The majority (69%) of Portuguese families maintained a financial situation similar to the pre-pandemic period and 3% even improved it, but the remaining 28% felt the impact of the pandemic crisis. This is the result of a survey that shows that the most affected households had intermediate incomes and less education, many of them linked to the accommodation and catering sector.
“According to the 2020 Survey on the Financial Situation of Families, carried out between October 2020 and February 2021, 69% of households in Portugal considered that their financial situation was similar to that before the pandemic, 28% considered it worse and 3% considered that it had improved“, reveals the National Institute of Statistics (INE). Of these 28%, 24% were still able to pay expenses with their income alone.
The families most affected by the pandemic were the youngest, with children in the household, with intermediate incomes, with less than tertiary education and working as self-employed — 71% compared to 34% for employees.
“The evolution of income due to the pandemic showed great variability depending on the sector of activity in which the reference person worked”, note INE and Banco de Portugal (BdP). On the one hand, we have accommodation and catering, where 74% of the families registered a loss of income. On the other hand, we have sectors such as information, communication and financial activities or public administration, education and health in which the reduction in income affected less than 30% of families.
Families cut spending on food, clothing and travel
Faced with the loss of income caused by the pandemic, most families (67%) "declared having reduced expenditure on food, clothing, travel or other consumer goods and services (non-durable goods and services)". This was the first measure to contain spending in view of the decrease in incoming money.
However, the Portuguese also resorted to savings accumulated in the past or the sale of valuable goods, as well as bank moratoriums for home loans and help from family and friends. The deteriorating financial situation also led to the postponement of the purchase of a house, car or other durable goods.
"Much less common was the use of other types of measures, such as moratoria on other loans, leaving some bills unpaid, renegotiation of existing loans, taking out a new loan, moratoriums on the payment of house rent or help from social solidarity institutions”, note INE and BdP.
The 2020 Household Financial Situation Survey (ISSF 2020) was carried out between October 2020 and February 2021 by INE and Banco de Portugal.