Over half of Austrians on financially shaky ground: survey

More than 50 percent of Austrians feel financially unprepared for any unexpected turns in life, a new survey has found.

a pile of euros with a miniature couple on them
Most Austrians don't feel financially well-informed, a recent survey found. Photo by Mathieu Stern on Unsplash

Money is really tight for people right now: inflation is high, energy prices are spiralling, even shopping for essentials in the supermarket is putting a strain on people’s wallets.

And that’s before you even think about pensions and planning for the future.

READ ALSO: What is Austria planning to do to cushion the rising cost of living

Sixty-six percent of Austrians are finding it increasingly difficult to make the right pension and financial decisions, according to a recent survey from Swiss Life, as reported by Austrian daily Der Standard.

The results were based on a survey of 1,050 people from Austria aged from 18 to 70 at the start of April.

It seems that many people are also unhappy with financial decisions they’ve made in the past.

A majority – 51 percent – of Austrians said they had made at least one important financial decision that they would later like to have reversed.

And around a third had even lost a large amount of money because they hadn’t informed themselves well enough.

‘Knowledge is power’
A lack of information around finance seems to be quite a common problem: only 34 percent of survey respondents said they felt really well-informed about financial topics.

It’s rather worrying that so many people feel unprepared for the unexpected; a break-up, an appliance breaking down, there are many things that can put additional pressure on household budgets.

“The study once again underlines how important and forward-looking financial education and skills are,” said Christoph Oberlacher, CEO of Swiss Life Austria.

“Knowledge is power. Only those who have the skills and abilities to make financial decisions on an objective basis will be able to lead a self-determined life in all matters in the future,” he added.

And people clearly recognise they need help to become better informed.

A high proportion of those surveyed – 74 percent – thought that getting advice on financial and pension issues was important, with 66 percent saying they felt having a personal adviser was increasingly important.

This comes as many banks and financial providers have expanded apps and online offerings to make it easier for people to access financial products.

Unsurprisingly, perhaps, it is the youngest people in the survey – those born between 1981 and 2004 – who attached the most importance to seeking advice – 78 percent.

And people in Austria really trust their financial and insurance providers – the survey found that trust was high across all generations at 81 percent.

‘Increased desire for stabiity’
Only a third of those surveyed did not have a permanent adviser at a bank or insurance company.

“The years of the pandemic in particular have increased the desire for stability and security in society as a whole,” said Oberlacher.

The pandemic turned life upside down for many people, so it is not surprising that 86 percent of those surveyed considered financial autonomy to be a fundamental need. 

Fortunately, 71 percent said achieving this was a realistic goal for them personally.

And the survey showed that people have a clear sense of personal responsibility for the outcome of their decisions, too: 75 percent of Austrians said they felt responsible for the success – as well as the failure – of their financial provisions.

People may feel they are not well-informed, but most – 68 percent – had clear financial goals, nonetheless. Every second person said they were planning a decision with major financial implications in the next year.

Finally, 27 percent of those who were approaching retirement or had already retired (people born between 1946 and 1964) said they wished they’d taken personal advice when making decisions about retirement.

READ ALSO: UPDATED: Why some households in Vienna are set for a gas price hike

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Where are energy prices going up (again) in Austria?

On Wednesday, energy companies announced that some households in Austria will be paying even more for gas and electricity soon. Here's what you need to know.

Where are energy prices going up (again) in Austria?

On Wednesday August 3rd, EVN and Wien Energie – both part of the Energieallianz Austria (EAA) group – announced they will be increasing energy prices from next month.

According to ORF, the increase announced by Lower Austria energy supplier EVN is “substantial” and will apply to gas and electricity.

EVN – which is mostly state-owned – blamed the move on price increases on the international wholesale markets.

FOR MEMBERS: Reader question: Should I buy an electric heater in Austria this winter?

Higher prices in Lower Austria

From September 1st, customers that get both gas and electricity from EVN should expect to pay at least €100 more a month. Around 50 percent of EVN customers – or those on a “classic tariff” – are expected to be impacted by the price increases. The increases won’t affect households on ‘price guarantee’ contracts.

However, to counteract the extra costs, EVN has also announced some money-saving measures for customers, such as registering in the customer portal, opting for email invoices or paying by direct debit. Additionally, a social fund of €3 million has been set up to help hardship cases.

In the future, EVN intends to adjust prices twice a year on April 1st and October 1st.

Increases (again) in Vienna prices

At Wien Energie, prices for electricity will be going up by €36 a month (based on an annual consumption of 2,000 kWh), and gas prices will increase by €60 a month (based on 8,000 kWh), reports Der Standard.

Customers will be notified by letter in August and the new rates will be in effect from September 1st. Those with a price guarantee or floating tariff will not be affected.

READ MORE: Austria starts anti-inflation payments with €180 bonus family allowance

EEA cited increases on the Austrian Electricity and Gas Index as the reason for the price increase. Since August 2021, the cost of electricity has gone up by 247 percent and gas by 323 percent.

A price adjustment in line with the index was due to come into effect at EAA in January 2023, but this has been brought forward.

Price caps and government subsidies

On July 20th, the Lower Austria state government announced a price cap on electricity prices to mitigate the financial impact of rising energy costs in the province.

As of September, residents in Lower Austria will be able to apply for the Strompreisrabatt (electricity price discount) to receive a price cap of 11 cents per kilowatt hour of power used.

The initiative will cover 80 percent of an average household consumption and will cost €250 million, reports Kurier. The funding will run until September 30th 2023.

Governor of Lower Austria Johanna Mikl-Leitner said: “Our electricity price relief brings balanced support for all Lower Austrians and creates a clear incentive to save energy.”

READ ALSO: Inflation at 9.2% in July: How to beat rising prices in Austria

The subsidy will be deducted directly from the energy bill from October and the calculation will be based on the number of people living in a household.  

The Austrian Federal Government then announced a similar nationwide initiative one week later.

According to a statement released on July 27th, the aim of the electricity price cap is to “support the Austrian population to ensure an affordable energy supply for a certain basic need”.

At the time of the announcement, no further details were provided but the government said that the conditions for the price cap would be developed by the end of August.

EVN and Wien Energie said that these measures by the government of Lower Austria and the federal government should help to mitigate the impact of rising energy costs on households.