Over-indebted people need 38% of their household income for housing expenses

For comparison: for the total population this share is 22%

Press Release # 217 of May 25, 2022

WIESBADEN – In 2021, the household of an over-indebted person seeking help from a debt counseling center had an average net income of 1,368 euros per month. With an average of 520 euros, the cost of the apartment including energy and related costs accounted for 38% of the household income. If only the debtor’s own income of 1,146 euros is taken into account on average, then the housing costs amounted to as much as 45%. As the Federal Statistical Office (Destatis) also reported on the occasion of the debt counseling campaign week from 30 May to 3 June 2022, housing costs for over-indebted people were higher than average: according to the latest data from 2020 to 22%.

Rent arrears are not the most common reason for debt counseling

Although rental expenditure was an important item in the budget, only one in five (20.3%) in 2021 had open obligations with their landlord. This is probably due to the fact that due to the drastic consequences of rent arrears, rent is paid first and other obligations are serviced more subordinately. In 2021, the rent arrears for affected persons receiving counseling averaged 4,401 euros, more than eight times the monthly housing costs. In relation to the average total debt for all over-indebted people in counseling (EUR 31,087), rent debt was 14%.

Debt counseling with public creditors was provided far more frequently than with rent arrears. This applied to more than half (57.2%) of the counseling cases. Public creditors include e.g. statutory pension and health insurance providers as well as the Federal Employment Service or its job center, tax offices are not included. Over-indebted people were also much more frequently advised about arrears with telecommunications companies than about lack of rent. This applied to almost half of all cases (48.9%).

The main trigger for excessive indebtedness is usually the loss of a job

In total, almost 575,000 people sought help from a debt counseling center in 2021. The main reason for excessive indebtedness was job losses (19.9%). However, other external events such as illness, dependence or accidents (16.9% in total) or separation, divorce and the death of a partner (12.2% in total) often led to critical financial situations. Every tenth person advised was indebted due to long-term low income (10.0%).

Methodological notes:

The results of the debt service statistics for 2021 are based on information from 593 of the approximately 1,400 debt counseling centers in Germany. They provide anonymous data from about 147,000 people who have been notified with their consent. Participation in these statistics is voluntary for both the counseling centers and those seeking counseling. The reported data is then extrapolated to the total population of persons advised by debt counseling centers.

The data on the share of housing expenditure in the disposable household income for the total population comes from the Survey of Income and Living Conditions in Europe (EU-SILC). These are the final results for the year 2020. This study has been integrated into the micro-count as a subsample since the study year 2020. Detailed information on the changes and effects of the redesign and the Corona crisis is available on a dedicated website.

The term housing costs refers to the monthly costs associated with the household’s right to live in the apartment (for owners: property tax; for tenants: rent payments). The additional costs (water, electricity, gas and heating) due to the actual use of the apartment are also taken into account. In addition are included: expenses for the maintenance of the apartment or house, mortgage interest (for owners), insurance contributions (for owners; for tenants if they bear the costs) and other costs such as waste collection and street cleaning.

More info:

Detailed data and time series can be found in the tables of debt statistics (63511) in the GENESIS databaseOnline be retrieved.

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