Insights into the Debtor Atlas: Number of over-indebted consumers only drops slightly


Germany groans under serious financial problems: According to data from Creditreform, every tenth consumer suffers from excessive debt burdens nationwide. The biggest problems are not just smoldering in the East.
The job market is booming, the economy has so far withstood all downside risks, but the financial situation of many private consumers continues to be in trouble: the number of over-indebted persons in Germany fell again this year for the first time in five years – albeit only slightly.

Currently some 6.92 million consumers are not able to pay their bills, the credit agency Creditreform said. This is a total of just under 10,000 debt cases less than in the previous year, it says in the notes to the "Debtor Atlas Germany 2019".

All in all, the nationwide debtor ratio remains unchanged: in addition, for every tenth adult, total expenditure is consistently higher than revenue. The nationwide average fell from 10.04 percent in the previous year to currently 10.00 percent.

The highest level of over-indebtedness among the federal states last year was recorded with just under 14 percent in Bremen, followed by Saxony-Anhalt and Berlin. The lowest was over-indebtedness in Bavaria (7.43 percent) and Baden-Wurttemberg (8.31 percent).

By far the largest number of borrowers, Creditreform – in absolute figures – was not in the East, but in the two most populous federal states, North Rhine-Westphalia and Bavaria. In NRW, around 1.75 million people can no longer meet their financial obligations. In the Free State, on the other hand, Creditreform currently has around 790,000 cases of over-indebtedness.

For comparison: Bremen comes despite the highest percent share only to around 80,000 over-indebted consumers. For Saxony – the comparatively weakest East German federal state – the economic information determined 340,000 over-indebtedness cases.

The main reason for the slight decline in over-indebtedness figures seen the experts of Creditreform in the good development in the labor market in recent years. However, it is to be feared that the positive trend will only be short-lived, as the economic conditions in Germany have clearly deteriorated in recent months.

Alarming trend among seniors

Against the trend, the age over-indebtedness increased significantly in 2019: the number of persons over the age of 70 who could no longer pay their bills rose by 44.9 percent to around 380,000 within only twelve months. Among 60- to 69-year-old consumers, the number of over-indebted individuals increased by 15.3 percent to 640,000.

Even more dramatic is the development in a comparison with the year 2013. Since then, the number of over-indebted seniors from 70 years have increased by 243 percent. Here, the pension reforms of the past decades, which almost always aimed at a reduction of the security level of the statutory pension, made themselves noticeable, it says in the Debtor Atlas. In addition, the growing number of unsteady employment biographies and the growth of the low-wage sector had an impact.

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