For the third consecutive year, the number of households that have experienced payment problems has increased. The risk of many more people ending up in financial difficulty has never been greater.
Around 7% of households in Norway are struggling with bills. This is an increase from 5.3 percent in 2011, and twice as many as in 2008, which was the all-time lowest level, at 3.6%. These are among the findings of the Consumer Research Institute (Forbruksforskningsinstituttet – SIFO) report ‘Economic vulnerability 2016’.
‘These aren’t the highest numbers we’ve had, but the trend is upward. The most alarming thing is that Norwegian households have never been so at risk as they are now,’ said researcher, Christian Poppe, to the news agency NTB.
‘Currently, the economy of Norway is very good. Should it change, there is huge potential for crisis for very many, for example, from unemployment or due to higher interest rates’, added Poppe.
When people have payment problems, four out of ten say it’s because they lost track of the economy.
‘The everyday Norwegian economy has become very complicated compared to what it was previously. The ‘cash flow’ in and out of all households is larger and faster’, said Poppe.
Low interest rates have long led to an increase in the debt ratio in Norway, which can quickly become problematic if the interest rate rises. Already, three out of ten people who have payment difficulties answered that mortgage is a major cause.
In many cases, it is great ‘life-events’ that trigger payment problems. One out of three people said ‘unemployment’, while one in four said they were having problems due to ‘sickness or disease’, and one in every six is struggling with their economy after a ‘relationship breakup’.
‘The combination of a lack of transparency, and such life changes, makes many people particularly vulnerable, especially if they are experiencing a significant decline in revenue and increased spending simultaneously’, said Poppe.