For almost every second family that has financial liabilities, its liabilities assumed are a great burden, while households with instant credits face the most difficulties, shows the latest survey of the financial behaviour of households, commissioned by the Bank of Lithuania.
‘For approximately four in five families with instant credits, their financial liabilities are a heavy burden. This burden being assumed by households with the lowest income, whose possibilities to deal with unexpected changes in their financial position are limited, is a dangerous tendency,’ says Andrius Škarnulis, Head of the Macroprudential Analysis Division of the Bank of Lithuania.
According to the survey, approximately one sixth (16.9%) of households have financial liabilities. Nearly half of the families with financial liabilities (46.5%) used the services of leasing companies and borrowed for consumption expenditure (27.6%), one fifth reported to have taken a housing loan, and 18.8 per cent of families have been issued instant credits. Households with the lowest income are mainly indebted to instant credit companies. 75 per cent of families with income below EUR 350 reported being indebted to instant credit companies.
Current financial liabilities, as a heavy burden, were reported by 47.1 per cent of financially liable households, while the share of families with instant credits, bearing the financial burden, is 83.9 per cent. Moreover, even 71.8 per cent of families indebted to instant credit companies did not manage to save anything over the previous half-quarter.
Overall, about half of the families manage to save at least a little (45.5%) — EUR 31 to EUR 150 are mostly put aside as savings (45.7% of all those who managed to save). Survey participants feel more optimistic about their possibilities to save in the future: there were more households intending to save over the next half-year (61.1% of total respondents) than those who had saved over the previous six months.
Households mostly did not save for a specific purpose but to have sufficient funds for contingent expenses or to secure against a possible drop in income. These reasons were reported by 56.9 and 51.6 per cent of saving households respectively. The share of households saving for a specific purpose, e.g. a major purchase, accounted for almost a third (30.4%) of total surveyed who were saving, while that of households who sought a return on their savings was the least (3.7%). Every fourth household (25.2%) reported saving for long-term purposes, e.g. their children’s studies.
The most popular saving means continued to be liquid financial assets held at home (59.7%) and an account or deposit with a bank (54%). Other saving means were much less popular: life assurance products were reported to have been chosen by 10.9 per cent, pension funds — 6.6 per cent, investment in property — 3.7 per cent of the surveyed.
The detailed Review (495.2 KB download icon)of the Survey of the Financial Behaviour of Households is published on the website of the Bank of Lithuania.