Business

A quarter of Spaniards do not pay their bills on time

The coronavirus health crisis has affected the economy of Spanish households above the average for neighboring countries. Their incomes have dropped significantly, and although the price of some basic bills were reduced in 2020, the pandemic has set some guidelines for paying bills and planning expenses for Spaniards.

The new European report on consumer payments, prepared by Intrum after analyzing consumer behavior in 24 European countries, confirms this situation. Last year, a quarter of the Spanish population (24%) was late in paying their bills, 4% more than in 2019.

Despite this increase, Spain remains one of the 10 European countries in which its citizens are faced with paying their bills with greater punctuality; Because, in large economies like France, 27% of people questioned admit not meeting their payment obligations on time, while the European average is 29%.

This delay in paying bills is motivated, not only by the fact that 43% of Spaniards have seen their income decline due to COVID-19, but also by economic uncertainty. The forecast for Spain is not at all flattering and consumers are well aware of it. The Organization for Economic Co-operation and Development (OECD) assures that Spain will suffer from the second largest recession of the 46 states that make up the OECD, only overtaken by Argentina; and the European Commission predicts that Spain’s GDP will decline by 12.4% by the end of 2020.

This macroeconomic scenario is transferred to the microeconomic scenario and causes the Spaniards to prioritize paying some bills or others. And not for less, because despite prioritizing the payment of essential bills during childbirth, such as the internet or basic household services, a third of Spanish citizens say that after paying their bills, they have less than 10% of their salary; a figure almost ten percentage points above the European average (25%).

This little room for maneuver to deal with unforeseen events not only increases the percentage of Spaniards who are late in their bills, but, among them, almost 4 in 10 (36%) take it as a habit and the 64 % remaining say they are This is a specific event.

The financial well-being of the Spanish at the bottom of Europe

Given these data, there is no doubt that the health crisis has had a negative impact on the financial well-being of Spaniards. Especially for those between 38 and 44 years old, since 6 in 10 Spaniards of these ages say that they are more concerned today about their financial well-being than at any other time in their life.

A circumstance which, according to the Intrum Financial Well-Being Barometer, has a negative effect on the economic health of Spaniards. In fact, the Spanish population is below the European average in financial well-being, falling 8 places in the ranking and being at the bottom of the European scale (5.96 points), only above Greece (5.91) and Italy (5.27).

Faced with this deterioration in financial well-being, the Spanish population is starting to take precautions when it comes to borrowing. In fact, the Intrum report places Spain among the 5 most cautious countries in terms of debt, despite low interest rates.

At the top of the ranking is Portugal, where 8 out of 10 Portuguese say they are cautious about taking on new debt (82%), followed by Hungarians (78%) and Poles and Romanians (76%).

Greece is at the same level as Spain, where 74% of respondents admit to being more cautious than normal when contracting debt, betting on a sustainable economy.

Grace periods are expected to end in the coming months and the Spaniards prefer to be cautious in their budgets. According to Intrum’s European Consumer Payment Report, once payments such as mortgage cannot be postponed, 1 in 5 Spaniards (18%) are convinced that in the next six months they will not be able to cover expenses. essentials such as utility bills, three percentage points above the European average.

This feature offered by some lenders and mortgage lenders that allows consumers to defer occasional, pre-agreed payments has become a great ally of consumers. Specifically, 8% of Spaniards who experienced a drop in their income requested a grace period.

If you go a little further and analyze the type of bills that were covered in 2020 with this grace period, you can see the importance of this type of aids, from the payment of housing, electricity, water or Electricity and credit cards, overdrafts or personal loans are the payments that the Spaniards have covered with a grace period.

* If you found this article interesting, we encourage you to follow us on TWITTER and subscribe to our DAILY NEWSLETTER.

HRDigital

Back to top button