2025 is shaping up to be a year of significant turnaround for households, following the recent years of cost shocks. With higher wages, lower interest rates, and tax cuts, most households are expected to see an increase in purchasing power. This optimistic outlook is detailed in a new report by Swedbank and Sparbankerna.
According to Swedbank’s calculations, most households can expect to have an extra 600 to 3,000 kronor in their pockets each month compared to January 2024. Homeowners, especially, are projected to benefit even more. For instance, a two-child family living in a villa could see an additional 4,300 kronor per month, as per the bank’s illustrative example.
The report highlights that the biggest winners will be households who own their homes and have high incomes. They stand to gain from the largest tax cuts in both absolute amounts and percentages, while also benefiting from decreasing mortgage rates. Swedbank notes that tax cuts on investment savings accounts and capital insurance policies will further contribute to these groups being the major beneficiaries in 2025.
Conversely, tough times are expected to continue for the unemployed and students, often residing in rental apartments. This is partly due to income increases potentially being offset by rent hikes. Swedbank anticipates an average rent increase of 5% for 2025. Additionally, the temporary increase in housing allowance for families with children up to a maximum of 1,350 kronor will expire on July 1st. On a brighter note, the cap on unemployment benefits will be raised on October 1st, potentially providing up to an extra 800 kronor per month before taxes.
Looking at the economic landscape for households in 2025, Swedbank’s data provides insights into the expected changes in purchasing power across different household types. While some groups, such as a two-child family in a villa with a 2% amortization rate, are projected to see significant increases, others like students and the unemployed may experience decreases.
It is evident from the report that the distribution of economic impacts in 2025 will be varied, with some segments of the population benefiting more than others. As households navigate through these changes, it will be essential to adapt to the evolving financial landscape and make informed decisions to ensure financial stability and well-being.
In conclusion, 2025 holds promise for many households in terms of increased purchasing power, but it also presents challenges for certain groups. By understanding the nuances of these economic shifts and planning accordingly, individuals and families can navigate the changing financial environment with greater resilience and confidence.