Genworth Index:Measuring Consumer Financial

Transcripción

March 2013
I Fifth Edition
Genworth Index:
Measuring Consumer Financial
Security and Vulnerability
GF90336 05/11
I
i Genworth Index: Measuring Consumer Financial Security and Vulnerability
Table of contents
About the Genworth Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Key research findings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Main themes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Regional profiles
Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Denmark. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Finland. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Sweden. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Norway. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
France. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Germany. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Great Britain. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Ireland. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Italy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Spain. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Portugal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Poland. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Turkey . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Greece. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Latin America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Brazil . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Chile. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Colombia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
Mexico. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Peru. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
China. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
The Genworth Index background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A - 1
About Genworth Financial. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A - 3
Our Research Partners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A - 4
Tables and charts index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A - 5
I
Genworth Index: Measuring Consumer Financial Security and Vulnerability 3
About the Genworth Index
Financial security is important to households. It provides
a foundation on which they can make financial and
potentially life-changing decisions. Financial vulnerability
meanwhile signifies how difficult households are finding
simply meeting their existing financial commitments, with
commensurate difficulties in planning for the future.
The Genworth Index has been developed to provide a
clear and robust picture of households’ general financial
situations in the countries in which those households live.
This year, the Index encompasses 20 countries. Of these, a
core set of ten European countries have been included in
every edition of the Index since it began in 2007.
The Index questions are asked only of householders – an
adult in whose name the accommodation is owned or
rented, or his or her partner – aged 18 or over in order
to provide meaningful data from those with financial
responsibilities.
The research was conducted using Ipsos MORI’s Global
Omnibus in 20 countries across Europe, Latin America and
Asia, between October and December 2012. Questions
were asked of samples of up to 1,000 adults in each
country. Results are weighted to be representative of the
population within each country.
The Index is the result of a 2007 developmental project
commissioned amid growing concern about rates of
consumer borrowing and over-indebtedness. The purpose
of the project was to devise an internationally-relevant,
standardised and timely measure of consumer financial
security.
The Index score itself provides a snapshot of the overall
level of relative financial security in a given country. The
score ranges from 0 to 100, with a low score indicating
financial vulnerability and a high score indicating financial
security.
Based on their responses, households are categorised in
four ways:
•
‘Financially Secure’ – have rarely experienced financial
difficulties and expect their financial situation to
improve.
•
‘Circumspect’ – have rarely experienced difficulties,
if at all, and who expect their situation to remain the
same or get worse.
•
‘Strivers’ - have experienced financial difficulties
relatively frequently but who are now expecting their
situation to improve.
•
‘Financially Vulnerable’ - have been experiencing
financial difficulties often or all the time and who feel
that their situation is unlikely to improve.
For the first time, the Index report also aims this year
to explain what drives consumers’ feelings of financial
security and vulnerability by asking households to select
their top three concerns for the future financial security of
their household, e.g. income from work, job security, the
wider economy, levels of savings, consumer borrowing,
social security available etc.
4
I Genworth Index: Measuring Consumer Financial Security and Vulnerability
Key research findings
Welcome to this fifth edition of the Genworth Index. The Index in 2012 tracks consumer financial security
and vulnerability in 14 countries in Europe, five in Latin America, as well as China, in a survey of over
13,000 households.
The Index score provides a snapshot of the overall level
of relative financial security in a given country. The score
ranges from 0 to 100, with a low score indicating financial
vulnerability and a high score indicating financial security.
Nordic Countries: Nordics Most Secure Region in
Europe
•
UK maintains Index stability but financially
vulnerable numbers rise
Score 39: The proportion of British households
classed as financially secure holds steady from 2010
(eight per cent in each year). This is higher than the
number of German households (three per cent).
•
Ireland regains Index stability
Score 32: Ireland’s levels of financially vulnerable
(34%) compare favourably to some of the other
challenged Eurozone countries such as Italy (47%)
and Spain (41%). And are less than half the number of
financially vulnerable in Portugal (69%) and Greece
(80%).
•
Number of financially vulnerable households
doubles in Denmark
Score 52: Denmark has more than twice the number
of households classed as financially vulnerable as
Sweden, and more than three times as many as
Norway.
•
Finland trails other Nordic countries on the Index
Score 47: While this highlights the slowing economic
growth, rising unemployment and concern about the
eurozone seen in Finland in the last year, Finland still
finishes ahead of all the other non-Nordic European
countries on this year’s Index.
•
Italians feel more vulnerable: Lack of optimism for
the future
Score 11: Almost a half of all households in Italy are
now classed as financially vulnerable and only one per
cent as financially secure. Levels of savings scored
strongly as a key factor for Italians.
•
Secure Swedes score highly on Index
Score 67: One in five households in Sweden (21 per
cent) is classed as financially secure in 2012. This is
higher than most other countries in Europe, bettered
only by neighbouring Norway.
•
Economic uncertainty troubles Spanish
Score 17: Only two per cent of households in Spain
are classed as financially secure. Spain is one of the
only countries on the Index to give the state of the
wider economy as a key factor for the future outlook.
•
Norway maintains European lead in financial security
Score 71: Almost a quarter (24 per cent) of households
in Norway are classed as financially secure in 2012.
•
Vulnerable Portugal plummets on Index
Score 6: The only country with a greater proportion
of financially vulnerable households than Portugal in
2012 is Greece. Unusually, long-term care features as
a key factor in householders’ future financial outlook.
•
Polish pessimism, despite relative economic strength
Score 13: Only one per cent of Polish households are
now financially secure. Given the comparative health
of the Polish economy, this is a surprising result that
might be explained by the low real wage growth
and slowing employment growth the country is
experiencing.
Other European Countries: A Varied Picture
•
Over a quarter of French households now financially
vulnerable
Score 36: One of the ten countries featuring on the
Genworth Index since 2007, France has an appreciably
lower financial security score in 2012, of 36, than it
recorded in 2007.
•
Scepticism Dominates in Germany
Score 29: Three per cent of German households are
classed as being financially secure in 2012. This is
only about a third of the number of financially secure
households in the UK, and half that of Ireland.
Genworth Index: Measuring Consumer Financial Security and Vulnerability
•
Consumer borrowing a concern for Turkish
households
Score 38: In its third appearance, Turkey finishes
mid-table on the Index, out-scoring countries such
as France and Germany. Almost a quarter (23 per
cent) of Turkish households in the survey gave level
of consumer borrowing as a concern when looking
ahead.
•
Greece hits rock bottom
Score 1: Greece is the only country on the Index
to identify social security payments as among the
top three factors when assessing their household’s
financial situation.
•
Chilean optimism ensures high-flying first
appearance on the Index
Score 63: Over a quarter (27 per cent) of Chilean
households are classed as financially secure. This
makes Chile the country with the highest proportion
of financially secure households of all the Latin
American countries.
•
Colombian households positive for the future
Score 50: Colombia out-scores many European
countries on the Index of financial security, including
Finland, Great Britain, France and Germany, with
many householders holding a positive economic
outlook. Even so, of the four Latin American new
entrants this year, Colombia has the lowest Index
score.
•
Job security troubles the Mexicans
Score 43: Mexico’s score is higher than many
European countries, although Mexico reports
China: Strong Financial Security
•
Confident China tops the Index
Score 78: China tops this year’s Index with a five-year
high score.
lower levels of financial security than the other Latin
American countries. Concern about job security is a
key driver when looking ahead.
Latin American Countries: Positive for the Future
Positive outlook for Brazil
Score 63: Brazil scores strongly on the Index for
financial security, with the same score as Chile. This
is explained by the optimism of those who, despite
recently experiencing financial difficulties, expect
their financial situation to improve.
•
Peruvian optimism tempered by concerns for the
economy
Score 51: Over a quarter of Peruvians (26 per cent)
are concerned with the state of the national or global
economy when looking ahead.
Chart 1: Overview of the 2012 Consumer Index results by country
100
90
Percentage (%)
•
80
70
60
50
78
71
67
63
63
52
51
50
I5
47
43
40
39
30
38
36
32
29
17
20
10
0
Index Score
Source: Genworth Index; Ipsos MORI Global Omnibus October - December 2012
13
11
6
1
6
Main themes
Chart 2: Top consumer financial issues in Europe
100
Greece
Portugal
Percentage (%)
90
France
80
Germany
70
Italy
60
Ireland
50
Poland
40
Great Britain
30
Denmark
20
Finland
Spain
10
0
Turkey
The cost of
living
Level of
income from
work
Level of
savings
Job security
Level of
income from
savings
Sweden
Norway
The climbers and fallers on this year’s index
Iberian concern for the macro-economy
China is the most financially secure country on this
year’s Index with a score of 78. The only countries to
show improvements since the 2010 Index are Mexico
and Sweden. Conversely, Spain has the largest absolute
drop in its score, from 34 in 2010 to 17 this year. The
scores for Denmark, Greece, Italy and Portugal also
drop by more than ten points on this year’s Index.
In all but three European countries, the state of the
national and global economy is a main concern for only
a small minority of households. The exceptions are Spain
(39 per cent of households report this as a concern),
Portugal (28 per cent) and Finland (also 28 per cent).
This reflects the ongoing economic crisis in both of the
Iberian countries, while highlighting the slowing economic
growth, rising unemployment and concern about the
eurozone seen in Finland in the last year.
Cost of living dominates European agenda
When looking ahead, cost of living features among the
top three concerns for households in all of the European
countries, apart from Norway. Almost three-quarters
of both Greek and Portuguese households (72 per
cent in each country) give this as one of their main
concerns, along with 71 per cent of French households.
Almost two-thirds of German and Italian households
(65 per cent and 61 per cent respectively) give this as a
key concern, as well as over half of all Polish, Irish and
British households (53 per cent, 53 per cent and 51 per
cent respectively.) Level of income from work and job
security also feature among the top three concerns for
households in most European countries.
Latin American optimism
The Latin American countries show relatively high levels
of financial security on their first appearance on the
Index. A key reason for these countries faring so well is
people’s optimism about their future financial situations.
The strivers (the Index group that have experienced
financial difficulties, but expect their situation to improve
over the coming months) are the largest group in four
of the five countries (Chile being the exception). In fact,
this group accounts for almost two-thirds (63 per cent)
of all households in Brazil, and half (50 per cent) of all
households in Peru.
I7
Chart 3: Top consumer financial issues in Latin America
100
Percentage (%)
90
80
70
Brazil
60
Chile
50
40
Colombia
30
Mexico
20
Peru
10
0
The cost of
living
Job security
Level of
savings
Level of
income from
work
Level of
income from
savings
Level of savings a major factor in South America
Chile unique in its heightened concern for levels of
consumer borrowing
Level of savings is a key concern for South Americans.
Chile (51 per cent of households), Peru (48 per cent),
Colombia (46 per cent) and Brazil (43 per cent) all give this
as one of the main factors they consider when looking to
the future.
Increased access to credit in Chile has been a by-product
of the recent strengthening of its economy. Reflecting
this, more than half (51 per cent) of Chilean households
are concerned about their levels of consumer borrowing.
To put this in perspective, Turkey is the only other country
where this figures among the three main concerns and,
even then, less than a quarter (23 per cent) of Turkish
households give this as a concern when looking ahead.
Chart 4: Top consumer financial issues in China
Percentage (%)
100
80
60
40
44
29
25
25
20
20
0
19
18
18
17
8
6
6
4
1-1
European households have been among
the worst hit in the developed world by
the impact of the financial crisis since
2007. However, the stories vary across the
region.
I9
Europe Overview
European households have been among the worst hit in
the developed world by the impact of the financial crisis
since 2007. However, the stories vary across the region.
Eurozone countries that suffered the steepest recessions
and have received or may soon have to apply for financial
bail-outs - Portugal, Ireland, Greece and Spain - see the
greatest levels of pain.
Rising unemployment, falling house prices and large debts
mean many households are under severe pressure. The
eurozone economy is projected to remain in recession into
2013, which means households will continue to struggle.
On the positive side, contained levels of inflation and
interest rates at historic lows have meant that households
are able to service their debts. However, that may change.
Households in the countries at the centre of the euro
project have been less affected and, in the case of
Germany, have even seen their standards of living
improve. Italian households also appear surprisingly
robust.
Outside the euro, British households are labouring under
large debts while Poles are learning to deal with slow real
wage growth combined with falling employment.
The Scandinavian countries are benefitting from past
prudence while Turkey has perhaps shown the members
of the European Union, which it wants to join, how to
prevent debt problems getting out of control.
Chart 5: 2012 Genworth index results in Europe Market
100
90
Percentage (%)
80
70
60
50
40
71
67
52
47
39
38
36
32
30
29
17
20
10
0
Index Score
13
11
6
1
I
10 Genworth Index: Measuring Consumer Financial Security and Vulnerability
Number of financially vulnerable households
doubles in Denmark
Property prices rose for the first time in two years in the
second quarter of 2012, taking the edge off a 25 per cent
slump in values since the property bubble burst in 2007.
Economic Snapshot
Danish households have built up a substantial cushion
of savings over recent years and decades but there is a
danger that falling house prices will now erode some of
that safety net.
Total net wealth was 390 per cent - or almost four times - of
disposable income in 2011 although that was a decline
from 450 per cent in the previous year.
The fall in house prices means that the collateral pledged
for household loans from banks and mortgage lenders
has declined in value. It has also made it harder for Danes
to sell their property without crystallising a loss and
transactions have fallen to two-thirds of normal levels.
Mortgage debt has stabilised at around 30 per cent of
national income after rising sharply in the run-up to the
crisis. However, housing wealth is almost twice that level at
around 65 per cent.
However, the accumulation of significant pension savings
means that over a longer time horizon savings will remain
high.
Chart 6: 2012 Genworth index results in Nordic Market (Denmark)
100
90
Percentage (%)
80
71
67
70
60
52
47
50
24
21
20
10
0
Financially vulnerable
Index Score
40
30
Financially secure
13
3
Norway
11
10
13
5
Sweden
Denmark
Denmark
* Source: Genworth Index; Ipsos MORI Global Omnibus October - December 2012
Finland
I
Genworth Index: Measuring Consumer Financial Security and Vulnerability 11
Percentage (%) in each group
Table 1:
Index Score,
Denmark
Strivers
Financially
Vulnerable
64
9
4
68
10
5
18
69
8
6
64
17
70
8
5
52
13
68
8
11
Index
Score
Financially
Secure
Circumspect
2007
68
22
2008
64
18
2009
63
2010
2012
Index Score
•
At the same time, the number of Danish households
classed as financially vulnerable has nearly tripled
since the Index began, rising from four per cent in
2007 to 11 per cent this year.
•
In fact, Denmark has more than twice the number of
households classed as financially vulnerable as
Sweden, and more than three times as many as
Norway.
•
Accordingly, Denmark has almost half the number of
financially secure households (13 per cent) as Norway
(24 per cent).
•
More encouragingly, a third (33 per cent) of Danish
households report that they never experience
financial difficulties, and expect their financial
situation to remain the same. These form a large
component of the circumspect group (those who
rarely experience financial difficulties but who do not
expect their situation to improve).
Denmark scores 52 points on the Index of consumer
financial security in 2012, which is significantly lower
than its score of 64 in 2010. Maintaining a score in the
mid-sixties throughout the first four editions of the Index
between 2007 and 2010, the lower score this year is due
to a dramatic doubling in the percentage of households
classed as financially vulnerable since the Index was last
compiled in 2010.
•
The number of households classed as financially
secure has fallen steadily since the first Index in 2007.
While almost a quarter were classed as secure in
2007, this dropped to 17 per cent in 2010, and again
to 13 per cent on this year’s index.
households (37 per
cent) in Denmark are
twice as likely as secure
households (19 per cent)
to be concerned about
their housing payments
12
Denmark: Top Consumer Financial Issues
Cost of Living; Job Security; Income from work
•
•
•
•
The cost of living, job security and level of income
from work are the three factors people in Danish
households feel are most important when assessing
their future financial situation.
Two-thirds of households in the financially vulnerable
group think that cost of living is an important factor
when looking ahead, compared to just 41 per cent of
the financially secure group.
Households with lower incomes are also more
concerned about the cost of living (52 per cent) than
higher-income households (40 per cent). Other
factors of disproportionate concern to lower-income
households are the level of social security payments
(27 per cent compared to ten per cent of higherincome households) and the cost of long-term care
(eight per cent compared to four per cent).
Conversely, households with higher-incomes are more
concerned by job security (50 per cent compared to
21 per cent of lower-income households) and their
level of income from work (35 per cent compared to
13 per cent).
•
Financially vulnerable households (37 per cent) in
Denmark are twice as likely as secure households
(19 per cent) to be concerned about their housing
payments when looking ahead.
•
Compared with the average of 26 per cent,
households in the Copenhagen region are particularly
likely to see level of income from work as an important
factor when thinking ahead (33 per cent).
•
Those in the south of the country (21 per cent) are
more concerned with their household’s level of
consumer borrowing, compared with 14 per cent
nationally.
•
More than four in ten Danish households (42 per
cent) where the respondent is aged 65 and over
are concerned about their level of social security
payments, compared to just 17 per cent of all
households.
•
Similar to several other countries, the extent to which
Danish householders see the national or global
economy as impacting their future financial situations
varies by education level. While 18 per cent of
householders with the lowest levels of education are
concerned about this, more than a quarter (26 per
cent) of those with tertiary education see this as an
issue for their household’s financial security.
Percentage (%)
Chart 7: Top three consumer financial issues, Denmark
100
80
60
40
44
36
26
22
22
20
0
19
17
16
14
14
11
9
6
I 13
Finland trails other Nordic countries on the Index
Economic Snapshot
Continued slow economic growth – GDP growth of 0.2 per
cent and 1.3 per cent in 2012 and 2013 respectively - will
weaken employment in 2013. Unemployment began to
grow in the second half of 2012, and the unemployment
rate is forecast to rise to 8.4 per cent in 2013.
Household debt as a share of disposable income has
seen a sharp increase over the past decade in Finland,
which may leave households vulnerable as the economy
stagnates.
After a moderate slowdown in 2009, house prices
recovered their pre-crisis growth path and according to
some indicators property values are above their long-run
trend.
So far, debt default rates have stayed low as banks have
first charge at default and full recourse against borrowers,
which creates an incentive for them to meet interest
payments. Mortgages overwhelmingly come with floating
interest rates so falls in interest rates have lowered
borrowing costs.
Nevertheless, the increase in house prices has exceeded
income growth only marginally in recent years, which has
relieved concerns over a possible real estate bubble.
However, the Central Bank has warned that the share
of highly indebted households, those likely to face
heightened repayment problems as unemployment
increases again, is rising.
Annual house price inflation in the third quarter of 2012
was just 1.8 per cent. In September, the average interest
rate on new housing loans with a floating rate was 1.7 per
cent, by far the lowest in the euro area.
Chart 8: 2012 Genworth index results in Nordic Market (Finland)
100
90
Percentage (%)
80
71
67
70
60
52
47
50
24
21
20
10
0
Index Score
40
30
Financially secure
13
3
Norway
11
5
Sweden
Denmark
10
13
Finland
14
Table 2:
Index Score,
Finland
Index
Score
Financially
Secure
Circumspect
Strivers
Financially
Vulnerable
-
-
-
-
-
2008
52
10
69
13
8
2009
53
11
66
14
8
2010
52
12
62
16
10
2012
47
10
63
15
13
2007
Index Score
•
Finland’s score of 47 on the Index of consumer financial
security places it lower than all of the other Nordic
countries in 2012. It is also significantly lower than the 52
it scored in the previous edition. This reflects a fall in the
number of households classed as financially secure and a
rise in the number classed as vulnerable compared with
2010.
Similarly, both Finland and Denmark also have about
half the number of financially secure households than
Sweden and Norway.
•
A quarter (25 per cent) of all Finnish households say
they ‘never’ experience difficulties. A small minority
‘never’ experience difficulties while also expecting
their financial situation to improve over the next 12
months (four per cent).
•
In contrast, almost half of Finnish households (48
per cent), describe experiencing financial difficulties
‘often’ or ‘sometimes’.
•
There has been a marginal drop in the percentage of
financially secure households in Finland in 2012 to 10
per cent compared with 12 per cent in 2010.
•
As with Denmark, Finland has more than twice
the number of households classed as financially
vulnerable than Sweden, and more than three times
the number compared to Norway.
While Finland has a
lower Index score than
its Nordic neighbours,
it finishes ahead of all
the other European
countries on this year’s
Index.
Finland: Top Consumer Financial Issues
Income from work; Cost of Living; Wider economy
•
•
•
households. The same is true of households in which
the respondent is aged 25 to 34, 85 per cent of whom
gave this as an important factor, compared with the
national average of just 64 per cent.
Level of income from work, cost of living and, alone
among the Scandinavian countries, the national
or global economy are the three factors people in
Finnish households feel are most important when
assessing their household’s future financial situation.
Given that Finland is the only Nordic country in
the Eurozone, picking out the wider economy as a
strong financial factor could reflect a higher degree
of concern of the impact of Eurozone instability in
Finland.
Four in ten (42 per cent) of the financially secure
households in Finland give their level of savings as
an important factor when considering the future,
compared to around one in ten (12 per cent) of the
financially vulnerable.
•
More than three-quarters of households in the
financially secure group give their level of income
from work (78 per cent) as a key concern when looking
ahead. This drops to 56 per cent among respondents
from financially vulnerable households, possibly
indicating that fewer of them are in work.
•
Similarly, higher-income households are more
concerned by their level of income from work (77
per cent) compared to 57 per cent of lower-income
•
Payment protection insurance and private pension
provision are also of more concern to higher-income
households (nine per cent and eight per cent),
compared to lower-income households (four per cent
and four per cent).
•
In contrast, lower-income households are more
likely to be concerned about the cost of living (43
per cent), job security (ten per cent), and level of
welfare payments (19 per cent) than higher-income
households (34 per cent, six per cent and six per cent
respectively).
•
Older people – those aged 65 and over – are
particularly likely to take into account the national or
global economy when looking ahead (47 per cent).
The vast majority of older people are circumspect
(82 per cent), meaning that they are rarely in financial
difficulty but do not expect things to improve for
them. Altogether this seems to suggest that while
older people are less concerned by factors affecting
their household directly, they are more conscious
of external factors beyond their control. In contrast,
the likelihood that the wider economy is a concern
decreases with decreasing age, to just five per cent of
the under-25s.
Percentage (%)
Chart 9: Top three consumer financial issues, Finland
100
90
80
70
60
50
40
30
20
10
0
64
39
28
26
24
I 15
14
10
8
8
6
6
5
5
16
Secure Swedes score highly on Index
Economic Snapshot
Levels of household debt in Sweden are at an historic high,
having surged from 90 per cent of disposable income in
the mid-1990s to 170 per cent last year.
The major concern for policymakers is that the bubble in
house prices will burst. The IMF says prices are overvalued
by 11-12 per cent while the European Commission believes
it may be as high as 30-40 per cent.
The Central Bank is concerned that households with
interest-only mortgages will be at particular risk and has
warned of a correction.
Moves to limit borrowing by tightening rules on loan-tovalue (LTV) limits and imposing interest rate surcharges on
loans above 85 per cent of LTV have slowed credit growth
to around 5 per cent over the past year.
Lending by Swedish banks to households rose by 50 per
cent in the five years to 2011, driven by an 86 per cent rise
in mortgage lending.
New borrowers, above all in the metropolitan regions, are
significantly more indebted than average.
Much of the surge in debt has been driven by a boom in
house values. Prices climbed in real terms by 140 per cent
from a trough in 1996 to the pre-crisis peak of 2007. After a
mild dip in 2009, prices continued their upward journey.
Meanwhile, inflation expectations remain anchored near
the target, and inflation fell below 2 per cent in Jan-Mar
2012. Wages are expected to show growth of 3.2 per cent
in 2012.
Chart 10: 2012 Genworth index results in Nordic Market (Sweden)
100
Percentage (%)
90
80
71
67
70
60
52
47
50
24
21
20
10
0
Index Score
40
30
Financially secure
13
3
Norway
11
10
13
5
Sweden
Sweden
Denmark
Finland
I 17
Table 3:
Index Score,
Sweden
Index
Score
Financially
Secure
Circumspect
Strivers
Financially
Vulnerable
2007
73
28
61
8
3
2008
57
14
72
7
7
2009
60
19
68
7
7
2010
63
18
67
10
6
2012
67
21
69
5
5
Index Score
Sweden has performed well again on the Index, its
score of 67 showing a small increase since 2010. After a
slight dip in consumer financial security in 2008, at the
beginning of the global economic downturn, Sweden’s
score has risen steadily in each of the subsequent editions
of the Index. It is now fairly close to the 73 points it scored
on the first Index in 2007. This makes it one of the few
countries on the Index to recover its levels of security to
near ‘pre-crisis’ levels.
•
One in five households in Sweden (21 per cent) is
classed as financially secure in 2012. This is higher
than most other countries in Europe, bettered only by
neighbouring Norway (24 per cent).
Only one in 10
Swedish households
think that their future
financial situation will
get worse.
•
The large majority of households in Sweden (69 per
cent) are classed as circumspect. Like the financially
secure, circumspect households have rarely
experienced financial difficulties, but unlike them,
they do not expect their situation to improve in the
coming months.
•
Despite high levels of household debt, only one in ten
Swedish households frequently experience financial
difficulty.
•
Five per cent of Swedish households are classed as
strivers, defined as those households experiencing
financial difficulties but expecting their situation to
improve.
•
A further five per cent of households are classed
as financially vulnerable in 2012. This represents a
marginal decrease from 2010, though still more than
in 2007 (when three per cent were vulnerable).
18
Sweden: Top Consumer Financial Issues
Cost of Living; Income from work; Job Security
•
•
Cost of living, level of income from work and job
security are the three factors that most concern
Swedish households when assessing their financial
situation over the next 12 months.
There are very few regional variations in Sweden,
suggesting that the factors concerning households
are similar throughout the country. However, concern
about the national or global economy does vary
depending on where people live. Households in the
far south are considerably more likely to cite this as a
concern (19 per cent) than households in the western
region (seven per cent).
•
In addition to this, almost a quarter (24 per cent) of
households classed as having a high income are
concerned about job security, compared to half that
number (12 per cent) among low-income households.
•
Swedish households, where the respondent is
educated to tertiary level, are more concerned about
level of income from work than those with only a basic
level of education (31 per cent compared to 8 per
cent).
•
Notably, six per cent of Swedish households in the
financially secure group see payment protection
insurance as one of the most important factors when
looking ahead. This compares to just two per cent
across all households in Sweden.
Concerns about the national or global economy also
vary by households’ income levels. 17 per cent of
those in the highest income category are concerned
Chart 11 Top three consumer financial issues, Sweden
100
Percentage (%)
•
about the national or global economy when
looking ahead. This compares with eight per cent of
households in the lowest income category.
80
60
40
20
33
26
24
16
13
12
0
12
10
9
6
5
2
3
I 19
Norway maintains European lead in financial
security
Economic Snapshot
So far, Norwegian homeowners have been protected
by the drop in interest rates, as around 95 per cent of
mortgages are at variable rather than fixed rates.
Norwegians currently enjoy one of the most benign
scenarios of any advanced economy. Economic growth
remains robust while employment is rising at a brisk pace
and unemployment remains low and stable.
Prospects of relatively low interest rates and high income
growth going forward mean that homeowners are likely
to remain stress-free. Indeed, house prices are still rising
faster than incomes.
Wages are rising at around 4 per cent year but inflation
ended 2012 at just 1.4 per cent, giving households a boost
in terms of real income growth.
The Central Bank left rates on hold at 1.5 per cent in
December 2012, where they had been fo10 months.
However, this is offset by the fact that households have
large amounts of debts, which means they are vulnerable
to any future rises in interest rates. Cost of living is also
high.
However, financial markets expect a 0.25 percentage point
rate hike by the end of 2013 with some forecasting rates at
2.5 per cent by the end of 2014. This will threaten to hurt
highly-indebted households.
In the run-up to the recession, household debt, mainly
mortgage loans, increased rapidly, reaching 200 per cent
of disposable income by early 2008. This is double the
average for the euro area.
Chart 12: 2012 Genworth index results in Nordic Market (Norway)
100
90
Percentage (%)
80
71
67
70
60
52
47
50
24
21
20
10
0
Index Score
40
30
Financially secure
13
3
Norway
Norway
11
10
13
5
Sweden
Denmark
Finland
20
Index
Score
Table 4:
Index Score,
Norway
Financially
Secure
Circumspect
Strivers
Financially
Vulnerable
2007
70
27
60
8
4
2008
62
20
67
6
7
2009
74
19
71
8
2
2010
71
19
72
7
3
2012
71
24
68
5
3
Index Score
Norway’s second successive Index score of 71 makes it
the most financially secure European country, and places
it second on the Index, behind China. The economic
problems encountered by many European countries seem
to have bypassed Norway, which has had consistently high
scores on the Index since its inception in 2007.
•
Almost a quarter (24 per cent) of households in
Norway are classed as financially secure in 2012.
Almost half of
Norwegian households
give their level of
income from work as an
important factor when
assessing their future
•
A large subset of these (some 14 per cent of all
Norwegian households) report that they never
have financial difficulties, while also expecting their
financial situation to improve.
•
The circumspect group – the group that have rarely
experienced difficulties and who tend to expect their
situation to remain the same – comprises over twothirds (68 per cent) of households in Norway.
•
Only three per cent of Norwegian households are
classed as financially vulnerable.
Norway: Top Consumer Financial Issues
Income from work; Savings Levels, Job Security
•
Level of income from work, level of savings and job
Norwegian households when assessing their financial
•
Almost half of Norwegian households give their level
of income from work as an important factor when
assessing their future financial situation.
•
Women responding to the survey in Norway are
more likely than their male counterparts to see their
household’s level of savings as important when
looking ahead (32 per cent of women, compared
with 22 per cent of men).
•
There are also some differences by socio-economic
characteristics. High-income households (25 per cent)
are more likely than low-income households (16 per
cent) to see the national or global economy as an
important factor when looking ahead. And, compared
with the average for Norway (16 per cent), those with
only basic levels of education are more likely to be
concerned by the level of welfare benefits (36 per
cent).
•
There is very little variation by region in Norway. The
one exception relates to concerns about households’
level of consumer borrowing. Compared with six per
cent of households nationally, this is much more likely
to be a concern in the north of the country (13 per
cent) and much less likely in mid-Norway (one per
cent).
Percentage (%)
Chart 13: Top three consumer financial issues, Norway
100
90
80
70
60
50
40
30
20
10
0
48
27
26
20
19
16
I 21
12
7
7
6
3
2
2
22
Over a quarter of French households now
financially vulnerable
Economic Snapshot
The stagnant economic growth seen over the last year is
taking its toll on French households. Unemployment looks
set to breach the psychologically significant 10 per cent
mark this year (2013) and could rise as high as 11.25 per
cent, according to the OECD.
While wage growth is likely to be weak, anaemic
GDP growth rates will mean inflation is expected to
fall gradually to below 1.5 per cent, which will boost
households’ real incomes.
agents, house prices fell by an average of 1.3 per cent
during 2012. However, this masks much steeper falls of
around 8 per cent in some rural regions of France such as
Brittany and Normandy.
The house price boom in the years leading up to the crash
encouraged buyers to take on large mortgage debts.
Record low interest rates have meant that the cost of
servicing the debt has remained low.
French households are protected to some degree from
the impact of stagnant growth as they have tucked away
more than 15 per cent of their disposable income into
savings accounts each year during the crisis.
According to the national association of French estate
Chart 14: 2012 Genworth index results (France)
100
90
70
60
50
40
71
67
52
47
39
38
36
30
32
29
17
20
10
0
Fr
an
ce
Percentage (%)
80
13
11
6
1
I 23
Table 5:
Index Score,
France
Financially
Vulnerable
Index
Score
Financially
Secure
Circumspect
2007
47
12
53
19
16
2008
38
7
55
16
22
2009
38
7
56
17
21
2010
39
7
57
17
19
2012
36
7
52
15
26
Strivers
Index Score
•
One of the ten countries featuring on the Genworth Index
since 2007, France has an appreciably lower financial
security score in 2012, of 36, than it recorded in 2007,
when it scored 47. Even so, France’s story is mainly one
of consistency – with the Index score settling between
36 and 39 in the past four editions. The percentage of
financially secure households in the country has also
stayed the same for the fourth successive year, although
the percentage of vulnerable households has significantly
increased.
•
For the fourth year in a row, seven percent of
households in France are classed as financially secure.
However, this is almost half the level of financially
secure households that were on the original Index, in
2007.
More than a quarter
(26%) of French
households are now
classed as vulnerable,
compared to 19 per
cent in 2010.
The percentage of French households in both the
circumspect (52 per cent) and the striver (15 per cent)
groups has fallen since the 2010 Index. Circumspect
households have rarely experienced financially
difficulty, but don’t expect any further improvement
in the future. Strivers have experienced difficulty, but
have a positive future outlook. The French population
is more polarised now, with less ‘in betweens’ and
more ‘vulnerables’.
•
The reduction in the sizes of these two groups
has resulted in a large increase in the financially
vulnerable group. More than a quarter (26 per
cent) of households are now classed as vulnerable,
compared to 19 per cent in 2010.
24
France: Top Consumer Financial Issues
•
As with many other countries, cost of living, job
security and level of income from work are the three
most important factors for French households when
assessing their future financial situation.
•
More than a third of French households give job
security as a concern when looking ahead. This is
unsurprising given the struggling economy, and the
rising unemployment rate in the country.
•
The main differences in France are between
financially vulnerable and financially secure
households. More than eight in ten households (82
per cent) classed as financially vulnerable in France,
report cost of living as one of their main concerns
when assessing their future financial situation. This
compares with only 44 per cent of the financially
secure.
•
Nearly a quarter (22 per cent) of the financially
vulnerable give private pension provision as a concern
when looking ahead, compared to just six per cent of
the financially secure group.
•
Meanwhile, levels of savings (40 per cent) and job
security (58 per cent) are of much greater concern
to the financially secure group than the financially
vulnerable group (15 per cent and 25 per cent
respectively).
•
Householders’ concerns also vary depending on
where in the country they live and their levels of
education. While a third (33 per cent) of households
in the Parisian region are concerned about their level
of savings, the same applies to only 15 per cent of
households in the Mediterranean region, and just 12
per cent in the south-east of the country.
•
Compared to the national average of 22 per cent,
those with the lowest level of education (no diploma)
are less likely to give the national or global economy
as one of the main concerns when looking ahead (12
per cent).
•
Those with the lowest level of education are also less
likely to be concerned about the cost of long-term
care than those with a university education (11 per
cent compared to 34 per cent).
Chart 15: Top three consumer financial issues, France
Percentage (%)
100
71
80
60
40
36
29
22
21
20
20
0
16
14
8
6
9
9
1
I
25
Scepticism Dominates in Germany
Economic Snapshot
Much of that is due to the fact that house prices in
Germany stagnated between 1999 and 2008. While many
countries are seeing falls in property values, Germany’s
market is rising.
As one of the alleged ‘winners’ from the European
economic crisis, it should be no surprise that German
households are doing well in terms of income and wealth.
In the year to June 2012 house prices rose by 10 per
cent, the fastest rate for any major economy bar Brazil,
according to the IMF. Borrowers are still cautious, with 70%
of newly issued loans in June 2012 coming with a fixed
interest rate of at least five years.
Unemployment remains close to historic lows and skills
shortages have emerged in key sectors, which have had
the effect of boosting wage growth. Average earnings are
expected to rise by between 3-4 per cent over the next
two years, outstripping inflation expectations of around 2
per cent.
However, it is worth pointing out that economic growth
and job creation have both stalled as the euro crisis has
intensified over the latter half of 2012.
The household savings ratio has been stable at around
10 per cent for the last three years while leverage in the
household sector – the ratio of debts to income - is low in
comparison to other euro area economies.
Chart 16: 2012 Genworth index results (Germany)
100
90
80
60
50
40
67
52
47
39
38
36
32
29
30
17
20
10
0
G
er
m
an
y
Percentage (%)
70
71
13
11
6
1
26
Table 6:
Index Score,
Germany
Index
Score
Financially
Secure
Circumspect
Strivers
Financially
Vulnerable
42
7
71
7
15
2008
26
3
63
5
29
2009
33
4
72
5
19
2010
30
4
66
5
25
2012
29
3
69
5
22
2007
Index Score
Considering its reputation as an economic powerhouse in
Europe, Germany’s Index score remains surprisingly low
this year. At 29 points on the 2012 Index, the overall trend
is one of decline – having entered the Index in 2007 with a
score of 42.
•
•
Three per cent of German households are classed
as being financially secure in 2012. Compared to
2010, there is very little change in the composition of
German Index groups. But it is surprising that this is
only about a third of the number of financially secure
households in the UK, and half that of Ireland.
This results in a pretty bleak consumer
financial outlook, with less than
More than a quarter
(26%) of German
households expect
their financial situation
to get worse.
one in 10 households thinking their economic
situation will improve over the next 12 months, along
with 20 per cent who think that their financial situation
will get worse.
•
A small drop in the proportion of financially vulnerable
households (from 25 per cent to 22 per cent) since
2010 is reflected in a commensurate increase in the
number of circumspect households (66 per cent to 69
per cent).
•
It is interesting that the number of German
households classed as financially vulnerable (22 per
cent) is so similar to other countries with economies
that are currently under much more pressure, such as
France (26 per cent) and the UK (21 per cent).
Germany: Top Consumer Financial Issues
Cost of Living; Income from work; Job Security
•
Cost of living, level of income from work and job
German households when assessing their financial
•
Compared with the average (65 per cent), financially
vulnerable households are particularly likely to be
concerned about the cost of living (79 per cent).
•
The cost of living is also a prominent concern among
lower-income households in Germany.
•
•
Three-quarters of lower-income households (74 per
cent) see cost of living as an important factor when
thinking of their future financial situation, compared
to just over half (55 per cent) of higher-income
households.
And while only 11 per cent of lower-income
households give private pension provision as a
concern, this compares to over a quarter (27 per cent)
of higher-income households.
•
Differences also emerge depending on whether
households are living in the north or south of the
country. Private pension provision is a more common
concern among people in the south of Germany (29
per cent) than in the north (18 per cent), as is level
of income from savings (19 per cent in the south
compared to nine per cent in the north).
•
On the other hand, households in the north of the
country (35 per cent) are more likely to see income
from work as an important factor than those in the
south (25 per cent).
•
Interestingly, the extent to which householders
see the national or global economy as impacting
their future financial situations varies by education
level. Only seven per cent of householders with the
lowest levels of education are concerned about this,
increasing to 19 per cent among those who have
received education beyond secondary level.
Chart 17: Top three consumer financial issues, Germany
Percentage (%)
100
60
40
20
65
31
30
23
20
13
0
27
•
In comparison, twice as many higher-income
households (13 per cent) give income protection
insurance as one of their main concerns looking
ahead, when compared to lower-income households
(six per cent).
80
I
12
10
9
8
7
5
4
28
British maintains Index stability but financially
vulnerable numbers rise
Economic Snapshot
the late 1980s crash. According to the Central Bank, 12 per
cent of households had an agreement in place with their
lender.
Britons have been hit hard by a recession that has left
the economy some 3 per cent smaller than at the peak.
Growth has stagnated over the last two years.
Another positive is that unemployment has not increased
as much as feared, while employment has risen.
Household debt rose from 57 per cent of GDP to 109 per
cent between 1987 and the start of recession in 2008,
mostly to cover house purchases.
House prices fell by around 20 per cent between 2007 and
2009. As a result, at the beginning of 2011 around 827,000
households, or one in 12, had some negative equity –
meaning their home was worth less than the debt against
it.
So far debt difficulties have been kept under control by
low interest rates and the greater use of forbearance by
lenders, which has kept repossessions much lower than in
However, poorer families are under more pressure.
According to the Resolution Foundation, borrowers in
the poorest tenth of families spent just under half their
monthly income on repayments in 2011, compared with an
average of 9 per cent for the richest tenth.
It found 3.6 million households were “debt-loaded”,
meaning they spent more than a quarter of income on
debt repayments and had little cushion against future
financial shocks.
Chart 18: 2012 Genworth index results (Great Britain)
100
80
70
60
50
71
67
52
47
39
40
38
30
36
32
29
17
20
10
0
G
re
at
Br
ita
in
Percentage (%)
90
13
11
6
1
I
29
Index
Score
Financially
Secure
Circumspect
Strivers
Financially
Vulnerable
60
17
64
12
7
2008
38
8
62
8
22
2009
45
9
62
15
14
2010
40
8
63
9
20
2012
39
8
61
10
21
2007
Table 7:
Index Score,
Great Britain
Index Score
•
The proportion of British households classed as
financially secure holds steady from 2010 (eight per
cent in each year). Interestingly, this is higher than
the number of German housholds (three per cent).
•
Looking back to 2007, the number of financially secure
households has more than halved, while the number
of financially vulnerable households has trebled.
Great Britain scored 39 out of a possible 100 on the 2012
Index of financial security similar to its 2010 score of 40.
This places Great Britain between Finland and Turkey
among the other European countries on the 2012 Index,
and shows that the balance here remains tipped towards
vulnerability rather than security. Despite this apparent
stabilisation, the contrast with the period immediately
before the recent economic turmoil is stark. In 2007,
Great Britain scored 60 on the Index of financial security,
meaning that the score is now 21 points lower than when
the Index began.
Only 18% think their
financial situation
will improve over the
next 12 months.
30
Great Britain: Top Consumer Financial Issues
Cost of Living; Income from work; Savings Levels
•
The cost of living, level of income from work and level
of savings are the three most important factors that
people in Great Britain consider when assessing their
household’s future financial situation.
•
Job security is also an important factor, with 31 per
cent of British households seeing this as one of their
three most important factors when looking ahead.
•
Level of savings rank higher as a factor in the UK than
for most other European countries, with the notable
exception of Italy.
•
A half of British households (51 per cent) see the
cost of living as key when thinking about their
household’s financial situation over the next 12
months.
•
Compared to this national figure of 51 per cent, only
24 per cent of householders in London report cost
of living as an important factor when assessing their
future financial situation. Their main concerns are level
of income from work (50 per cent), and level of savings
(40 per cent).
•
Only three per cent of Londoners give social security
payments as one of their top three factors when
assessing their financial situation. This may reflect
the younger and more affluent demographic in the
capital. In stark contrast, 17 per cent of households
in Scotland see social security payments as a major
concern.
•
Social grade seems an important characteristic
in determining what factors British householders
consider to be important. Those in social grades
D and E are more concerned with social security
payments than those from grades A and B (20 per
cent compared to seven per cent respectively), most
likely reflecting their greater reliance on state support.
•
In contrast to these, householders in social grades A
and B are more concerned with level of income from
work (47 per cent); private pension provision (19 per
cent); and level of savings (38 per cent).
•
Level of savings also features highly among the
top concerns expressed by financially secure and
circumspect householders. In contrast, those
struggling the most (the financially vulnerable and
strivers) are less inclined to consider level of savings
as an important factor in their future wellbeing.
Chart 19: Top three consumer financial issues, Great Britain
Percentage (%)
100
80
60
40
20
51
40
32
31
14
14
0
18
11
11
6
3
1
0
I 31
Ireland regains Index stability
Economic Snapshot
The Irish have lived through a painful four years of austerity
that has taken its toll on jobs and living standards, as
consumers and homeowners have sought to pay off their
debts.
House prices have halved since their peak in 2007 and
fell by 8.1 per cent in the year to October 2012, meaning
more homeowners will find themselves in negative equity.
Households are laboring under debts that are on average
twice their annual disposable income.
Almost one in seven people (15 per cent) is out of work, of
whom 60 per cent have been jobless for over a year, while
a third of young people are unemployed.
The bursting of the house price bubble has had a major
effect on living standards. The number of mortgages in
arrears by more than 90 days has jumped from 4.5 per
cent of the total at the end of 2009 to 14.7 per cent by mid2012.
According to EU data, living standards as measured
by national income per head fell by almost 20 per cent
between 2007 and 2011.
Research by the Central Bank suggests that past jobs and
income losses are the primary drivers for borrowers to fall
behind on their mortgage payments.
Meanwhile a study by Trinity College Dublin found lowincome families and the unemployed do not have enough
money to achieve a basic standard of living.
Chart 20: 2012 Genworth index results (Ireland)
100
90
70
60
50
40
71
67
52
47
39
38
36
32
30
10
0
29
17
20
Ire
la
nd
Percentage (%)
80
13
11
6
1
32
Table 8:
Index Score,
Ireland
Index
Score
Financially
Secure
Circumspect
Strivers
Financially
Vulnerable
2007
58
17
66
9
8
2008
25
3
58
4
34
2009
19
2
57
2
39
2010
32
5
64
6
25
2012
32
6
49
11
34
Index Score
•
Having said that, Ireland’s levels of financially
vulnerable (34%) compare favourably to some of the
other challenged Eurozone countries such as Italy
(47%) and Spain (41%). And are less than half the
number of financially vulnerable in Portugal (69%) and
Greece (80%).
•
Perhaps surprisingly, Ireland also scored over 30%
better on financial vulnerability than stronger
economies such as Poland (45%).
•
The percentage of households in the circumspect
group (those who rarely experience financial
difficulties but don’t expect their situation to
improve) has fallen from almost two-thirds (64 per
cent) to less than a half (49 per cent).
•
Meanwhile the number of strivers – those who expect
their financial situation to improve – has almost
doubled (to 11 per cent).
After the volatility of the scores in previous editions of
the Index, following the collapse of the Irish economy,
Ireland’s score of 32 suggests greater stability in the
country in 2012. While it has climbed from the nadir of
2009, there is clearly a long way to go in the Irish recovery
to reach the levels of financial vulnerability 2007 when an
Index score of 58 was recorded.
•
•
While only six per cent of Irish households are classed
as financially secure, this has trebled from just two per
cent in 2009. Even so, the number of financially secure
households in Ireland on this year’s Index remains
three times lower than in 2007.
Over the same period there are four times the
number of households that are classed as financially
vulnerable now compared with 2007, including an
increase from 25 per cent in 2010 to 34 per cent in
2012.
The number of
financially vulnerable
households in Ireland
has increased from a
quarter (25%) in 2010 to
over a third (34%) on this
year’s Index.
•
Those classed as social grade A and B, in comparison,
are more likely than the other social grade households
to be concerned with job security (32 per cent
compared to 13 per cent).
•
As in many other countries, financially vulnerable
households are much more concerned about the cost
of living (59 per cent) than the financially secure (31
per cent).
Social grade D and E households are also more
concerned about the cost of long-term care (22 per
cent) and the level of welfare payments (33 per cent)
than social grades A and B (six per cent and seven per
cent respectively).
•
Despite four years of austerity, it is surprising that
only 19 per cent of Irish households see the national
or global economy as one of the most important
factors affecting their future financial situation.
Payment protection insurance (39 per cent), the level
of income from work (25 per cent) and the level of
savings (22 per cent) are particularly important among
households in social grades A and B.
•
There are also differences depending on the gender
of the respondent. Women are more likely to be
concerned about the cost of long term care than men
(14 per cent compared with nine per cent). Men are
more likely to be concerned with private pension
provision (18 per cent compared to ten per cent of
women).
Ireland: Top Consumer Financial Issues
•
•
•
•
I 33
The cost of living, job security and level of income
from work are the three factors that most concern Irish
households when assessing their financial situation
over the next 12 months.
The factors that concern Irish households the most
when looking ahead vary considerably by their social
grade. Irish households from social grades D and
E are more commonly concerned about the cost of
living (58 per cent) than those in the social grades A
and B (41 per cent).
Chart 21: Top three consumer financial issues, Ireland
Percentage (%)
100
80
53
60
40
29
29
24
19
18
20
0
15
14
14
11
8
8
4
34
Italians feel more vulnerable: Lack of optimism for
the future
Economic Snapshot
The crisis does not seem to have significantly changed the
indebtedness of Italian households, which does not seem
to be a major threat. Only 0.6 per cent are unable to meet
interest payments.
Italians have become poorer thanks to the Eurozone
crisis. Gross earnings shrank in real terms last year while
households’ gross financial wealth declined slightly.
Households that use a third of household income to meet
interest payments amount to just 2.2 per cent of the total.
The net result was that real disposable income contracted
by 3.9 per cent in the first half of 2012 compared with
a year earlier. Consumer spending and consumer
confidence are both on the decline.
Debt service costs are being kept down principally by
low interest rates. The main risks to households therefore
come from the continued sluggishness of income growth
and the risk of any rise in market interest rates.
Despite that, the saving rate has fallen to just over 8 per
cent, which may be a sign of consumers’ determination to
cut their spending only gradually.
According to the Central Bank, households’ financial
situations remain “balanced overall”, thanks to their
relatively modest debt and large proportion of financial
wealth held in the form of low-risk assets such as
government bonds.
Chart 22: 2012 Genworth index results (Italy)
100
80
70
60
50
40
71
67
52
47
39
38
30
20
36
32
29
17
13
10
0
Ita
ly
Percentage (%)
90
11
6
1
I
35
Index
Score
Financially
Secure
Circumspect
Strivers
Financially
Vulnerable
31
5
59
7
29
2008
21
3
54
6
38
2009
30
4
63
8
25
2010
24
3
55
6
36
2012
11
1
50
2
47
2007
Table 9:
Index Score,
Italy
Index Score
Italy is one of the worst performing countries on the Index
in 2012, scoring 11 points on the 2012 Index, compared
to 24 in 2010. Almost a half of all households in Italy are
now classed as financially vulnerable and only one per
cent as financially secure, highlighting a widespread lack
of optimism among Italian households. The dramatic
decline in Italy resembles the situation in Portugal, Spain
and Greece.
Almost half of all
Italian households
on the Index (47%)
are financially
vulnerable.
•
Only one per cent of households in Italy are classed
as financially secure on the 2012 Index. This has fallen
from five per cent in 2007, and three per cent in 2010.
•
Only two per cent of households in Italy are classed
as strivers (who think their financial situation will
improve, despite experiencing financial difficulties),
while half (50 per cent) are circumspect (rarely
experiencing financial difficulty, but who do not
think their situation will improve).
I
36 Genworth Index: Measuring Consumer Financial Security and Vulnerability
Italy: Top Consumer Financial Issues
Cost of Living; Savings Levels; Job Security
(18 per cent) compared with only seven per cent in the
northwest.
•
The cost of living, level of savings and job security
are the three most important factors people in Italy
consider when assessing their household’s future
•
Housing payments are a particular concern for
households in the northwest (20 per cent) and the
south (22 per cent), compared with only seven per
cent of households in northeast Italy.
•
Where survey respondents have postgraduate
education, job security is particularly likely to be a
concern when looking ahead. 31 per cent of them
give this as a concern, compared to seven per cent of
those with just high school education.
•
Over a quarter of households (26 per cent) in the
central region are concerned about the level of
income from their savings, compared to just 12 per
cent in the northwest.
•
•
There are some significant variations by region in
Italy, reflecting the contrasting economic nature of
the north and south of the country. The northwest in
particular stands out.
Only three per cent of households in southern regions
give income protection insurance as a major concern,
compared to 14 per cent in the centre of the country
and nine per cent in the northwest.
•
The cost of long-term health care seems to be more
of an issue for households in the central region of Italy
Chart 23: Top three consumer financial issues, Italy
Percentage (%)
100
71
80
60
40
36
29
20
22
20
0
21
16
14
8
6
9
9
1
I
37
Economic uncertainty troubles Spanish
Economic Snapshot
Spain is set to endure its fifth successive year of recession
in 2013, as the impact of the bursting of a property
bubble and austerity measures to deal with the euro crisis
continue to hit households.
Households’ financial positions have deteriorated
markedly. An increase in unemployment and decline
in house prices has increased the stress to households’
income and cut the value of their assets.
correction is still underway with the general house price
index plunging 10.8 per cent in the year to June 2012.
Weakening disposable income and falling housing values
have forced households to resort to using their savings to
meet debt payments and the household savings ratio has
fallen back to pre-crisis levels.
Employment has contracted rapidly and the
unemployment rate has risen above 25 per cent thanks to
fiscal austerity and tight financial conditions. Almost half
of all 15-24 year olds are jobless, a third have dropped out
of school, and those with jobs are largely on temporary
contracts.
Gross disposable income declined by about 0.7 per cent
over the four years to 2011. Household debt remained
relatively stable with a fall of just 0.5 per cent from the
peak of 2008, meaning that households are still labouring
under a large debt burden.
House prices are in freefall. Property prices have slumped
more than 30 per cent since the peak in 2007. The
There is a rising income gap between permanent and
temporary workers, with close to three quarters of
temporary workers in the bottom half of the income
distribution.
Chart 23: 2012 Genworth index results (Spain)
100
90
70
60
50
40
71
67
52
47
39
38
30
20
36
32
29
17
10
0
Sp
ai
n
Percentage (%)
80
13
11
6
1
38
Table 10:
Index Score,
Spain
Index
Score
Financially
Secure
2007
42
2008
Financially
Vulnerable
Circumspect
Strivers
8
67
8
17
27
4
52
6
37
2009
34
6
58
9
27
2010
34
7
53
8
32
2012
17
2
48
9
41
Index Score
•
Reflecting the ongoing economic crisis in Spain, the
Index score falls to just 17 points, half that recorded in
the previous Index in 2010. This is explained by a drop
in the percentage of households classed as financially
secure, and a significant increase in the number of
financially vulnerable households. The Spanish score is
now stronger only than Italy, Poland, Portugal and Greece,
whereas in 2010, Spain’s Index score was more aligned
with France, Germany and the UK.
Almost a third
(32%) of Spanish
households think that
their future financial
situation will get
worse.
Only two per cent of households in Spain are classed
as financially secure in 2012, about three times fewer
as in 2010 (seven per cent). And just nine per cent
are classed as strivers (those who often experience
financial difficulties but who expect their situation to
improve in the coming months)
•
The circumspect group – those rarely experiencing
financial difficulties and not expecting things to
improve – accounts for almost half of Spanish
households (48 per cent).
•
Over four in ten households (41 per cent) are classed
as financially vulnerable. This has risen from 32 per
cent in 2010, and just 17 per cent in 2007.
Spain: Top Consumer Financial Issues
Wider Economy; Income from Work; Cost of Living
•
The three most pressing concerns for the Spanish are
the national or global economy, level of income from
work and cost of living.
•
In fact, Spain is the only country on the Index to
give the state of the economy as one of the most
important factors when assessing the future financial
situation. Spain’s results reflect the ongoing
recession in a country where there are almost six
million people out of work (or more than 26 per cent
of the working age population of Spain).
•
Almost four in every ten households report that they
are worried about the economy when thinking about
Percentage (%)
39
38
37
32
There are very few variations in the extent to which
households in Spain consider different factors
important when looking ahead, the exception being
level of education.
•
Spanish households classed as having higher levels
of education (second grade, first circle and above) are
more likely than those with lower levels of education
to be concerned with job security (37 per cent
compared to 19 per cent) and level of income from
work (44 per cent compared to 21 per cent).
23
39
•
Chart 24: Top three consumer financial issues, Spain
100
90
80
70
60
50
40
30
20
10
0
I
22
17
15
13
4
4
3
3
40
Vulnerable Portugal plummets on Index
Economic Snapshot
For now the cost of servicing the debt is manageable due
to low mortgage rates, although households will come
under pressure if market interest rates rise.
The Portuguese economy is in the grip of a severe
recession. The economy contracted at an annual rate of
3.5 per cent in the third quarter of 2012 following a 3.1
decline in the second quarter.
One concern is falling house prices. During the year
to September 2012, the average property price in the
country plunged by 7.0 per cent.
Consumers are pulling in their horns with retail sales
dropping 6.5 per cent in the third quarter of 2012 and
sales of cars slumping by 33 per cent.
The volume of loans to households for house purchase
fell 3.4 per cent in the year to October 2012, while loans
for consumption and other purposes fell at the even faster
rate of 8.1 per cent.
Indeed, the Central Bank has called for close monitoring
given rising unemployment and income losses. Unemploy
-ment is currently 15 per cent, of whom almost half are
long-term.
Households have accumulated total debts equivalent to
one year’s economic output, despite the fact that Portugal
did not experience a property boom in the run-up to the
crisis.
Chart 25: 2012 Genworth index results (Portugal)
100
90
70
60
50
40
71
67
52
47
39
38
36
30
20
10
32
29
17
13
11
6
0
Po
rtu
ga
l
Percentage (%)
80
1
Index
Score
Financially
Secure
Circumspect
Strivers
Financially
Vulnerable
33
7
56
5
32
2008
15
2
31
5
61
2009
28
5
48
8
39
2010
17
3
38
9
51
2012
6
1
27
3
69
2007
Table 11:
Index Score,
Portugal
Index Score
The Portuguese are among the least financially secure
households on the Index. One of ten countries included
in all five editions of the Index, Portugal’s 2012 score of six
is less than half of its previous low of 15 recorded in 2008
and is a third of Spain’s 2012 score (17). Its baseline score
of 33 in the original Genworth Index of 2007 was more
than five times higher than its current Index score.
•
Optimism for the future is clearly low in Portugal, with
only one per cent of households classed as financially
secure and a further three per cent classed as strivers
(those who have experienced financial difficulties
at least sometimes but expect their future financial
situation to improve).
Almost four in ten
households (38%) in
Portugal find themselves
in the worst situation,
in often experiencing
financial difficulties while
also expecting their
situation to get worse.
•
Almost seven in ten Portuguese households (69
per cent) are classed as financially vulnerable. This
represents a considerable increase from 2010
(when 51 per cent were vulnerable) and again
since 2009 (when 39 per cent were vulnerable). It
is also significantly higher than the 41% of Spanish
households classed as financially vulnerable.
•
The only country with a greater proportion of
financially vulnerable households than Portugal in
2012 is Greece.
I 41
42
Portugal Consumer issues
Cost of Living; Long Term Care; Job Security
•
The cost of living, the cost of long-term care and job
security are the three main concerns of Portuguese
households when assessing their future financial
situation.
•
Although both Spanish and Portuguese households
were concerned about the cost of living, the other
major factors were different, with Spain identifying
the wider economy and level of income from work,
instead of the cost of long term care and job security.
•
Households in Portugal are particularly concerned
about the cost of long-term care when looking
ahead. Four in ten give this as one of their three main
concerns for their future financial security. It is the
only Index country for which long-term care emerges
as one of the three main issues households are
•
Households represented by a woman (13 per cent) are
more likely than men (seven per cent) to give rent or
mortgage payments as one of their main concerns.
•
There are interesting differences depending on
whether respondents had attained higher or lower
levels of education. Those with lower levels of
education (first five years at high school and below)
are particularly concerned by the cost of living (75
per cent) and the cost of long-term care (45 per cent),
compared to 64 per cent and 23 per cent respectively
of higher-income households.
•
In contrast, those with higher educational
qualifications (graduating from high school and
above) are more likely to cite job security (52 per cent),
level of income from work (42 per cent), and level
of consumer borrowing (six per cent) as important
factors (compared to 31 per cent, 25 per cent and two
per cent respectively of those with lower education).
•
Where people live also plays a role in Portugal. While
almost a half of households (45 per cent) in the Lisbon
region are concerned by job security, less than a
quarter (24 per cent) share this concern in the interior
region.
•
Ten per cent of households in the Greater Oporto
region give housing or mortgage payments as one of
their main concerns compared with just four per cent
within the central (Littoral) region.
•
The ongoing recession in the country is clearly having
an impact on households’ assessments of their
financial future. Almost a quarter of households (22
per cent) nationally see the state of the national or
global economy as an important factor when looking
ahead. This is higher in the Greater Oporto region (38
per cent) than in the interior region (19 per cent).
concerned about.
•
As would be expected, concerns about the cost of
long-term care increase with age. Still, the difference
is striking with almost seven in ten (69 per cent) of
Portuguese households where the respondent is 65
and over giving this as a main concern, compared to
39 per cent overall.
Older people are also more likely to be concerned
about their household’s level of savings. 41 per cent
of people aged 65 and above give this as one of their
main concerns, compared to just 26 per cent of those
aged 35 to 44.
Chart 26: Top three consumer financial issues, Portugal
100
72
Percentage (%)
•
80
60
40
39
36
33
28
20
0
29
11
5
7
3
3
1
1
I 43
Polish pessimism, despite relative economic
strength
Economic Snapshot
between the first and second half of 2012.
Despite being the only European economy to avoid
recession, Poland’s households are now cutting spending
in the face of low real wage growth and slowing
employment growth.
Households will get some relief from a slowdown in
inflation from 4.3 per cent last year to 2.7 and 2.5 per cent
in 2013 and 2014 respectively, according to the IMF.
The Central Bank cut rates to 4.5 per cent in November
after worse than expected economic data for September.
Real wages have been declining since July 2012 while
private sector employment fell 0.7 per cent between
January and September 2012. The unemployment rate
broke through the 10 per cent barrier in the second
quarter of 2012.
Poland’s housing market was Europe’s second-worst
performer in 2011, down by 10.6 per cent albeit improving
marginally to minus 8 per by June 2012.
Despite a marked slowdown in consumer spending and
retail sales, the savings rate has fallen to zero which may
indicate households are building up problems for the
future.
Although household debt has fallen during the second
half of 2012, at 35.8 per cent it is still higher than it was
during the financial crisis.
Demand for new consumer loans has fallen to zero but
the interest rate on those loans increased significantly
Chart 27: 2012 Genworth index results (Poland)
100
90
70
60
50
40
71
67
52
47
39
38
30
20
36
32
29
17
13
10
0
Po
la
nd
Percentage (%)
80
11
6
1
44
Table 12:
Index Score,
Poland
Financially
Vulnerable
Index
Score
Financially
Secure
2007
-
-
-
-
-
2008
31
5
51
17
27
2009
20
3
43
8
46
2010
18
2
51
11
36
2012
13
1
48
6
45
Circumspect
Strivers
Index Score
•
Poland’s score on the Index has declined for the fourth
successive year and, standing at 13 in 2012, it is now
among the least financially secure countries covered
by the Index. This is driven by a fall in the number
of financially secure households year-on-year, and a
dramatic increase in the number of financially vulnerable
households since Poland was first included on the Index
in 2008. This is a surprisingly bleak picture for Poland,
with Polish households having a less positive outlook than
countries such as Spain and Ireland, whose economies
have been under considerably more pressure.
•
Only one per cent of Polish households are now
financially secure, a fall from five per cent in 2008
when the country first appeared on the Index.
•
Poland is one of four countries – along with Greece,
Italy and Portugal – to only have one per cent of
households classed as secure.
Given the comparative health of the Polish economy,
this is a surprising result that might be explained by
the low real wage growth and slowing employment
growth the country is experiencing.
Only 7% of
households in Poland
were optimistic about
situation.
Only six per cent of Polish households are classed
as strivers (those who have experienced financial
difficulties but expect their situations to improve). An
overwhelming majority of households in Poland (93
per cent) think their financial situation will get worse
or, at best, remain the same.
•
This is further underlined by the finding that most
households in Poland are either vulnerable (45 per
cent) or circumspect (rarely experience financial
difficulties but do not expect their situation to
improve; 48 per cent).
•
Financial vulnerability levels in Poland are more than
twice those in the UK, France and Germany, and at
least four times higher than the Nordic countries.
Despite its relative economic health, levels of
vulnerability are more akin to Italy (47%) and Spain
(41%).
Poland: Top Consumer Financial Issues
Cost of Living; Income From Work; Job Security
•
•
•
•
The cost of living, level of income from work and job
security are the three factors that most concern Polish
households when assessing their financial situation
over the next 12 months.
Low wage growth in Poland is reflected in the finding
that 39 per cent of households give level of income
from work as an important factor when looking
ahead.
The most notable differences between households
in Poland relate to the extent to which level of income
from work is considered an important factor.
Households represented by men in the survey are
also more likely than those represented by women to
be concerned with level of income from work (46 per
cent compared to 33 per cent of women).
•
Similarly, men were more likely than women to
see job security as an important factor for their
household (42 per cent of men compared to 28 per
cent of women).
•
On the other hand, households represented by
women are almost twice as likely as those represented
by men to see level of income from savings as a major
concern (15 per cent compared to eight per cent).
•
Notably, almost half (48 per cent) of all households
in the north of the country report housing payments
as an important factor when looking to the future,
compared to just 27 per cent of Polish households
nationally.
income households (32 per cent).
Chart 28: Top three consumer financial issues, Poland
Percentage (%)
100
60
40
20
53
39
34
27
21
12
0
45
•
Concern about levels of income from work is
particularly common among higher-income
households (48 per cent) compared with lower-
80
I
9
8
7
5
4
3
2
46
Consumer borrowing a concern for Turkish
households
Economic Snapshot
Employment rates, in particular those of women, are
traditionally low in Turkey, translating into a higher share of
households that depend only on one income earner and
thus reducing their ability to save.
After enjoying two years of 9 per cent economic growth,
2012 saw a marked deceleration to 3 per cent. Combined
with annual inflation of almost 9 per cent last year, this has
hit the wallets of Turkish households.
Strong growth during the post-crisis recovery encouraged
Turks to go on a spending spree. As a result the ratio of
household debts to national income rose as well.
The ratio of households’ debts to assets has increased
rapidly albeit from low levels, to around 46% by the end of
2011.
Steps taken by policymakers have led to a slowdown in
the growth in consumer debt. The burden of interest
payments as a share of household disposable income has
stabilised at below 5 per cent, while the number of nonperforming loans has fallen.
Turkey’s national saving rate has fallen dramatically over
the last 15 years, from some 25 per cent of GDP in the late
1990s to less than 15 per cent last year.
This decline has been larger than in any G20 country
and stands in stark contrast to the experience in peer
emerging economies. The Central Bank aims to encourage
household savings through reforms to personal pensions
and by raising awareness about savings
Chart 29: 2012 Genworth index results (Turkey)
100
90
70
60
50
71
67
52
47
39
40
38
36
30
32
29
17
20
10
0
Tu
rk
ey
Percentage (%)
80
13
11
6
1
I 47
Table 13:
Index Score,
Turkey
Index
Score
Financially
Secure
Circumspect
Strivers
Financially
Vulnerable
2007
-
-
-
-
-
2008
-
-
-
-
-
2009
34
9
28
26
38
2010
39
12
23
31
34
2012
38
12
27
26
35
Index Score
In its third appearance Turkey finishes mid-table on the
Index, out-scoring countries such as France and Germany.
Still, with an Index score of 38 in 2012, the balance remains
tipped away from financial security among Turkish
consumers, with about a third of households classed as
financially vulnerable.
•
12 per cent of all households in Turkey are classed
as financially secure, with four per cent of Turkish
households saying that they never experience
financial difficulties, and expect their financial
situation to improve.
More than one in three
Turkish households (35%)
experience financial
difficulties at least
sometimes and do not
expect their situation to
improve in the coming
months.
•
The strivers – who make up an additional quarter of
all households in Turkey (26 per cent) – are dominated
by those households who ‘sometimes’ experience
financial difficulties but nonetheless expect their
situation to improve in the future.
•
Three-quarters of Turkish households overall
experience financial difficulties ‘often’ or ‘sometimes’.
48
Turkey: Top Consumer Financial Issues
Cost of Living; Consumer Borrowing; Income From
Work
•
•
•
Cost of living, level of consumer borrowing and level
of income from work are the three factors that most
concern Turkish households when assessing their
financial situation over the next 12 months.
Almost a quarter (23 per cent) of Turkish households
in the survey gave level of consumer borrowing as a
concern when looking ahead. This differs from other
countries, where the level of consumer borrowing
is rarely among the top three issues. This could
be a hangover from a period of economic growth,
suggesting some Turks may have become overstretched and are struggling in a time of high inflation.
Men responding to the survey are more likely than
women to be concerned about level of consumer
borrowing (28 per cent compared to 18 per cent).
Women are more likely than men to see payment
protection insurance as a main concern (7 per cent
compared with one per cent).
•
Education appears to drive the areas of concern that
households in Turkey have. Twice as many households
where the respondent has only the lowest level of
education consider the cost of living as an important
factor when looking ahead (39 per cent) as those with
further education (19 per cent).
•
Conversely many more people with a higher
education level give private pension provision (21 per
cent) and the national or global economy (nine per
cent) as a concern when looking ahead, than those
with the lowest levels of education (seven per cent
and one per cent respectively).
•
There are also interesting differences by income and
region. More than double the number of high-income
households report job security as a major concern
(nine per cent), than those on lower incomes (four per
cent).
•
One in five (21 per cent) of households in the
Istanbul region give rent or mortgage payments as
a concern when looking ahead. Just three per cent
of households in the Aegean region see this as an
important factor for their household.
Percentage (%)
Chart 30: Top three consumer financial issues, Turkey
100
80
60
40
33
23
16
13
12
20
0
8
7
6
4
4
4
4
3
I
49
Greece hits rock bottom
Economic Snapshot
According to a report in December 2012 by two of the
country’s leading trade unions, wages have fallen from 84
per cent of the EU average to 74 per cent over the last two
years.
The riots on the streets of Athens tell the story. Cuts to
employment, wages and public spending as part of the
austerity programme have undermined living standards.
During the same period, the purchasing power associated
with the average wage in Greece has halved thanks to
relatively high inflation in 2010 and 2011.
Unemployment is running at a record high of 26 per cent,
according to data for September 2012, and is expected
to stay at or above that level in 2013 and 2014. The
unemployment rate for Greeks aged 15 to 24 was 56 per
cent.
Falls in house prices appear to be accelerating. House
prices in urban areas outside Athens fell 2.9% in 2009,
6.7% in 2010, 7.5% in 2011, and 11.5% in the second
quarter of 2012.
The economy will contract by another 4 per cent in 2013
following a fall of 6 per cent in 2012, according to the
IMF. This will mean Greeks have endured recession for six
years.
The €110 billion bailout for Greece in 2010 was tied to cuts
in the public spending including civil servants’ salaries,
freezing pensions, raising the retirement age and hikes in
taxes and fuel duty.
Chart 31: 2012 Genworth index results (Greece)
100
90
70
60
50
40
71
67
52
47
39
38
36
30
20
10
32
29
17
13
11
6
1
0
G
re
ec
e
Percentage (%)
80
50
Table 14:
Index Score,
Greece
Index
Score
Financially
Secure
Circumspect
Strivers
Financially
Vulnerable
2007
-
-
-
-
-
2008
-
-
-
-
-
2009
24
4
36
15
45
2010
12
2
28
5
65
2012
1
1
14
5
80
Index Score
Given the continued economic turmoil in Greece, it is no
surprise that it once again has the lowest levels of financial
security on the Index. Even so, the decline in the country,
highlighted by its Index score of just one in 2012, is quite
alarming.
•
In 2009, four per cent of Greek households were
classed as financially secure. This halved to two per
cent in 2010, and has halved again to just one per cent
of households in 2012.
Four out of every five
households in Greece are
now classed as financially
vulnerable, the highest on
the Index.
•
Only 14 per cent of households in Greece are classed
as circumspect. This has halved since the 2010 Index.
•
In fact, the number of households in each of the
groups has declined, apart from those classed as
financially vulnerable. The number in this group
has almost doubled from 45 per cent in 2009 to 80
percent in late 2012.
Greece: Top Consumer Financial Issues
Cost of Living; Income From Work; Social Security
•
•
The cost of living, level of income from work and
levels of social security payments are the three most
important factors people in Greece consider when
Greece is the only country on the Index to identify
social security payments as among the top three
factors when assessing their household’s financial
situation. This reflects the reliance on the retreating
welfare state, as a result of the country’s high and
sustained levels of unemployment.
•
Out of 688 households interviewed in Greece, only six
were classed as financially secure.
•
Notably, payment protection insurance is among
the top three concerns for 15 per cent of Greek
•
Age is also a factor in relation to concerns about
levels of savings. Almost a quarter (24 per cent) of
households aged under-25 say this is one of their main
concerns, compared with 12 per cent of all Greek
households.
•
In addition, a similar proportion of households where
the respondent has university education (22 per cent)
is concerned about levels of savings, compared with
only seven per cent of Greek households with a lower
education level.
•
Conversely, those with a university education are less
concerned about the level of social security payments
than households with a lower level of education (17
per cent compared with 36 per cent).
households, although this varies considerably
with age. So while nearly a quarter (24 per cent) of
households aged 35-44 rank it as important, this is the
case for only two per cent of the under-25s.
Chart 32: Top three consumer financial issues, Greece
Percentage (%)
100
72
80
56
60
40
20
22
19
16
15
0
I 51
13
12
9
8
5
4
6
The vast area of Latin America, from
Mexico in the North to Brazil in the South, was
one of the best performers since the onset of
the global financial crisis. However, households
must now cope with slowing growth.
I 53
Latin America Overview
The vast area of Latin America, from Mexico in the North
to Brazil in the South, was one of the best performers
since the onset of the global financial crisis. However,
households must now cope with slowing growth.
Unlike in regions such as Western Europe, where wealth
and debts are more uniformly divided, Latin America is
increasingly split between an emerging middle class and
those living in poverty.
For the former, household debt levels have been rising in
recent years. This has been driven in part by the growth in
consumer lending that has coincided with rising incomes
of many low-income households in countries such as
Brazil, Chile, Colombia, Mexico and Peru.
Growth in consumer debt is often associated with
countries that are enjoying a transition to a new level of
development. For example, Brazil saw household debtto-income levels double in the five years to 2011. However
evidence from the statistics is growing that households
are struggling to cope with debt service payments as their
economies have slowed.
Meanwhile large minorities of households do not have
access to financial services. According to the World Bank,
60 per cent of Latin American adults are still unbanked
which means they cannot access credit cards, cheques,
loans or other forms of banking tools that make life easy.
Chart 33: Top consumer financial issues in Latin America
100
90
80
70
The cost of living
60
Job security
50
Level of savings
40
Level of income from work
30
Level of income from savings
20
10
0
Brazil
Chile
Colombia
Mexico
Peru
54
Positive outlook for Brazil
Economic Snapshot
Up until quite recently, Brazil was a textbook example
of an economy enjoying a major transformation. The
first decade of this century saw the country achieve
macroeconomic stability, strong growth and rises in living
standards.
However, 2011 saw global economic shocks hit the
confidence of consumers and businesses, contributing to
the sharp deceleration of economic activity in the second
half of the year.
This slowdown in growth has brought a slowdown in
inflation in its wake, which will boost consumers’ spending
power. After peaking at 7.3 per cent in September
2011, headline inflation has dropped to 5.5 per cent in
November 2012.
Lower taxes and cuts in domestic energy prices will leave
households with more disposable income. It is worth
remembering that inflation averaged 53 per cent a year
during 1993-2003.
One concern is the rise in bad consumer loans. Consumer
credit, especially car loans, picked up strongly in 2010
following the post-Lehman slump.
House prices have more than doubled over the last five
years and a survey of 54 countries by the IMF found that
Brazil saw the highest house price rises in the year to June
2012 at 15 per cent.
However unsettling this cyclical downturn is, it should not
distract from the boost to the living standards of many
Brazilians over the previous decade. Poverty has fallen
markedly, from 21% of the population in 2003 to 11% in
2009.
Chart 34: 2012 Genworth index results in Latin America (Brazil)
100
90
80
70
63
63
60
51
Financially secure
50
50
43
Index Score
40
30
27
18
20
10
0
8
Chile
16
14
9
6
Brazil
Brazil
Peru
18
15 15
Colombia
Mexico
I
55
Table 15:
Index Score,
Brazil
Index
Score
Financially
Secure
Circumspect
Strivers
Financially
Vulnerable
2007
-
-
-
-
-
2008
-
-
-
-
-
2009
-
-
-
-
-
2010
-
-
-
-
-
2012
63
18
14
63
6
Index Score
•
The most striking finding in Brazil is the size of the
strivers group, accounting for 63 per cent of Brazilian
households. Strivers are those who have experienced
financial difficulties at least sometimes but expect
their situations to improve in the coming months. It
would seem the majority of Brazilians have a positive
financial outlook.
•
Even the ten per cent of Brazilian households that
experience financial difficulties regularly still expect
their financial situation to improve in the future.
Brazil joins the Genworth Index for the first time in 2012
with a score of 63. This places Brazil strongly on the Index
for financial security, with the same score as another LatinAmerican country – Chile. Brazil’s elevated position can be
explained by the optimism of those who, despite recently
experiencing financial difficulties, expect their financial
situation to improve over the next 12 months.
•
Almost a fifth (18 per cent) of Brazilian households are
classed as financially secure on the Index, while just
six per cent are financially vulnerable.
Only 1% of Brazilian
households frequently
have financial difficulties,
while also thinking that
their financial situation will
get worse over the next
twelve months.
56
Brazil: Top Consumer Financial Issues
Cost of Living; Job Security; Savings Levels
•
Cost of living, job security and level of savings are
the factors that Brazilian households feel are most
important when assessing their household’s future
•
There are notable differences in the main concerns
that householders have depending on income and
education levels. These socio-economic differences
are more marked than most other countries on the
Index. Higher-income households are particularly
concerned with the cost of living (82 per cent,
compared with 60 per cent of those with lower
incomes); job security (60 per cent compared to 42
per cent); and level of income from work (50 per cent
compared to 32 per cent of those with lower incomes).
•
•
Meanwhile, those with lower levels of education are
more concerned with level of savings (50 per cent
compared to 39 per cent with higher education) and
private pension provision (14 per cent compared
to three per cent). Nonetheless, the cost of living
in Brazil remains the most commonly expressed
concern regardless of education level (75 per cent
of households with lower education and 58 per cent
among those with higher education).
•
In common with other Latin American countries on
the Index, level of savings features more strongly as
a driver for Brazilians’ assessment of their financial
situation than most European countries.
•
Women responding to the survey were notable for
being more likely than men to see cost of living and
level of savings as key factors when thinking about
their household’s future financial wellbeing. Twothirds of women cited cost of living (66 per cent) and
a half cited level of savings (48 per cent), compared
Level of consumer borrowing is also a more common
concern for those with higher incomes (20 per cent)
than those with lower incomes (nine per cent).
•
•
Those on lower incomes, in contrast, are more
concerned with their household’s level of savings
(50 per cent, compared to 27 per cent of those with
higher incomes) and the level of income from their
savings (23 per cent compared to 12 per cent). Private
pension provision and level of state benefits were also
more likely to be concerns among poorer households
(nine per cent and six per cent) than the better-off
households (three per cent and one per cent).
Similarly, householders with higher levels of education
(completion of secondary education and above)
are likely to give job security (56 per cent) and
level of income from work (43 per cent) as the main
concerns when looking ahead. This compares with
corresponding figures of 31 per cent and 32 per cent
among those with lower levels of education.
with 57 per cent and 37 per cent respectively for
men.
•
While we might expect older age groups to be more
concerned about their private pension provision, the
magnitude of the difference by age is surprising. Just
one per cent of households with a respondent aged
35 to 44 see this as one of their main concerns when
looking ahead, rising to six per cent among those
aged 45 to 54, and jumping to 22 per cent for those
aged 55 to 64.
•
There are very few regional differences in what
households consider important in Brazil, the notable
exception being that households in Belo Horizonte
(in the south eastern region) are more likely than
households elsewhere to be concerned with income
protection insurance (25 per cent compared with the
average of eight per cent).
Chart 35: Top three consumer financial issues, Brazil
100
80
60
40
20
62
50
43
40
20
17
0
11
8
6
6
4
3
2
I
57
Chilean optimism ensures high-flying first
appearance on the Index
Economic Snapshot
Chileans are currently enjoying a perfect combination
of strong growth and low and stable inflation that have
underpinned rises in living standards. GDP growth will rise
by 4.25-5.25 per cent next year (2013) while inflation will
remain close to the 3 per cent target.
Debt is on the rise but only in line with the rise in incomes.
Since 2008 household debt has remained stable at around
60 per cent of disposable income. In March 2012, total
household debt grew 7.3 per cent in annual terms, which is
higher than the rate of the past few years.
The growth in debt has been driven in recent months by
mortgage debt rather than consumer lending, which has
slowed over the course of 2011.
However, the number of non-performing consumer loans
has been rising since the middle of 2011 and the trend
continued in the first months of this year.
The unemployment rate has stayed below 7 per cent
throughout 2012, while the latest official annual survey
showed an 8.4 per cent increase in average salary
between 2010 and 2011.
Similarly the payments households must make to meet
their consumer and mortgage interest payments have
remained stable at around 10 per cent of income.
Chart 36: 2012 Genworth index results in Latin America (Chile)
100
90
80
70
63
63
60
51
Financially secure
50
50
43
Index Score
40
30
27
18
20
10
0
8
Chile
Chile
16
14
9
6
Brazil
Peru
18
15 15
Colombia
Mexico
58
Table 16:
Index Score,
Chile
Index
Score
Financially
Secure
Circumspect
Strivers
Financially
Vulnerable
2007
-
-
-
-
-
2008
-
-
-
-
-
2009
-
-
-
-
-
2010
-
-
-
-
-
2012
63
27
33
32
8
Index Score
•
Debuting alongside Brazil with a score of 63 points on
the Index, Chile shares many of the traits of its fellow
Latin American country. A fifth (20 per cent) of Chilean
households hardly ever experience financial difficulties
and think their financial situation will get better, while
a further seven per cent never experience financial
difficulties, as well as expecting their financial situation to
improve.
•
Over a quarter (27 per cent) of Chilean households
are classed as financially secure. This makes Chile
the country with the highest proportion of financially
secure households of all the Latin American
countries included in the Index, comparing to 18
per cent in Brazil, 16 per cent in Peru, 15 per cent in
Colombia and only nine per cent in Mexico.
Almost six in ten Chilean
households (59 %) expect
situation to improve, while
only five per cent think it
will get worse.
The smallest Index group in 2012 is the financially
vulnerable group. Overall, these comprise eight
per cent of households in Chile. Breaking this group
down into its constituent parts, only two per cent of
Chilean households report that they often experience
financial difficulties and expect their financial situation
to worsen.
•
A further one in three households here are
circumspect (33 per cent). These are households that
only rarely experience financial difficulties (if at all) but
also don’t expect their situations to improve.
•
However, the majority of Chilean households
overall are optimistic about their household’s future
financial position (59 per cent). These include a large
number – representing nearly a quarter (23 per cent)
of all household in Chile who say that although they
sometimes experience financial difficulties, they do
expect their situation to improve over the next 12
months.
Chile: Top Consumer Financial Issues
Savings Levels; Consumer Borrowing; Income From
Savings
•
•
•
•
Level of savings, levels of consumer borrowing and
levels of income from savings are the factors that
Chilean households feel are most important when
Chile is unusual in not identifying any of the
‘employment’ related reasons (job security or level of
income from work) as a concern for their households’
future financial situation. This perhaps reflects a
confident view of employment prospects. Income
from savings makes it into the Chilean ‘Top Three’,
possibly as a result of a reliance on savings to fund
retirement/long-term care.
Reflecting strong recent economic growth in Chile,
and increased access to credit, more than half of all
Chilean households say that consumer borrowing is
an important factor when thinking of the future.
Chileans with higher education are much more likely
than those with only basic levels of education to be
concerned about levels of consumer borrowing (60
per cent compared to 42 per cent) and about levels of
savings (60 per cent compared to 40 per cent).
Respondents with a lower level of education are
more concerned about the cost of living (18 per cent
compared to 11 per cent of those with a higher level
of education).
•
There are some interesting gender differences within
Chile. Households represented by a man are more
concerned about level of income from savings (56
per cent compared to 42 per cent of women); private
pension provision (24 per cent compared to 14 per
cent); and level of income from work (20 per cent
compared to 12 per cent).
•
Women, in comparison, are significantly more
concerned about rent or mortgage payments (39
per cent compared to 28 per cent of men); the cost
of long-term care (20 per cent compared to ten per
cent); and income protection insurance (seven per
cent compared to two per cent).
•
Meanwhile, nine per cent of Chilean households on
lower incomes are concerned about job security.
Although not one of the most common factors people
considered when looking ahead, this was mentioned
much more often by poorer households than
wealthier ones (four per cent).
100
60
40
20
51
51
49
33
19
16
0
59
•
Chart 37: Top three consumer financial issues, Chile
80
I
16
15
15
10
10
7
5
60
Colombian households positive for the future
Economic Snapshot
Consumer credit has grown rapidly as households have
responded to a decade of robust economic growth since
the crisis of the late 1990s.
Annual credit growth has averaged around 14 per cent
since 2005. This has led to a build-up of consumer debt
with households needing 15 per cent of their disposable
income to meet interest payments, which the Central Bank
said in 2011 was close to the pre-crisis levels.
However, the level of indebtedness for households – the
ratio of housing and consumer loans to GDP– is on a falling
trend and was 12.8 per cent as of mid-2011. Household
debt service as a percentage of salary stood at 14.1 per
cent as of June 2012.
The growth in credit comes in a country where average
levels of income per person are low relative to its Latin
American peers and where banking penetration is also
relatively low.
This has raised concerns that a rapid credit expansion may
lead to a future crisis due to the more limited collateral that
consumer loans demand in comparison to mortgages.
There is less concern in housing as mortgage debts only
make up around 12 per cent of total indebtedness. Loan to
value ratios are regulated in Colombia, and banks cannot
lend more than 70 per cent of the price of a home.
Standard & Poor’s, the credit agency that is forecasting
house price inflation of 6-8 per cent over the next two
years, believes the risk of a house price bubble is low.
Chart 38: 2012 Genworth index results in Latin America (Colombia)
100
90
80
70
63
63
60
51
Financially secure
50
50
43
Index Score
40
30
27
18
20
10
0
8
Chile
16
14
9
6
Brazil
Peru
18
15 15
Columbia
Colombia
Mexico
I 61
Table 17:
Index Score,
Colombia
Index
Score
Financially
Secure
Circumspect
Strivers
Financially
Vulnerable
2007
-
-
-
-
-
2008
-
-
-
-
-
2009
-
-
-
-
-
2010
-
-
-
-
-
2012
50
15
23
47
15
Index Score
Colombia out-scores many European countries on the
Index of financial security, including Finland, Great Britain,
France and Germany. Even so, of the four Latin American
new entrants this year, Colombia has the lowest Index
score, of 50. Reflecting an optimism found elsewhere
in Latin America, the largest single group on the Index
were the strivers, who believe their financial situation will
improve over the next year despite experiencing some
financial difficulties.
•
Strivers, who are confident about their financial
futures, account for nearly a half (47 per cent) of all
households in Colombia in 2012.
62% of Colombian
households think that
their financial situation
will improve over the next
twelve months.
•
The financially secure group comprises 15 per cent of
Colombian households. Five per cent of households
overall say that they never experience financial
difficulties, and think that their situation will improve in
the future.
•
At the other end of the extreme, a further 15 per cent
of Colombian households are classed as financially
vulnerable, which is relatively high compared with the
other Latin American countries in the Index (second
only to Mexico, with 18 per cent).
62
Colombia: Top Consumer Financial Issues
Savings Levels; Income From Work ; Cost of Living
•
Level of savings, level of income from work and
the cost of living are the three factors Colombian
households feel are most important when assessing
•
Like Chile, and all other Latin American countries
on the Index (with the exception of Mexico), level of
savings features strongly in Colombia.
•
The financially secure group see level of savings
(60 per cent) and level of income from savings (29
per cent) as much more important than households
classed as financially vulnerable (25 per cent and 12
per cent respectively).
•
When thinking about the future, only 20 per cent
of financially secure households in Colombia are
concerned about the cost of living. This more than
doubles to 42 per cent among those households
classed as financially vulnerable.
•
There is little variation by socio-demographic
characteristics in the factors Colombian households
considered important when looking ahead. However,
the extent to which households in Colombia see level
of savings as important does vary by households’
income levels. More than a half (55 per cent) of higherincome households in the country see level of savings
as a concern when assessing their future financial
situation, compared to just 36 per cent in the lowerincome group.
•
Reflecting the period of economic growth in the
country and the growing reliance on consumer credit,
15 per cent of Colombian households see their level
of consumer borrowing as an important factor when
looking ahead.
Chart 39: Top three consumer financial issues, Colombia
100
80
60
40
20
46
43
29
21
18
17
0
15
11
11
10
9
6
3
I
63
Job security troubles the Mexicans
Economic Snapshot
Mexican households are in a robust position. Their
financial wealth net of debts amounted to a total of 25.5
per cent in 2011, above the pre-global crisis levels.
In the second quarter of 2011, the latest period with
available data, the burden of meeting total household
debt service payments accounted for just 2.2 per cent of
disposable household income.
This was despite a marked rise of 7.2 per cent in household
credit over the previous 12 months, led by consumer credit
of 8.8 per cent and mortgage loan growth of 6.7 per cent.
The Mexican economy rebounded strongly after the 2009
recession and GDP growth is forecast to average around
3.6 per cent over the three years to 2013. Inflation was 4.4
per cent in the year to November 2012, while house prices
rose by 3.7 per cent in the year to September 2012.
It is worth remembering that more than half of Mexican
households do not save money in financial institutions.
In rural areas, only 6 out of 100 have access to financial
services. The number of Mexicans living in poverty to 2010
is estimated to be 52 million people – or four out of 10
Mexicans.
Household financial savings grew by 4.3 per cent after
inflation. While workers have to save into a pension
scheme, voluntary household savings also rose, by 4.7 per
cent.
Chart 40: 2012 Genworth index results in Latin America (Mexico)
100
90
80
70
63
63
60
51
Financially secure
50
50
43
Index Score
40
30
27
18
20
10
0
8
Chile
16
14
9
6
Brazil
Peru
18
15 15
Colombia
Mexico
Mexico
64
Table 18:
Index Score,
Mexico
Index
Score
Financially
Secure
Circumspect
Strivers
Financially
Vulnerable
2007
-
-
-
-
-
2008
-
-
-
-
-
2009
-
-
-
-
-
2010
39
10
34
28
28
2012
43
9
30
44
18
Index Score
•
Less than one in ten Mexican households is classed
as financially secure, in other words those who hardly
ever experience financial difficulties and expect their
financial situation to improve.
•
The largest group is the strivers (44 per cent). They
comprise households who, though they experience
financial difficulties at least sometimes, expect their
financial situation to improve over the next 12 months.
•
Around one in ten Mexicans (11 per cent) think that
their financial situation will get worse over the next 12
months.
Now in its second year on the Index, Mexico’s score is
higher than many European countries, and is higher than
it was in 2010. Mexico reports lower levels of financial
security than the other Latin American countries. But
similarly to other Latin American countries, Mexico’s
performance can be attributed to the optimism felt by its
people about their future financial situations.
Four out of every five
Mexican households
(81%) report that they
experience financial
difficulties ‘often’ or
‘sometimes’, though
53 per cent have a
positive outlook for
the future
Mexico: Top Consumer Financial Issues
Job Security; Cost of Living; Income From Work
•
Job security, cost of living and level of income from
work are the three most important factors people in
Mexico consider when assessing their household’s
future financial situation.
•
Mexico is the only Latin American country on the
Index not to include savings levels in the ‘top three’
factors.
•
Compared with many other countries in the Index,
income protection insurance features highly in
Mexico. Almost three in ten (28 per cent) Mexican
households give income protection insurance as
an important factor in assessing the future financial
situation of their household.
•
Higher-income households in Mexico are more likely
to see housing payments as an important factor when
looking ahead than lower-income households (22 per
cent compared with nine per cent respectively).
•
More than a third of Mexican households (34 per cent)
in the 25-34 age group give their level of income from
savings as an important factor. This is much less of a
concern among other households, notably those in
the older 35-44 age group (14 per cent).
•
While a third (32 per cent) of households represented
by men in the survey think that the national or global
economy is an important factor when looking ahead,
this is true of only 20 per cent of women.
Chart 41: Top three consumer financial issues, Mexico
100
80
60
40
35
29
29
28
26
26
20
0
I 65
21
21
19
15
15
10
9
66
Peruvian optimism tempered by concerns for the
economy
Economic Snapshot
Peruvians are seeing a boom in house prices, which is
bringing wealth for homeowners but making it harder for
new buyers to get on the market.
However, the debt burden has risen to six times national
income. To address the danger of over-indebtedness in
the consumer credit sector, the Superintendent of Banks
and Insurance has tightened regulations on lenders.
Prices of apartments in popular metropolitan zones
of Lima, the capital city that makes up a third of the
population, saw an average rise of 21.4 per cent in the year
to June 2012, with some districts seeing jumps of 40 per
cent.
However, Peruvians have high levels of saving. Gross
saving – the share of national income after taking out
consumption – is almost a quarter of national income,
more than double the 11 per cent in the US. Wages and
salaries are rising at an annual rate of 8 per cent.
The recovery has been supported by rapid economic
growth since the end of the downturn, attractive financing
conditions, higher consumer confidence and increased
employment.
Consumers have benefited from a slowdown in inflation
from 4.7 per cent at the start of 2012 to 2.7 per cent, thanks
to the easing of food and fuel prices.
Other indicators of private spending, such as the sale of
new family cars and consumer loans, have risen at rates of
47.4 per cent and nearly 20 per cent, respectively, over the
same period.
Chart 42: 2012 Genworth index results in Latin America (Peru)
100
90
80
70
63
63
60
51
Financially secure
50
50
43
Index Score
40
30
27
18
20
10
0
8
Chile
16
14
9
6
Brazil
Peru
Peru
18
15 15
Colombia
Mexico
I
67
Table 19:
Index Score,
Peru
Index
Score
Financially
Secure
Circumspect
Strivers
Financially
Vulnerable
2007
-
-
-
-
-
2008
-
-
-
-
-
2009
-
-
-
-
-
2010
-
-
-
-
-
2012
51
16
20
50
14
Index Score
•
Peru joins the Index in 2012 with a score of 51 points.
Despite having a lower Index score than its neighbours
Brazil and Chile, Peru still fares better than many of the
European countries. With optimism abundant among
Peruvian households, as many as a half of them are
classed as strivers, believing that their financial situation
will improve in the coming months, despite experiencing
financial difficulties at the moment.
•
16 per cent of households in Peru are financially
secure, in line with Colombia (15 per cent) and
higher than Mexico (9 per cent). Of these, 11 per cent
hardly ever experience financial difficulties and think
their situation will improve, while a fortunate five per
cent never experience financial difficulties and think
their situation will improve.
Two-thirds (66%) of
Peruvian households
expect the future
financial position of
their household to
improve.
In line with other Latin American countries,
the strivers (those who have experienced
financial difficulties but think their situation will
improve in the coming months) are the largest group
in Peru, accounting for half of households, reflecting
optimism for the future by households surveyed in
Peru and across the region.
•
One in five (20 per cent) households in Peru overall
are classed as circumspect (rarely experiencing
financial difficulties but do not think their situation
will improve in the future), while a furthe14 per cent of
households are financially vulnerable.
68
Peru: Top Consumer Financial Issues
Income From Work; Savings Levels; Wider
Economy
•
households are clearly still wary about the state of
the economy, due at least in part to the national debt
burden. Peru was the only Latin American country to
highlight the wider economy as an important factor
for explaining their financial situation.
Level of income from work, level of savings, and
the national or global economy are the factors that
Peruvian households feel are most important when
•
With growing wages and high levels of saving, it is
little wonder that Peruvians are concerned at the
level of income from their savings. Over a quarter of
them (26 per cent) see this as a major concern when
assessing their household’s financial situation over
the next 12 months.
•
Over a quarter of Peruvians (26 per cent) are
concerned with the state of the national or global
economy when looking ahead. Although the country
is going through a period of growth, Peruvian
•
Aside from these issues, the extent to which other
factors are seen as important to households varies
depending on whether the respondent is a man or a
woman. A quarter (25 per cent) of women responding
see cost of living as an important factor when looking
ahead, compared to just 15 per cent of men. Women
are also more likely to be concerned about the cost of
long-term care (11 per cent compared to four per cent
of men).
•
Conversely, men responding to the survey were
almost three times as likely as women to give private
pension provision as an important factor (13 per cent
compared to five per cent).
Chart 43: Top three consumer financial issues, Peru
100
90
80
70
60
50
40
30
20
10
0
61
48
26
26
20
17
14
13
9
7
5
4
2
China has enjoyed a powerful industrial
revolution that has lifted around 250
million rural residents out of poverty.
I 70
China Overview
China has enjoyed a powerful industrial revolution that has
lifted around 250 million rural residents out of poverty.
imports. This internal rebalancing will mean consumers
reducing household saving, and increasing disposable
income spending and imports. This internal rebalancing
will mean consumers reducing household saving, and
increasing disposable income.
China has only reached 18% of America’s GDP per capita
in purchasing power adjusted terms. On the other hand,
average American household debt is 136 per cent of
household income, compared with 17 per cent in China.
Such a transformation would substantially boost living
standards and make growth more balanced.
Chinese households do not appear to have a debt
problem, while household consumption accounts for
slightly more than a third of total output.
Finding ways for households to invest their savings in
assets other than housing will also help slow down the
housing market.
Chinese families tend to save money as a precaution,
which has kept household savings at the relatively high
level of 20-25 per cent of disposable income for the last
two decades.
China is aiming to rebalance its economy away from
exports and investment towards consumer spending and
Chart 44: Top consumer financial issues in China
Level of income from work
100
The cost of living
Percentage (%)
90
Level of welfare benefits
80
Job security
70
Level of consumer borrowing
60
50
40
30
20
Level of savings
44
Level of income from savings
Income protection insurance
29
Private pension provision
25 25
20 19 18
18
The national or global economy
17
8
10
0
China
6
6
Rent/ mortgage payments
4
Payment protection insurance
The cost of long term care
71
Confident China tops the Index
Economic Snapshot
One of the most significant shifts in household finances
over the last two years has been the estimated 15 per cent
rise in wages mainly as a result of increases in the minimum
wage and efforts to improve workers’ rights.
The income of urban and rural residents rose rapidly, and
consumer demand grew steadily. In the first three quarters
of 2012, urban households’ per capita disposable income
grew at an annual rate of 13 per cent. Retail sales were up
14 per cent.
Other surveys gave Guangzhou the highest score among
30 municipalities for standards of living and the highest
annual wage among 22 cities. Salaries in Wuhan, Shanghai
and Beijing also exceeded the national average.
One concern is the housing market, where there has been
talk of a bubble. Certainly in Beijing and Shanghai prices
are as much as 24 times average incomes.
On average, incomes have been rising faster than prices
for most of the last decade, so property has in fact been
getting more affordable at the national level.
At the end of September 2012, unemployment rates in
urban areas have stabilised at 4.1 per cent, a low rate
globally.
A survey by China’s Southwestern University of Finance
and Economics found families in China had an average of
RMB1.21 million (£121,000) in net assets and household
debt of RMB62,600 (£6,260).
Chart 45: 2012 Genworth index results in China
100
90
Percentage (%)
80
70
Financially Secure
60
40
46
44
50
43
39
34
44
Strivers
Financially Vulnerable
32
30
17
20
Beijing
18
14
4
10
0
Circumspect
44
12
Guangzhou
7
2
1
Shanghai
Wuhan
I 72
Beijing
Table 20:
Index Score,
China
Financially
Secure
Circumspect
Strivers
Financially
Vulnerable
34
44
17
4
Guangzhou
39
46
14
1
Shanghai
43
44
12
2
Wuhan
32
44
18
7
China (Overall)
39
44
14
3
Index Score
China tops this year’s Index with a five-year high score
of 78. The Chinese data focuses on four cities (Beijing,
Guangzhou, Shanghai and Wuhan), and while not
representative of China as a whole, when taken at facevalue, they suggest extremely high levels of financial
security among urban Chinese households.
•
•
With almost four-out-of-ten Chinese households
classed as financially secure, China has reported the
highest levels of financial security ever recorded in
any country over the five years of the Index.
Only one per cent of Chinese households report that
they often have financial difficulties and believe their
situation will worsen over the next 12 months.
•
Almost half of Chinese households (44 per cent) fall
into the circumspect group. This is the group who
do not often, if at all, experience difficulties, and who
expect their situation to remain the same.
•
When broken down by region, 43 per cent of
households in Shanghai are classed as financially
secure, compared to less than a third (32 per cent) in
Wuhan.
•
Just one per cent of households in Guangzhou are
classed as financially vulnerable, compared to seven
per cent in Wuhan.
China’s performance
on the Index is striking.
China is four points
ahead of the previous
highest score of 74,
recorded in Norway in
2009.
73
China: Top Consumer Financial Issues
Income from Work; Cost of Living; Level of welfare
benefits
•
•
•
•
Level of income from work, the cost of living and
level of welfare benefits are the three most important
factors to people in China.
Almost a half of higher-income households in China
(46 per cent) see cost of living as an important
factor when assessing their future financial situation,
compared to just 20 per cent of the lower-income
households.
•
Looking ahead, the national or global economy is a
particularly important factor for financially secure
households in China. Compared with eight per cent
of all households, it was mentioned by 13 per cent of
those classed as financially secure.
Higher-income households in China also report
income protection insurance (46 per cent) and private
pension provision (33 per cent) among their main
concerns, compared with overall averages of 18 per
cent and 17 per cent respectively.
•
There were some interesting differences depending
on where people lived. Compared with households
in Beijing (15 per cent), those in Shanghai (27 per
cent), Guangzhou (33 per cent) and Wuhan (33 per
cent) were more concerned about levels of social
security.
For younger households in China (where the
respondent is under 24), levels of consumer
borrowing come through as a major concern (33 per
cent). This compares with 17 per cent of the 35-49 age
group, and just six per cent of households in the 50-64
age group.
•
Compared with women, men responding to the
survey were more likely to be concerned about their
households’ level of savings (24 per cent of men,
compared with 14 per cent of women).
•
There is a similar pattern in relation to the national
or global economy, with fewer households in Beijing
(three per cent) concerned about this than elsewhere.
•
Households in Shanghai are particularly concerned
about job security (31 per cent) and cost of living (34
per cent) when looking ahead, compared with other
households in China.
Percentage (%)
Chart 46: Top three consumer financial issues, China
100
90
80
70
60
50
40
30
20
10
0
44
29
25
25
20
19
18
18
17
8
6
6
4
A - 1
The Genworth Index background
Financial security is important to households. It provides a foundation on which they can make financial
and potentially life-changing decisions. Financial vulnerability meanwhile signifies how difficult
households are finding simply meeting their existing financial commitments, with commensurate
difficulties in planning for the future.
The Genworth Index has been developed to provide a
clear and robust picture of households’ general financial
situations in the countries in which those households live.
This year, the Index encompasses 20 countries. Of these, a
core set of ten European countries have been included in
every edition of the Index since it began in 2007.
The survey on which the Index results are based reaches
out to a nationally representative sample of around 1,000
households in each country that is included. The Index
questions are asked only of householders – an adult in
whose name the accommodation is owned or rented, or
his or her partner – aged 18 or over in order to provide
meaningful data from those with financial responsibilities.
The resulting sample size totalled ove13,000 households
across 20 countries for this 2012 edition. All data were
collected during October/November 2012.
The Index is the result of a 2007 developmental project
commissioned amid growing concern about rates of
consumer borrowing and over-indebtedness. The purpose
of the project was to devise an internationally-relevant,
standardised and timely measure of consumer financial
security. This involved an initial survey of ten countries
in Europe using questions designed to measure overindebtedness and rigorous exploratory analysis of these
data.
Creating the Genworth Index
The Index score itself provides a snapshot of the overall
level of relative financial security in a given country
or group of countries. For each edition, the Index is
calculated in a standardised way. Exploratory data
analysis for the baseline edition identified two underlying
dimensions to consumer financial security as conceived by
the project team. The Index is derived from responses to
the following two key questions:
•
Thinking about the general financial position of your
household, how often do you experience financial
difficulties?
•
Looking ahead over the next 12 months, do you think
the financial position of your household will improve,
stay the same or get worse?
The response options to these two questions produces 12
possible combinations of answers. These 12 combinations
have been collapsed into four distinct groups as shown
below:
For the first time, the Index report also aims this year
to explain what drives consumers’ feelings of financial
security and vulnerability, by asking households to select
the top three reasons from the list below.
•
‘Financially Secure’ (A), rarely experienced financial
difficulties; expect their financial situation to improve.
Which are most important to you when thinking about
your household’s financial situation?
•
‘Circumspect’ (B), have not often experienced
difficulties, if at all, and who tend to expect their
situation to remain the same. These are neither
financially vulnerable nor secure.
•
Your level of savings
•
Your level of consumer borrowing (for example on any
loans, credit cards or overdrafts)
•
Your level of income from work
•
Your level of income from savings
•
Your private pension provision
•
Your level of social security payments or state pension
•
Job security
•
Rent or mortgage payments
•
Payment protection insurance for a mortgage or loan
•
Income protection insurance in case of illness,
accident or unemployment
•
The cost of living (for example on food or utility bills)
•
The cost of long term care
•
The national or global economy
•
•
‘Strivers’ (C), households who tend to have
experienced financial difficulties relatively frequently
but who are now expecting their situation to improve.
Again, these are neither financially vulnerable nor
financially secure.
‘Financially Vulnerable’ (D), comprises households
that have been experiencing financial difficulties
often or all the time and who feel that their situation is
unlikely to improve. Expectations of the future financial
position of the household
Stay the
same Get worse
Get better
Frequency of
experiencing
financial
difficulties
Often or always
C
D
D
Sometimes
C
B
D
Hardly ever
A
B
B
Never
A
B
B
The Genworth Index takes the ratio of the percentage of people who are financially secure
relative to the percentage of those who are financially vulnerable. The resulting value is
rescaled so that a score of 100 indicates maximum possible relative financial security and a
score of 0 indicates minimal relative financial security.
A - 3
About Genworth Financial
Genworth is a leading financial security company
meeting the retirement, lifestyle protection, investment
and mortgage insurance needs of more than 15 million
customers across more than 25 countries. For more
information, visit www.genworth.com
In Europe, Genworth focuses on Lifestyle Protection
and Mortgage Insurance, working with banks, brokers,
advisers and other financial institutions.
Lifestyle Protection products help consumers meet
their payment obligations on outstanding financial
commitments such as mortgages, personal loans or credit
cards in the event of involuntary unemployment, illness,
permanent disability or death.
Mortgage Insurance (MI) protects lenders and investors in
the event that a mortgage borrower defaults on a loan and
the proceeds of the sale of the property are insufficient to
pay the outstanding debt. Our MI products enable lenders
to provide the end borrower with earlier and potentially
more affordable access to home ownership by allowing
them to put down a lower deposit.
For more information on The Genworth Index, please refer
to genworth.com, select the relevant country page and
then click on ‘Research and Publications’.
IA-4
Our Research Partners
Personal Finance Research Centre
The preparatory work that informed the development
of this year’s Genworth Index and the final report was
undertaken by David Hayes and Andrea Finney. David is
a Research Associate while Andrea is a Senior Research
Fellow in the Personal Finance Research Centre (PFRC),
an independent research centre based at the University
of Bristol which specialises in social policy research across
all areas of personal finance, mainly from the consumer’s
perspective.
The Personal Finance Research Centre has a national
and international reputation for policy-focused research
encompassing all areas of personal finance, including
over-indebtedness and debt advice, financial capability
and financial inclusion. PFRC has considerable expertise
in designing, undertaking and analysing both large-scale
quantitative and in-depth qualitative research, with a
particular emphasis on methodological studies and Index
construction. It has conducted research for government
departments, trade associations, regulatory bodies,
charities and the private sector. The work of the centre has
been influential in shaping policy, and several members of
PFRC act as technical and policy advisers to government
departments and other organisations.
Table & Charts
Chart 1: Overview of the 2012 Consumer Index results by country. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Chart 2: Top consumer financial issues in Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Chart 3: Top Consumer concerns in Latin America. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Chart 4: Top consumer financial issues in China. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Chart 5: 2012 Genworth index results Europe Market. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Chart 6: 2012 Genworth index results in Nordic Market (Denmark). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Chart 7: Top three consumer issues Denmark . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Chart 8: 2012 Genworth index results in Nordic Market (Finland). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Chart 9: Top three consumer financial issues, Finland. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Chart 10: 2012 Genworth index results in Nordic Market (Sweden). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Chart 11: Top three consumer financial issues, Sweden. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Chart 12: 2012 Genworth index results in Nordic Market (Norway). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
19
Chart 13: Top three consumer financial issues, Norway. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Chart 14: 2012 Genworth index results (France). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .22
Chart 15: Top three consumer financial issues, France. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Chart 16: 2012 Genworth index results (Germany). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Chart 17: Top three consumer financial issues, Germany. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Chart 18: 2012 Genworth index results (Great Britain). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Chart 19: Top three consumer financial issues, Great Britain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Chart 20: 2012 Genworth index results (Ireland). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Chart 21: Top three consumer financial issues, Ireland. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Chart 22: 2012 Genworth index results (Italy) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Chart 23: Top three consumer financial issues, Italy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Chart 23: 2012 Genworth index results (Spain). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Chart 24: Top three consumer financial issues, Spain. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Chart 25: 2012 Genworth index results (Portugal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Chart 26: Top three consumer financial issues, Portugal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Chart 27: 2012 Genworth index results (Poland) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Chart 28: Top three consumer financial issues, Poland. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Chart 29: 2012 Genworth index results (Turkey). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Chart 30: Top three consumer financial issues, Turkey. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Chart 31: 2012 Genworth index results (Greece). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Chart 32: Top three consumer financial issues, Greece . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Chart 33: Top consumer financial issues in Latin America. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Chart 34: 2012 Genworth index results in Latin America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Chart 35: Top three consumer financial issues, Brazil. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Chart 36: 2012 Genworth index results in Latin America (Chile). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Chart 37: Top three consumer financial issues, Chile. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
Chart 38: 2012 Genworth index results in Latin America (Colombia) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
Chart 39: Top three consumer financial issues, Colombia. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
Charts Cnt’d
Chart 40: 2012 Genworth index results in Latin America (Mexico) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Chart 41: Top three consumer financial issues, Mexico . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
Chart 42: 2012 Genworth index results in Latin America (Peru). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
Chart 43: Top three consumer financial issues, Peru . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
Chart 44: Top consumer financial issues in China . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
Chart 45: 2012 Genworth index results in China . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
Chart 46: Top three consumer financial issues, China . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
Tables
Table 1: Index Score, Denmark . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Table 2: Index Score, Finland. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Table 3: Index Score, Sweden . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Table 4: Index Score, Norway. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Table 5: Index Score, France. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Table 6: Index Score, Germany . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Table 7: Index Score, Great Britain. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Table 8: Index Score, Ireland . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Table 9: Index Score, Italy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Table 10: Index Score, Spain. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Table 11: Index Score, Portugal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Table 12: Index Score, Poland. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Table 13: Index Score, Turkey . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Table 14: Index Score, Greece. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Table 15: Index core, Brazil. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Table 16: Index Score, Chile. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Table 17: Index Score, Colombia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
Table 18: Index Score, Mexico. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
Table 19: Index Score, Peru. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
Table 20: Index Score, China . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
About Genworth
Genworth Financial, Inc. (NYSE: GNW) is a leading Fortune 500 global financial security company. Genworth has more
than $100 billion in assets and employs approximately 6300 people with a presence in more than 25 countries. Its
products and services help meet the investment, protection, retirement and lifestyle needs of more than 15 million
customers. Genworth operates through three divisions: U.S. Life Insurance, which includes life insurance, long term
care insurance and fixed annuities; Global Mortgage Insurance, containing U.S. Mortgage Insurance and International
Mortgage Insurance segments; and the Corporate and Other division, which includes the International Protection,
Wealth Management and Runoff segments.. Its products and services are offered through financial intermediaries,
advisors, independent distributors and sales specialists. Genworth, which traces its roots back to 1871, became a public
company in 2004 and is headquartered in Richmond, Virginia. For more information visit genworth.com
About Personal Finance Research Centre
The preparatory work that informed the development of this year’s Genworth Index and the final report was undertaken
by David Hayes and Andrea Finney. David is a Research Associate while Andrea is a Senior Research Fellow in the
Personal Finance Research Centre (PFRC), an independent research centre based at the University of Bristol which
specialises in social policy research across all areas of personal finance, mainly from the consumer’s perspective.
genworth.com/consumerindex
Disclaimer
The information, including any financial information, contained in this report is provided solely for information purposes only. It is furnished for your private
information with the express understanding, which the recipient acknowledges, that it does not constitute an offer to sell (or the solicitation of an offer to
purchase) any product or security, nor does it constitute investment advice and should not be relied on in making any investment decision. This report is
not an invitation nor is it intended to be an inducement to engage in investment activity for the purpose of section 21 of the Financial Services And Markets
Act 2000 (‘FSMA’).To the extent that this report constitutes such an invitation or inducement, it is directed only at: (i) investment professionals within the
meaning of article 19 of the Financial Services and Markets Act 2000 (Financial Promotion) 0rder 2001 (as amended) (the ‘Financial Promotion Order’); or (ii)
persons who fall within Articles 49(2) (a) to (e) (‘high net worth companies, incorporated associations etc’) of the Financial Promotion Order (all such persons
together being referred to as ‘relevant persons’).This report is intended for the benefit of market counterparties and intermediate customers (as detailed
in the UK Financial Services Authority’s rules).While the information contained in this report has been compiled in good faith, no representation is made as
to its completeness or accuracy. Genworth Financial does not accept any liability for the accuracy, adequacy or completeness of any information and is not
responsible for any error or omissions or the result obtained from the use of such information. None of Genworth Financial, its affiliates, directors, officers
or employees shall have any liability whatsoever for any indirect or consequential loss or damage (including, without limitations, damage for loss of profits,
business interruption or loss of information) arising out of the use of the information contained in this presentation. The recommendations, if any, contained
in this report are statements of opinion and not statements of fact. Genworth Financial makes no commitment, and disclaims any duty, to update or correct
or to provide notice as to any error or omission in any information contained in this report. Genworth Financial reserves the right to add, modify or delete
information in this report at any time. Nothing in this report constitutes legal, accounting, regulatory or tax advice. This report has no regard to the specific
investment objectives, financial situation or needs of any specific recipient. Recipients should make their own decisions based upon their own financial
objectives and financial resources. If in doubt, prior to taking any decision, recipients should contact appropriately qualified advisors.
©2013 Genworth Financial, Inc. All rights reserved.

Genworth Index:Measuring Consumer Financial

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