In 1974, Swedbank began tracking household finances. Since then, the bank has never seen child benefits at such a low level as they are now.
The last time the benefit was increased was in March 2018, from 1,050 to 1,250 SEK per month. A few years later, Sweden’s inflation skyrocketed. However, since child benefits are not automatically adjusted for inflation, they have significantly lost their value.
“After the increase in 2018, we saw that child benefits covered 36% of the cost for a ten-year-old. Today, it only covers 25%,” said Madelén Falkenhäll, Swedbank’s financial health economist, to Placera. “It’s exceptional.”
Financial health is a term from the United Nations that defines feeling secure in one’s personal finances, having control, resilience, and financial freedom. Swedbank conducts annual surveys on Swedes’ financial health, measuring their financial ability, daily financial knowledge, savings, loans, and financial security. It is in this survey that the bank has compiled statistics on child benefits.
The value of child benefits has been eroded by about 15%, according to the bank’s calculations, which also show that the group most affected are single parents. The maintenance support that single parents can receive from Försäkringskassan has also decreased by 18% in fixed prices since the last increase in 2021.
“It hits hard on households with single parents, many of whom have a very vulnerable economy,” said Madelén Falkenhäll. “For many, child benefits and housing benefits can be crucial.”
Nearly a third of the country’s single parents find it difficult to make ends meet at all. “Almost half of them have had to dip into their savings, and about a fifth have had to borrow just to buy necessities,” says the Swedbank economist.
“What advice do you have for single parents with tight finances?” “It’s really tough when you don’t have enough money, but it’s important to have a tight grip on your finances. Make sure to have a budget and follow it closely,” responds Madelén Falkenhäll. “I understand that this group already turns every penny. They resort to tricks like bringing packed lunches to work. You can also review all your subscriptions and make sure your insurance is good.”