (DIW) shows.
According to this, more than one million pensioners in this country are entitled to state support, but only 566,000 senior citizens actually receive a basic pension in old age. The reason for this, according to the investigation, is above all shame and ignorance.
In addition, additional revenue is urgently needed, even for the rent. "At least in German cities, housing has become a risk of poverty, in any case an overindebtedness trigger," states the Creditreform Debtor Atlas. As a matter of concern is already a Mietbelastung amounting to 30 percent of household income, problematic it will be from 40 percent.
And there pensioners are particularly affected. "The gap between retirement income and rents is increasingly diverging," it says at least at the DIW. And as you get older, getting out of the downward spiral becomes particularly difficult. "Because when you retire, the chances of older people drastically decrease to improve their economic situation," explains Creditreform expert Bretz.
Younger people, however, have been able to escape the debt trap many times. "The over-indebtedness of the younger groups continues to decline noticeably," reports Creditreform. Especially for consumers under 30 years. The currently still 1.42 million cases mean a loss of over ten percent or the equivalent of 167,000 cases compared to the previous year.
"This development is evidently in line with the development of the youth unemployment rate in Germany, which fell to its lowest level in 25 years in 2018." But even among the 30- to 39-year-olds, the population group with the highest over-indebtedness rate, is the number Cases fall: by three percent or 58,000 cases to 1.85 million sufferers. Finally, among the 40- to 49-year-olds, the decline is 3.2 percent or 47,000 cases, with a total of 1.41 million people at the end.
In total, the affected push a debt mountain of 202 billion euros in front of him, lists the debtor Atlas. Responsible for the slippage of private individuals in acute financial need there are mainly six reasons, the so-called Big Six, as the industry is: unemployment, illness / addiction / accident, inefficient housekeeping, separation / divorce / death, a failed self-employment and a longer-term low income. Together they account for around 81.5 percent of over-indebtedness cases.
The trigger illness / addiction / accident and uneconomic household management have increased significantly in the past year. The latter, also referred to in professional circles as "irrational consumer behavior", is seen as a gradual entry into an over-indebted spiral. "Obviously, consumer reluctance and spending prudence have suffered many consumers in the face of continued rising wages and job security," commented expert Bretz.
Geographically, as in previous years, hardly anything has changed. Most debtors are located in the city states: Bremen, Berlin and Hamburg each come in excess of debt in the double-digit percentage range. Also high are the quotas in Saxony-Anhalt and North Rhine-Westphalia, as well as in Saarland and Schleswig-Holstein. The lowest value in the federal state ranking is in Bavaria. With just 7.3 percent, it is almost half as high as that of taillight Bremen.
Second place is followed by Baden-Wurttemberg with a quota of 8.2 percent. Behind it are Thuringia, Saxony and Brandenburg. In any case, development in the East is much better than in the West. "In the last two years, the basic trend has reversed," says Bretz. "While the number of over-indebtedness falls in the East for the second time in a row, it continues to increase in the West."