Rising Number of Germans Face Financial Hardship as Schufa Reports Increased Payment Issues

A recent survey conducted by Schufa, Germany's leading credit bureau, reveals a significant increase in the number of individuals experiencing financial difficulties. The data indicates a 13 percent rise in reported payment disruptions during the first three quarters compared to the previous year, highlighting growing challenges among German consumers in meeting their financial obligations.

The survey found that a growing proportion of people in Germany are struggling to make timely payments on rent, loans, and other financial commitments. Payment delays, overdrawn bank accounts, and missed credit installments have become more prevalent. Buy-now-pay-later (BNPL) services, in particular, have seen a spike in late payments, with nearly half of users in the past six months incurring reminder fees due to overdue credit payments.

According to Schufa, approximately one in ten respondents has been unable to pay due rent or installment payments--a record high since the organization began tracking the data in 2020. The study also notes a ten percent increase in the number of people taking out loans within the last six months compared to the previous year. These trends are particularly pronounced among individuals with lower incomes and young adults. Fourteen percent of respondents with a household net income below 2,000 euros reported suspending rent or installment payments in the past half-year. Among all participants, one in three admitted to delaying payments, and one in four had overdrawn their account.

Young adults aged 18 to 24 are especially affected, with 46 percent indicating they had postponed bill payments and 36 percent reporting that they had exceeded their account limits. The findings underscore the mounting financial strain on younger generations, who are increasingly reliant on credit and flexible payment options.

The survey also sheds light on the psychological impact of these financial pressures. Nearly two-thirds of respondents expressed concerns about their future, mirroring figures from the previous year. A quarter of those surveyed indicated that further increases in the cost of living, particularly for energy and food, would compel them to take out a loan. Similarly, 23 percent said they would consider borrowing to maintain their standard of living. These numbers represent a noticeable uptick from the previous October, reflecting growing anxiety about personal finances.

Furthermore, 23 percent of respondents reported having no financial reserves, while an additional 18 percent had already depleted their savings. Thirty percent feared that their existing reserves would not suffice to offset continuing price increases. Only about a quarter felt adequately prepared to manage further cost escalations.

Consumer insolvencies are also on the rise. Data from Creditreform, a business information provider, indicates that the number of consumer insolvency proceedings in 2024 reached 72,100--an 8.5 percent increase over the previous year. The main drivers identified are rising living costs and higher interest rates on loans, which are placing additional strain on household budgets. The ongoing reduction in well-paid jobs has further exacerbated the situation, according to Creditreform.

The findings from Schufa and Creditreform collectively point to a growing financial vulnerability among German consumers, particularly those with lower incomes and younger adults. As economic pressures persist, the ability of households to manage debt and sustain their standard of living remains a pressing concern.