How is your financial situation now

Bleed, drained: For many people, the financial situation has worsened

From an economic point of view, the signs are slowly pointing to recovery. The aftermath of the crisis will keep people busy for longer. The labor market will not recover until 2023 at the earliest, and the wave of bankruptcies among companies and private individuals is only just beginning.

Financially, many got into financial difficulties with the pandemic because they had to accept a loss of income due to short-time work or lost their jobs. Data from the OECD and the Economic Research Institute (Wifo) show that wages in Austria fell in real terms by 0.7 and 0.8 percent respectively in the previous year. Since mid-2020, it has been increasingly affecting people from the classic middle class, as the managing director of the Lower Austria debt counseling, Michael Lackenberger, explained these days.

Against this background, the results of a new representative survey are hardly surprising. With regard to their own finances, pessimism among Austrians has grown considerably. In the "Liquidity 50 plus" study by the German team bank, 37 percent of those surveyed saw their financial situation deteriorate due to the corona crisis.

This means that 64 percent still rate their situation as good to very good. In the previous year, however, it was 17 percentage points more. Overall, the liquidity barometer, which has been determined for the sixth time and takes into account both the current situation and future expectations, has reached its lowest level this year. Compared to the previous year, the barometer lost more than a third. The time of the survey, which the market research institute Yougov carried out among 1,331 people between the ages of 18 and 79, probably plays a role in the assessment: In February 2021, the prospects were not great, hardly anyone was vaccinated, lockdown followed lockdown. It seemed like the pandemic would never go away.

Seen in this way, the number of optimists is downright high: after all, half of the citizens expected an improvement in the future. But the same applies here: It was better before. A year ago it was 53 percent. The index is currently at 17 points. A clear drop compared to the previous year, when the barometer still recorded 28.60 points. The previous high was reached in 2016 with 34.18 points. Even if it is repeatedly emphasized how very young people are suffering from the crisis, at least this is not financially reflected in this survey: If you take a closer look at the age groups, it is apparently more difficult for the elderly to understand the negative effects of the pandemic to withdraw.

The 50 plus generation suffers the greatest slump in sentiment when looking at their finances. Only 61 percent rate their financial situation as positive - 24 percentage points less than in the previous year. The liquidity index for this age group slipped from 21.05 points in 2020 to currently only 7.5 points. The slump among the over 30s is not quite as dramatic, but here too the mood is cooling down. For comparison: the index for the under 30 year olds fell by only 2.7 to 29.25 points. Clemens Mitterlehner, managing director of ASB debt counseling, has a few explanations: In the 50 plus age group, more people were probably worried about their existence. The fear of having no chance of re-entering the labor market if a job is lost is certainly great.

The issue of unemployment also comes up in debt counseling. In the previous year, 38 percent of those seeking advice were unemployed. Even if the largest proportion of debt is found among 31 to 40-year-olds, the debt level is highest among those over 51-year-olds. "With interest and compound interest, 20,000 can quickly turn into 60,000," says Mitterlehner. In addition, there are failed self-employed. You already make up a large group in the counseling centers. "If someone founds because he cannot find a decent job, a company will be on shaky legs anyway. In times of crisis, they quickly buckle," says Mitterlehner.

Women particularly affected

For Wifo researcher Christine Mayrhuber, the bad mood in the 50 plus group can at least be explained by the 50 to 64 year olds. She was and is severely affected by unemployment, especially for women. "Women earn less anyway. If they lose their jobs, they have 40 percent less net in their accounts." But men in this age group are also particularly affected by long-term unemployment.

It looks different with the over 65-year-olds. At three percent, the increase in pensions was well above wage growth. "The pensions were on the safe side and a stabilizing factor," says Mayrhuber and is more concerned about the young people: young professionals are badly affected by the crisis. (Regina Bruckner, May 14, 2021)