Sunday, 19 May 2024
BusinessYoung people no longer have the economic capacity to get into debt.

Young people no longer have the economic capacity to get into debt.

“Generations born after 1980 show a progressive delay in their age of emancipation,” states the latest Family Financial Survey (EFF) from the Bank of Spain (with data from 2022). According to this survey, 65.9% of young Spaniards between 18 and 34 years old lived in the family home in 2022, 13 percentage points more than in 2008.

This is one of the main causes and also consequences of the reduction in the wealth of the youngest, who barely have the economic capacity or to get into debt, and the results of the EFF do not include most of the rise in interest rates. official interest rates of the European Central Bank (ECB) or the inflation crisis.

The Bank of Spain survey reflects other known data: only 30% of households with the head of the family under 35 years of age own a home. In 2011, they were 70%.

Because the main home is the most important source of wealth in Spain, the median net wealth of the youngest has fallen to 20,000 euros, from 27,000 euros in 2020. While this median net wealth increases with age, until reaching its peak in the generations that are between 65 and 74 years old, as can be seen in the following graph.


According to the EFF, “net wealth is defined as the total value of assets (real and financial) minus the amount of debts. The value of cars or other vehicles is not included.” Therefore, the fall in the median net wealth of those under 35 years of age is even more worrying if we take into account that they take on less debt because they do not want to and, above all, because they cannot due to price increases or because the conditions bank financing (mortgage) are stricter.

“In 2017, the probability of having debt to purchase a main home was 15 percentage points lower for households with the head of the family between 45 and 54 years old compared to those who were between 35 and 44,” explains the Financial Survey to the families. “This difference was reduced to 4 percentage points in 2022. This seems to be the result of opposite evolutions in the holding of this type of debt by age groups: while said holding has increased uninterruptedly for households with the head of the family between 45 and 54 years since 2002, as a result of the aging of the indebted cohorts, for households under 45 years of age a decreasing trend has been observed since 2014,” he continues.

Inequality among the youngest

Median net wealth is the wealth that is in the middle of the group being studied. In the case of the youngest, 20,000 euros, compared to 142,700 euros for the total for households in our country. But among families with the head under 35 years of age, great inequality is observed, since the mean or average shoots up to 77,600 euros, because the richest among the youngest do have significant wealth.

For all households in Spain, the difference between the median and the average goes from 142,700 euros to 309,000 euros, which also shows great inequality between the richest and the poorest.


The Bank of Spain recalls that the most correct measure to see the evolution of net wealth is the median, precisely because it is “less distorted by the richest.” In the previous graph, you can see how families with more income (with more income) skyrocket their net wealth.

In fact, the richest 1% of families in our country held 19.4% of the total wealth in 2022, just 2.5 points less than the maximum in 2020, when they had 22.9%.


In this last graph, it is also observed that the richest 10% of families hold just over half of the total wealth in Spain. A proportion that has fallen slightly since the peak of the pandemic shock year.

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