Cookie Consent by Free Privacy Policy Generator
14.1 C
Monday, July 15, 2024

More Norwegians can’t pay their bills

Growing numbers of retired Norwegians, along with many in high income brackets, now represent the fastest-growing segments of the population that have gotten into trouble for failing to pay their bills. The trouble is generally tied to levels of consumption that are simply out of line with available income.

Newspaper Dagens Næringsliv (DN) reports that an overview from Norway’s largest collection agency, Lindoff, shows that so-called inkassogjeld (debt from an accumulation of unpaid bills) is rising most quickly among Norwegians with incomes of NOK 700,000 (USD 87,000) or more per year, considered high in Norway. Their consumption has also been rising quickly, often financed by credit cards and other expensive unsecured debt.

The price of ‘enjoying life’
The amount of unpaid bills among retirees, meanwhile, has doubled during the past eight years, reported DN. While younger Norwegians seem to be getting better at paying their bills on time, older Norwegians are “enjoying life” more than ever before “and don’t seem to have a goal of paying down debt,” Endre Jo Reite, credit chief at Sparebank 1 in Trondheim, told DN in confirming the trend cited by Lindorff.

Anette Willumsen, managing director at Lindorff Norge, told DN that Lindorff’s figures reflect higher home mortgage debt and higher consumption among senior citizens. Double the number of collection cases involving Norwegians aged 66 and over have been opened so far this year than in 2008.

“The development shows that many older people don’t manage to adjust their consumption in line with lower pension income,” Willumsen said. Most Norwegians with the best pension programs receive around 66 percent of their final annual income, while many receive less.

“We have a new generation of retirees in Norway who want to enjoy life,” Reite noted. The “new retirees,” he said, “behave very differently than those who retired 10 to 15 years ago. Many of them have consumer debt and want to maintain the same levels of consumption they had before.”

Retiring without mortgages paid off
While previous generations of retirees strove to be debt-free when they quit working, Reite said it is not unusual for today’s retirees to still carry mortgages on homes and holiday homes upon retirement. Many are also far more likely to borrow against the equity they have in their homes, instead of preserving it for their children to inherit. Reite said that retirees who haven’t built up sizeable savings accounts and still have debt can run into trouble when their income drops by as much as 40 to 50 percent. Lindoff also noted that the loss of a spouse or partner can also cause problems, when it means that pension income is lost as well.

Young Norwegians still form the largest group of those involved in collection cases, but the growth of those cases is declining while it’s rising among older Norwegians. Individual debt levels among those aged 66 to 70 is also higher, averaging around NOK 295,000.

The numbers from Lindorff also show an alarming 80 percent growth rate in collection cases opened against Norwegians with incomes of NOK 700,000 and higher over the past two years. Those in high income brackets now make up 11 percent of total unpaid debt, compared to 7 percent in 2012. This segment of the population also in general faces higher risk of job losses, separations and divorces, according to Lindorff.

“We are seeing this trend especially in areas of the country where the oil and offshore sector has weakened,” Willumsen said. With unemployment rising, she said she hopes people will learn to adjust their consumption to their actual income level. Berglund



For more news on Arctic developments.



If you like what we’re doing, please consider a donation. It’s easy using PayPal, or our Norway bank account. READ MORE