Swedes vulnerable to financial crisis effects

The state collections agency, Kronofogden, is warning that average Swedes are highly exposed to the negative effects of the current financial crisis.

Even before international markets became rocked with a wave of uncertainty, the agency had already received a record number of reports of Swedes who were unable to pay their debts.

The effects of the current financial crisis are not reflected in the latest statistics from Kronofogden, but the agency is raising the alarm as to the high number of Swedish households already living on a financial knife edge.

The situation is troubling ahead of the weak economic conditions that lie ahead, according to Kronofogden spokesperson Jan Åkerlund.

“Obviously that’s the case, if you’re already living with a small margin,” he said to the TT news agency.

Increasingly, Swedish households are choosing to use credit arrangements when making new purchases. In recent years, the number of unpaid debts has increased steadily, irrespective of whether the economy is doing well or not.

Last year saw a new record in reports of unpaid debts, with Kronofogden receiving 912,000 requests, or one for every ten people in Sweden, for help in collecting overdue payments.

As Sweden enters into a period of weak economic growth, it is therefore extra important to review one’s household budget and make an effort to rein in spending.

“Look into whatever measures you can take,” said Åkerlund.

“And the need for short-terms savings is greater than ever,” he added, looking ahead to the always costly holiday shopping season.

Åkerlund warns of the risk that credit card expenses incurred around Christmas can pile up to the point where households can’t cover their other living expenses, which themselves are also increasing.

“We usually put out a warning in December, but we really ought to start warning people about Christmas today,” he said.


Student loans agency warns of non-payment

Close to 90,000 Swedes with student loans are endangering their future credit score by late or outstanding payments, prompting the student loans body CSN (Centrala studiestödsnämnden) to place warning calls to those risking a record of non-payment.

Student loans agency warns of non-payment

New figures revealed how many Swedes have defaulted on their loans and seen their cases forwarded to the Swedish Enforcement Agency (Kronofogden).

The average debt of people not managing to make their repayments is 11,000 kronor per person, with the majority of those affected being young adults who have studied at a tertiary level.

“Young people in particular find it hard to understand the consequences of ending up in the hands of Kronofogden. Some people choose not to do anything about it,” said Boel Magnusson, spokeswoman at CSN, to the TT news agency.

An equal mix of men and women are in the red, with only 13 percent having studied at a university level. The majority attended municipal adult education programmes (Komvux).

Now, CSN and Kronofogden are co-operating to reduce the number of people risking a record of non-payment, which affect their future credit rating.

In the worst case, they risk foreclosure.

“We know that the most people want to do what’s right, but that something has come up – that they’ve become unemployed for example,” Magnusson told TT.

“Many have the right to reduced repayments due to low income, and they don’t know it.”

TT/The Local/og

Follow The Local on Twitter