About half of Cyprus households do not have sufficient savings to deal with an emergency or a shock, a recently-released study shows.
This is above the EU average of 30 per cent.
“Even well before the health pandemic, more than 30 per cent of EU households on average were unable to meet an unexpected expense. For some newer EU members and countries hit very severely by previous financial crises, as many as one in two households was unable to meet an unexpected required expense,” the study notes.
However, all EU countries show a high level of financial fragility.
“But it seems for larger countries, the difference is not so great: about 35 per cent of households are financially fragile in Spain and Italy, compared to 28 per cent in Germany. The pre-Brexit UK, at 35 per cent, had an above-average level of household fragility,” according to the study.
What is striking, is that over half of the single-parent households across the EU are financially fragile.
“Single-person households with dependent children is the category with the greatest degree of fragility across the board. The first thing to note is the substantial increase in the number of families who are financially fragile: the share of vulnerable households belonging to this group increases in every EU country,
while the EU27 average share almost doubles to 57 percent (from 32 percent for all households),” the study says.
Italy is a somewhat surprising exception, at only about 40 per cent.
Savings are weak across Europe as well. About half of European households have less than €5000 in their current or savings accounts. For Cyprus, it’s above 60 per cent.
The study calls for governments to institute financial wellness programmes that teach households to increase their savings, and provide support.
Let’s hope that happens before the next shock-and-awe event.