Intrum: Millions to lose sight of spending as monthly subscriptions and payment deferrals pile pressure on household finances
In This Article:
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Almost half (45%) of European consumers are caught out by the build-up of monthly subscription costs
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Generation gap means over half (52%) of millennials and 53% of Gen Z struggle to keep track of subscription spending, compared with 34% of Baby boomers
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30% of consumers are planning to increase their use of buy-now-pay-later products
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Three in four (76%) are just breaking even or are over-spending each month, with the average over-spender exceeding their budget by EUR 232
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One in five consumers have no `cash buffer' to fall back on in the event of difficulties
STOCKHOLM, Nov. 16, 2023 /PRNewswire/ -- Millions of consumers across Europe are losing sight of their monthly spending and household outgoings, as almost half (45%) of consumers admit to being taken by surprise by how much their subscription fees build up without them realising. This is according to the 2023 European Consumer Payment Report from Intrum, the credit management services provider.
As inflation outpaces wage growth, consumers find themselves with considerably less money in their pocket. Three in four (76%) admit to just breaking even or over-spending each month. Subscription based services, that allow consumers to spread the cost of goods and services, while convenient are adding fuel to the fire causing 'Subscription creep' – as the build-up monthly payments for online purchases make it harder to cope with cost-of-living pressures.
Published today, Intrum's annual study lays bare the experiences of 20,000 consumers across 20 European countries. It shows that modern payment methods for goods and services add to the challenge of managing money at a time of high inflation and rising interest rates. Greece (67%) is worst affected nation for 'subscription creep', followed by Ireland (62%), Finland (55%) and UK (53%).
Chart 1: European countries where consumers are most affected by 'subscription creep'
Young adults most exposed to 'subscription creep'
Intrum's study shows that younger adults (Millennials, born 1980 onwards) are especially prone to experiencing 'subscription creep' compared with older generations. Across Europe, over half (52%) of Millennials and 53% of Gen Z admit they struggle to keep track of subscription spending, compared with just one in three (34%) Baby boomers.
Build-up of buy-now-pay-later commitments piles on the pressure
In another sign of increasingly complex personal finances, nearly one in three (30%) consumers across Europe say they are likely to increase their use of Buy Now, Pay Later (BNPL) arrangements to manage the impact of high interest rates and inflation. Almost half (47%) are more likely to spend money with businesses that offer them flexible payment terms including such as partial payments, multiple payment methods and flexible due dates.
Chart 2: To manage the impact of high interest rates and inflation, how likely are you to increase usage of buy-now/pay-later solutions?
This is despite more than one in three consumers (35%) admitting they find it difficult to keep track of BNPL purchases and how their spending can build up to during the month. Younger generations are again the most affected, although almost three in ten (29%) of over-65s across Europe also find themselves struggling to manage their BNPL commitments.
Chart 3: Europeans finding it difficult to keep track of buy-now/pay-later purchases and how much they can build up during the month
The findings come at a time when half of European consumers (49%) say they have less spending money after paying for essential items and bills than a year ago. Three in four (76%) are only just breaking even or over-spending each month, with the average over-spender exceeding their budget by €232.
Denmark and Switzerland are at the more extreme end of the scale, with consumers in both countries exceeding their monthly budgets on average by more than €300 per month.
With their personal finances under pressure, more than one in three (35%) consumers admit they have failed to pay at least one bill on time in the last 12 months. This is the highest proportion in Intrum's annual study since 2019.
