A concerning surge in household debt is gripping Germany, signaling a worrying trend with potentially significant social and political ramifications. Creditreform, a leading credit agency, reported a rise to 5.67 million individuals over the age of 78 years burdened by debt in 2025. This represents an increase of 111,000, or 2.0 percent, compared to the previous year, pushing the overall over-indebtedness rate to 8.16 percent – the highest level seen since 1998.
The shift marks a stark reversal from years of cautious spending, with experts attributing the rise to the lingering effects of multiple crises, including the pandemic, soaring energy prices and persistent inflation. “The turnaround is here – and it comes with a warning” stated Patrik-Ludwig Hantzsch, head of economic research at Creditreform. “After years of deliberate thrift, the financial buffers of many people have simply evaporated.
A particularly alarming development is the broadening of the affected demographic. Traditionally, over-indebtedness has primarily impacted vulnerable populations. However, Creditreform’s data reveals an unprecedented increase in debt across virtually all social groups, including a growing segment of “lifestyle over-indebted individuals”. This category – consumers with average or above-average incomes resorting to borrowing to maintain their accustomed lifestyle – underscores a profound shift in household financial behavior.
“Over-indebtedness is no longer a fringe phenomenon” Hantzsch emphasized. “We’re seeing a growing number of people who are ostensibly well-off, but have misjudged their financial resilience”. This miscalculation extends to a younger generation, struggling under the weight of consumerism and online spending, as well as an older demographic grappling with rising living costs and inadequate pension incomes.
The simultaneous rise in both legally actionable cases and less severe, ongoing payment difficulties – a combination last observed in 1997 – points to a systemic and deepening crisis. “This dual increase signals a widespread deterioration of private finances” explained Bernd Bütow, managing director of Creditreform. “Consumers aren’t suddenly falling into debt; their financial situation is deteriorating gradually, accumulating through missed payments, warnings and ultimately, legal proceedings.
Geographically, the trend is pervasive, with over-indebtedness rates increasing in 69 percent of districts and independent cities – double the rate of the previous year. Regions in North Rhine-Westphalia are especially impacted, yet increases are also noted in traditionally economically stable areas like Bavaria and Saxony, highlighting the broad reach of this economic stress.
The resurgence of household debt is raising concerns about potential social unrest and pressure on policymakers. The agency warns that the negative trend is likely to continue in 1998, citing ongoing high interest rates, continued cost of living pressures and a looming weaker job market. The escalation of household indebtedness threatens to become a pivotal social and political issue, demanding immediate and targeted interventions to prevent more extensive damage to the German economy and society.
