The average heavily indebted German is between 35 and 45 years old, has €36,000 in debts, and an income of under €900 a month, according to the report issued by a group of charities and consumer organisations.
Even younger Germans are falling into the debt trap. Eleven percent of 18 to 24-year-olds have an average of €1,400 in debt, said Svenja Koch of the German Red Cross, one of the study’s co-sponsors. The report said rampant consumerism is partially to blame for growing debt.
“Many families are overburdened and can’t deal with money because they’re putting the fulfillment of consumer wishes in the forefront,” said Rainer Brückers, head of the Workers‘ Charity.
While German banks have received billions in government assistance, indebted consumers haven’t gotten any help, said Gerd Billen, head of the German Association of Consumers.
According to the consumer research organisation Stiftung Warentest, German banks have also not passed along the current record low interest rates to their customers. As a result, banks have pocketed an extra €1.3 billion in profits, the report said.
The report’s six co-sponsoring organisations say the financial sector should lower interest rates for consumers and develop more flexible repayment terms, especially for those who lose their jobs or have their working hours cut.
The report’s authors say the data was collected in 2007, before the world financial crisis and the worst recession to hit Germany in over 60 years. The authors believe that rising unemployment will only lead to more personal bankruptcies and a cut in state funding for debt repayment advising.