Over-indebtedness and financial exclusion statistics

From Statistics Explained

Data from September 2012. Most recent data: Further Eurostat information, Main tables and Database.

This article takes a look at the financial situation and perspectives of households in the European Union (EU), with a particular emphasis on debt and financial exclusion. It is based on data from the EU statistics on income and living conditions (EU-SILC) 2008 ad-hoc module on ‘Over-indebtedness and financial exclusion’.

Figure 1: Proportion of the population in a critical situation with respect to arrears and outstanding amounts by poverty status, 2008
(% of specified population) - Source: Eurostat 2008 ad-hoc module 'Over-indebtedness and financial exclusion'

Main statistical findings

Persons living in a household with arrears or outstanding amounts

Table 1: Proportion of the population that owed money by type of imbalance/arrears and size of the owed amount, 2008
(%) - Source: Eurostat 2008 ad-hoc module 'Over-indebtedness and financial exclusion'
Figure 2: Proportion of the population with a bank current account and an overdraft by poverty status, 2008
(% of specified population) - Source: Eurostat 2008 ad-hoc module 'Over-indebtedness and financial exclusion'
Figure 3: Proportion of the population with credit and/or store card(s) and card overdraft by poverty status, 2008
(% of specified population) - Source: Eurostat 2008 ad-hoc module 'Over-indebtedness and financial exclusion'
Figure 4: Proportion of the population that reported a drop in income in the previous 12 months by poverty status, 2008
(% of specified population) - Source: Eurostat 2008 ad-hoc module 'Over-indebtedness and financial exclusion'
Figure 5: Reasons for drop in income in EU-27 (%), 2008
Figure 6: Expectation for the financial situation for the forthcoming 12 months, 2008 (%) (NB: Households could also answer ‘to stay about the same’ or ‘don’t know’)
Figure 7: Proportion of population living in households that have a (great) difficulty to make ends meet (%), 2008

The amount owed in arrears takes into account: a) housing bills or repayment, b) consumption loans or credit repayment, c) other non-housing bills, while outstanding amounts are composed upon a) bank overdrafts and b) credit and/or store card(s) with arrears.

Although the scales used for each of the variables were not cumulative, it was possible to judge the overall degree of financial difficulties in aggregating these different dimensions for a household. For instance, a household was deemed to be in a ‘critical’ situation with respect to arrears and outstanding amounts whether it had owed an amount higher than its monthly disposable income) in one dimension or in the combination of various dimensions.

Overall, in 2008, the proportion of individuals in households that were in a critical situation was above 5 % in five Member States: the United Kingdom, Germany, Cyprus, Austria and Greece (Figure 1). In particular, the population at-risk-of poverty (i.e. those with an equivalised disposable income below 60 % of the national median equivalised disposable income) was above 5 % in 17 countries.

Table 1 shows the content and the intensity of the amount owed for indebted households. It shows, for instance, that 15.6 % of individuals in Germany lived in households with an imbalanced amount on the household bank account(s) which represented 33 % or more of their monthly disposable income and that for 7.7 % of individuals in that country, the amount owed was higher than their monthly disposable income (i.e. ≥100 %). The percentage of individuals in households with an imbalance on their bank account in excess of 100 % of their monthly income was above 2 % in four other Member States: Austria (5.3 %), Slovenia (3.4 %), Cyprus (2.9 %) and the United Kingdom (2.1 %). The EU-27 average was 2.2 %.

The highest number of people that owed more than 100 % of the household monthly disposable income on credit/store card(s) was found in the United Kingdom (8.6 %), Greece (2.5 %) and Ireland (2.1 %). The EU-27 average was 1.4 %.

As for arrears on housing bills, on non-housing bills and for other loans and credits, the percentage of individuals in households that owed more than their monthly disposable income was below 1 % with only four exceptions: Bulgaria (arrears for housing bills: 2.9 %), Germany (arrears for other non-housing bills: 1.7 %) and Greece and Cyprus (arrears for other loans and credit repayment: 1.1 % and 1.0 % respectively).

Household with bank current account(s) and overdraft

Bank current account (i.e. deposit account offering day-to-day money management facilities, like cheque books, debit cards, facilities to arrange standing orders, direct debits) ownership is an element of financial inclusion, which encompasses the ability to have access to basic banking services. At EU-27 level, about 9 people out of 10 lived in households with at least one bank current account, while this share was by 1 percentage point lower (i.e. 8 out of 10) in the population being at-risk-of poverty (Figure 2). The percentage of people living in households with a bank account exceeded 80 % in all EU-27 countries, with three exceptions: Bulgaria (17.1 %), Romania (24.6 %) and Greece (29.9 %). However these exceptions should be interpreted with caution due to the fact that in some countries bank current accounts are not that common because the standard bank (saving) accounts have no management facilities and people prefer to pay in cash. In such cases, low percentages do not necessarily imply financial exclusion. The percentage of individuals living in households with a bank current account exceeded 95 % in 15 out of the EU-27 countries.

In all EU countries, the percentage of people in households with a bank current account was consistently lower among those assessed as being at-risk-of-poverty. This difference was in excess of 20 percentage points (pp) in four countries: Cyprus (35.1 pp), Italy (25.7 pp), Czech Republic (21.9 pp) and Latvia (both 21.6 pp).

Figure 2 also shows that the percentage of people living in households with a large bank account overdraft (≥100 % imbalance on bank account). Overall, people at-risk-of poverty experience slightly fewer imbalances on their bank accounts, with the exceptions of Germany, Cyprus, Latvia and Romania where more households report imbalances in the at-risk-of-poverty population compared to the total population. However the differences are minimal.

Among women and men living alone, there was a 6 pp difference on average as to whether they had a bank account (more men had an account). On the other hand, for those living alone, the difference amounted to 13 pps between those aged under 65, and those over 65, with the younger age group being more likely to have an account.

In general, at the EU-27 level, if there are dependent children in the household, it is more likely that the household will hold a bank account.

Those who did not have an account were asked why when the survey was conducted. They were offered the following possible replies (non-exclusive, more than one answer may be chosen):

  1. The household did not need one and preferred to deal in cash;
  2. The charges were too high;
  3. There was no bank branch near where the household lived or worked;
  4. The household had applied for an account and had been turned down;
  5. The household thought that banks would refuse them.

At EU-27 level, the most common reply was the first option1 (83 %), followed by the second option (50 %). Less than 20 % of respondents chose one of the other replies.

As mentioned above (see Figure 2), three countries had a very low percentage of individuals with a bank current account (Bulgaria, Greece and Romania). Most of the respondents in those countries replied that they did not need one, and that they preferred to deal in cash: Bulgaria (65.0 %), Greece (60.6 %) and Romania (55.3 %).

Households with credit or store card(s) and credit/store card(s) imbalances

Just under one in two people (44.6 %) in the EU-27 was living in a household with a credit card and/or store card(s) (Figure 3). This percentage varied widely among Member States, from around 10 % in Hungary (9.4 %) and Romania (12.0 %) to more than 70 % in the United Kingdom (74.1 %) and Luxembourg (84.1 %). Within the population at-risk-of-poverty those possessing a credit/store card were approximately one out of four (27.8 %) in the total EU-27. With no exception, credit or store card ownership is smaller in the population of people who are at-risk-of-poverty. Compared to the total population, differences lie in a range of approximately 5 pp (Hungary, Czech Republic, Slovakia) to approximately 30 pp (Finland, Slovenia, Cyprus).

At the EU-level, the percentage of individuals living in a households with an imbalance on a credit/store card(s) (credit/store card(s) unclear balance) was about 5 % (Figure 3). At the country-level, the total share of those with overdrawn credit/store card(s) ranges from below 1 % in nine countries, namely Denmark, Italy, Austria, Finland, Lithuania, Slovakia, Estonia, Romania and Latvia, to above 10 % in four countries: Belgium, Ireland, Cyprus, Greece and the United Kingdom. In 11 countries, the percentage of people with an imbalance on a credit/store card(s) was greater for those considered to be at-risk-of-poverty, with the largest difference reported by Greece (5.9 pp). On the contrary, the remainder of the EU-27 countries reported lower rates for the at-risk-of-poverty population, with the largest difference being reported by the United Kingdom (7.7 pp).

Suffering from drop in income

In 2008, at the time of the survey, a very large share of people said that they had not suffered a major drop in household income during the past 12 months. However, the survey took place at different times in different countries during 2008 (see Data sources and availability/fieldwork period); moreover, the financial and economic crisis had not begun in some countries at the time that they were surveyed. Overall, about one in five EU residents had reported to have suffered a major drop in their income in the previous 12 months (Figure 4). The percentage is somewhat larger (one in four) for the population at-risk-of-poverty.

In nine countries, more than one in five people lived in households that reported a major drop in income in the previous 12 months, while in thirteen countries this applied to less than one person in six. In almost all countries, the percentage of those in households that said they had experienced a drop in income was higher for those who were at-risk-of-poverty. The only three exceptions were Cyprus (difference of 3.9 pp), Estonia (difference of 1.6 pp) and Denmark (difference of 0.6 pp).

There were eight reasons for the drop in income: job loss/redundancy; change in hours worked and/or in wages; inability to work because of sickness or disability; maternity, parental leave or childcare; retirement; marriage or relationship breakdown; other change in household composition; and other reasons.

Figure 5 shows that at the EU-level, the most common explanation for a drop in income was ‘other reason’ (35 %), ‘job loss/redundancy’ (21 %) and ‘change in hours worked and/or in wages’ (18 %).

Financial expectations

When asked about their expectations concerning the financial situation for the 12 months ahead, households were the most optimistic in Denmark, Finland, the United Kingdom, Romania and Estonia. More than 20 % of respondents in these countries expected their situation to improve. At the other extreme, in Greece, Portugal, Malta and Hungary, over 40 % of respondents expected their situation to get worse.

Figure 6 shows the situation of ‘optimists’ against ‘pessimists’ in all EU-SILC participating countries. In 20 out of 27 EU Member States, the percentage of people living in ‘pessimistic’ households exceeded the percentage of those living in ‘optimistic’ households. Denmark, Estonia, Finland, Luxembourg, the Netherlands, Romania and Sweden were the seven other countries where the opposite was true.

The group of countries circled in the upper left-hand corner groups the largest percentage of ‘pessimists’ (Bulgaria, Greece, Italy, Hungary, Malta, Lithuania and Portugal).

The other circle in the bottom right-hand corner groups countries with the lowest percentage of ‘pessimists’ and had the largest percentage of ‘optimists’ (Denmark and Norway).

In general, at the EU-27 level, when people were asked about their expectations regarding their financial situation for the year ahead, 54 % of respondents said they expected the situation to remain about the same, against 14 % who were ‘optimists’ (expected the situation to improve) and 25 % who were ‘pessimists’ (expected the situation to get worse). The difference in percentage points was therefore 11 points higher for the ‘pessimists’ at the EU-27 level. In 24 out of 27 Member States, the population at-risk-of-poverty was more -pessimistic than the others.

On average, at the EU-27 level, people living in at-risk-of-poverty households expressed more polarised opinions about the financial situation for the 12 months ahead. A slightly larger percentage (3 pp higher) of people in at-risk-of-poverty households answered that they expected the situation to get worse when compared to the total population of households. Fewer people in at-risk-of-poverty households expected the situation to remain about the (the percentage was 8 pp lower) when compared with the total population.

More surprisingly, the percentage of people expressing a positive expectation was higher among those who said they were in a ‘critical’ situation regarding arrears and outstanding amounts (25 %) than for the total population (14 %).

Figure 7 demonstrates another subjective element of financial exclusion; that of difficulty to make ends meet. This subjective poverty (“great difficulties” or “difficulties” with making ends meet) provides a relative measurement of poverty in terms of the household’s feeling of poverty. While in 2008, the population that reported to have difficulties (or great difficulties) to make ends meet was 24.8 %, this share increased by 1.2 pp in a 2-year period. The situation between 2008 and 2009 had deteriorated in 17 out of the 27 Member States. The largest difference was reported by Latvia (16.7 pp) and Estonia (14.3 pp). On the contrary, Slovakia, Sweden and Portugal reported the largest improvements in that respect (3.1, 1.9 and 1.8 pp respectively). Iceland was among the countries where the situation had sharply deteriorated (by 16.3 pp).

Data sources and availability

Data source

Data in this document were extracted from a special module on ‘Over-indebtedness and financial exclusion’ of EU statistics on income and living conditions (EU-SILC) which was carried out in 2008. All data are available as Excel files downloadable from the Eurostat website

Fieldwork period

National surveys differ in terms of the time during which the fieldwork is carried out. In 2008, most countries adopted a survey in which the fieldwork was concentrated over a period of a few months, mainly in the first half of the year, although there were some notable exceptions:

  1. Ireland and the United Kingdom conduct continuous surveys throughout the year;
  2. Four countries also had interviews during the final quarter of the year, namely Belgium, Italy, Malta and Sweden.

For exact dates on the fieldwork period by country in 2008, please consult the EU Quality Report (page 23).

Specific 2008 module variables

All the variables were collected at the household level. When the authors refer in the context of this study to ‘individuals’ it should be understood that they live in a household that has the given characteristics.


At the Laeken European Council in December 2001, European heads of state and government endorsed a first set of common statistical indicators of social exclusion and poverty; these are subject to a continuing process of refinement by the Indicators Sub-Group of the Social Protection Committee. These indicators are an essential element in the Open Method of Coordination to monitor the progress made by Member States in combating poverty and social exclusion.

EU-SILC was set up to provide the underlying data for these indicators. Organised under a Framework Regulation 1177/2003, it is now the reference source for statistics on income and living conditions and for common indicators for social inclusion in particular.

Under the Europe 2020 agenda, the European Council adopted in June 2010 a headline target on social inclusion. EU-SILC is also the reference source for the three sub-indicators on which this new target is based.

See also

Further Eurostat information



2008 module: Over-indebtedness and financial exclusion

Dedicated section

Source data for tables and figures on this page (MS Excel)

Other information

External links