New EU parliament must prioritize cost of living

Euroconsumers Consumer Affordability Barometer 2024 has a loud, clear message for the EU - make our lives more affordable.

The EU election ballot boxes have closed, and negotiations on the parliamentary groupings and key leadership positions are in full swing.  

Wherever they  will end up, consumers have one clear message for them: don’t forget about our wallets. That was already clear from Euroconsumers’ Election Fever survey, where cost of living reigned as the number one concern, and not without reason. Euroconsumers’ newly released annual Consumer Affordability Barometer now shows a worrying financial strain on many households in Belgium, Italy, Spain and Portugal.

Survival budgets become the norm for consumers

The results of Euroconsumers Annual Consumer Affordability Barometer are in, just as the latest cohort of MEPs take up office. We surveyed 17,000 consumers in Italy, Belgium, Spain, Portugal to find out consumers’ views of how affordable their everyday expenses are and how this impacts their quality of life. 

The study has run since 2018 so we now have a rich picture of how six years of shocks, stops and restarts with pandemics, war, energy crises and inflation surges have been felt by consumers. 

The 2024 Consumer Affordability Barometer found that many consumers’ budgets are squeezed to the max with no headroom for any unexpected costs and little, if anything, left over to save.  Although consumers found 2023 a little more comfortable than the previous year, it appears that progress on affordability and quality of life have stalled, and survival budgets are becoming the norm. 

Too many families are stretching out their budgets to pay for basic bills and costs, cutting back on any non-essentials and for some, finding they can’t afford vital services like health. 

Cost of living: the key crisis points

The key headlines from the Consumer Affordability Barometer make a tough first briefing for the 2024 cohort of MEPs:

Empty savings pots even for comfortable consumers:

A striking finding was that even those who say they have no difficulty paying housing costs and bills struggle to save money.

75% of Portuguese say it’s difficult to save any money, despite being able to cover household costs, with similar figures for Spain and Portugal.

Basic healthcare out of reach for some:

Consumers in all of the countries surveyed said that they found the cost of healthcare difficult. Paying for dental care, glasses and hearing aids and visits to the doctor cause the biggest concerns.

Half of Italians say they had difficulty affording to see a doctor.

Mental health affordability crunch:

Since the first Barometer in 2019, the importance people put on good mental health for their quality of life has risen in all the countries surveyed.  At the same time, the cost of mental health care has become less affordable. These financial barriers are concerning given that 46% of EU citizens said they had had a mental health problem in the last year.

25% of Spaniards and 28% of Portuguese struggle to cover the costs of mental health care.

High food price inflation:

Whilst the rate of inflation has fallen in recent months, prices for some products remain stubbornly high and are still well above where they were five years ago and show few signs of easing.   The cost of meat, fish, vegetables and fruit caused the most difficulty for people.

An extra 10% of Belgians and 18% of Spaniards said food prices were a struggle compared to 2019

Two thirds of people want the EU to deal with the cost of living crisis  

Euroconsumers election survey found two thirds of consumers (64%) put inflation and the rise in living costs at the top of their list of concerns the EU must deal with in the next parliament.  

In the priority ranking these acute affordability worries outstrip other equally serious issues in play like climate change, the war in Russia and Ukraine and the possibility of this escalating to a new world war.  This doesn’t mean consumers are not concerned about these major global threats, but it does underline the impact of consumers’ experiences of high costs and inflation.

EU and businesses must empower consumers in a recovering market

The incoming and returning MEPs in Belgium, Italy, Spain and Portugal have a full agenda ahead of them to create a European system that serves consumers better at the same time as delivering on major infrastructure, energy and security challenges. 

Without much financial security, consumers are vulnerable to future shocks like poor health or loss of employment, or bigger structural shifts like interest rate changes, supply chain disruption, trade wars or even another pandemic. 

This lack of spending power is also very bad news for growth and for the type of investment that the green transition relies on.

With so little funds available after the essentials are covered, is it realistic to expect that consumers can invest in energy efficient home retrofits, durable appliances or electric vehicles even if the long term financial and environmental benefits make it worthwhile?

That’s why it is crucial to continue the green transition with concrete support for consumers. If it is to work – and we need to make it work – we have to make it easy and affordable.  The cost burden that consumers are expected to bear as major market transitions roll out must be central to regulatory considerations – or they risk failure.

Every business, policy maker and political leader must face up to the reality of a consumer class under financial pressure who need allies in business and government to ensure they can regain some stability and take decisions that will make most of their depleted money. 

This will then empower consumers –  the largest collective group in the market – to improve it, to keep companies on their toes and to reach their own personal and group goals. 

The mandate is clear, now it’s time to build back trust and deliver on a market where consumers can not only survive but thrive. 

Read the full Consumer Affordability Barometer here.