Young man having a coffee at home in Espoo. LEHTIKUVA


An analysis of Intrum's debt collection data reveals that the number of severely indebted individuals has increased across all age groups in Finland in 2023, with young adults experiencing the most significant rise in both the number and the volume of debts referred for collection.

Following a temporary surge in payment difficulties and over-indebtedness triggered by the COVID-19 pandemic, there was a decrease in severe debt issues in 2021.

However, the trend reversed in 2022 and has now escalated to levels comparable to those seen in the pandemic year of 2020.

The increase in severe indebtedness in 2023 was most notable among individuals aged 40-44, showing a growth of over seven percent compared to the previous year. While severe indebtedness in young adult groups grew more modestly, the last quarter of 2023 saw a sharp increase in the number of debt collection cases among those aged 18-24. The rise in the principal amounts of debts referred for collection was particularly pronounced among debtors under 30. Economic shocks and uncertainties have contributed to the growing number of severely indebted individuals.

"Generally, severe indebtedness stems from individuals having multiple debts with significant principal amounts relative to their income level. For middle-aged individuals, the growth in severe indebtedness is likely influenced by challenges related to rising interest rates and living costs, which complicate managing financial obligations committed to under different economic conditions," says Juha Iskala, Commercial Director at Intrum.

In 2023, consumers' ability to manage their debts deteriorated noticeably compared to 2022. This downturn is likely due to changes in the economic environment, such as accelerating inflation and rising interest rates. Additionally, according to reports from the Ministry of Employment and the Economy, layoffs significantly increased in the latter half of 2023, affecting consumers' ability to pay off their debts.

While young adults generally show a weaker capacity to pay off debts compared to other age groups, those experiencing occasional payment difficulties have the weakest capacity in the oldest age group, those over 70.

"This could be due to the limited opportunities for older individuals to increase their income through employment. Serious illness or injury can pose significant expenses relative to a pension, and seeking external help can be costly," Iskala notes.

However, the ability to manage debts generally improves with age among the severely indebted. "Those who are severely indebted have often been subject to collection actions for a longer period, which means dealing with collection agencies and enforcement is not new to them. Even if new debts occasionally occur, they and even older claims are likely being paid through enforcement," Iskala adds.

The analysis, which covers data from 2019 to 2023 on nearly 1.1 million Finnish consumers registered by Intrum for debt collection, categorizes consumers based on their situation at the time of registration into those with occasional payment difficulties and those severely indebted. The results of the 2023 analysis use a broader database than previous years, making them not directly comparable to earlier data.


This page is provided in cooperation with People's Daily Online.
HELSINKI TIMES does not exercise editorial control over this section and is not responsible for the topics and content of this section.

More News About China