Nearly one quarter of households in Iceland had difficulty making ends meet last year, new figures from Statistics Iceland show. The figure has never been lower and corresponds with an increase in households’ disposable income during the same period. Around 19% of those who were renting considered the financial burden of housing to be heavy last year, compared to 10% of homeowners. Renters were also much more likely to suffer material deprivation than homeowners.
Single adults with children have more difficulty making ends meet
In 2011, 51% of households in Iceland had difficulties making ends meet. Between 2010-2015, the figure was above 40%. In 2021, it measured 24.1%. Households’ gross disposable income is estimated to have increased last year, though high inflation mitigated a rise in purchasing power: in the third quarter of 2021, while households’ gross disposable income rose by around 6.34%, household disposable income per capita only rose by 0.1%.
Households with a single adult and one or more dependent children were more likely to have difficulties making ends meet: around half of them reported that to be the case, while only 16% of households with two or more adults and no children had such financial difficulties.
Renters report a heavier financial burden
Those in rental housing reported more financial difficulties than homeowners last year. While just over 4% of households in Iceland suffered material deprivation, the figure was just under 11% of households on the rental market, compared to only 2.4% of households living in their own property.
Around 22% of Icelandic households lived in rental housing in 2021. This figure has been dropping steadily since 2018, when it was at 31%. Between 2010-2015, a higher percentage of owners regarded their housing as a heavy financial burden, compared to the percentage of renters. Since 2015, the opposite has been true, as seen in the graph below.
According to the survey, a household is considered to suffer from material deprivation if it cannot afford three or more of the following items:
- To pay rent, mortgage, or utility bills.
- To keep the home adequately warm.
- To face unexpected expenses.
- To eat meat or proteins regularly.
- To go on a holiday.
- A television set.
- A washing machine.
- A car.
- A telephone.
If a household cannot afford four or more of the above items, it is considered to suffer from severe material deprivation.