Intrum : Overspending and non-performing loans – is the wave about to hit

Consumers have had a torrid time in the last few years, with the Covid pandemic, geopolitical uncertainty, high inflation and a cost-of-living crisis. While many have managed to stay afloat, collections teams are preparing for non-performing loans to increase significantly.

Intrum's latest European Consumer Payment Report (ECPR) surveyed 20,000 European consumers and found that many have reached the point where clever budgeting and cutting back on day-to-day expenses is no longer enough to meet the shortfall in their monthly budgets.

More than a third of those surveyed (35%) have failed to pay at least one bill on time in the last 12 months - the highest proportion since 2019. Four in ten who missed a bill (42%) said this is a regular occurrence for them.

While some managed to save money during Covid, with fewer opportunities to spend money on leisure and travel, savings have been wiped out by the cost-of-living crisis. Of those surveyed, 20% have no savings at all and a further 17% have less than one month's income to fall back on.

Meanwhile, a staggering 76% of consumers are either breaking even or overspending each month, meaning only a quarter of Europeans are comfortable with their finances. Of the 24% overspending, the average amount they are exceeding their budget by is €232 - adding up to €2,784 in a 12-month period.