• Majority (52%) of Europeans claim their financial health hasn’t been affected by the pandemic at all

• But only 28% say the same about the financial health of all people in their country

• People in the Netherlands are most optimistic about their current financial health, rating it 19% higher than the European average

The latest consumer survey from the Think Forward Initiative (TFI), an organisation dedicated to improving financial wellbeing, has unveiled the state of European financial health in the wake of the Covid-19 pandemic. TFI’s analysis of over 8,000 respondents across eight European countries found that whilst the continent’s financial health was adversely affected by the pandemic, Europeans perceived these effects to be felt by people in their countries to a greater extent than by themselves as individuals.

Impact of Covid-19 on financial health – self vs country

Assessing the lasting impacts of Covid-19, the majority of Europeans (52%) said their financial health hasn’t been affected at all by the pandemic and a small (12%) minority even saw an improvement. Demographics influenced this picture, with ill effects disproportionally felt by those below 55 years of age, as well as those part of larger households with more than three members.

Within Europe, the Dutch reported the strongest financial health currently, perceiving it to be 6.9/10 – 19% higher than the European average of 5.8/10. On the other side of the spectrum, those in Turkey are the least satisfied with the state of their financial health, and reported a considerably lower average rating of 4.9/10, 16% lower than the European average.

TFI’s findings also highlighted a mismatch between the rating of the state of one’s own financial wellbeing versus that of all the people in their own country. Individuals in all eight countries consistently regarded their own country to be faring worse than they themselves were as a result of Covid-19. In fact, 61% of respondents believe that the pandemic deteriorated the financial health of their country, considerably more than those who indicated a fall in their own financial health (36%). Likewise, in contrast to the majority of Europeans (52%) who saw no change in their financial wellbeing, only 28% said the same about their country.

Perhaps unsurprisingly, it was the Dutch who, again, reported the current highest financial health rating in Europe for their country, at an average of 5.8/10, compared with an average of 4.8 for the wider bloc. In Turkey, as with their individual financial health, people rated that of their country as the lowest in Europe, averaging a 4.0/10.

Maria Ferreira, Senior Behavioural Economist at TFI commented on the findings:

“Whilst Europeans feel concerned about the impact of the pandemic on their country’s financial health, they have remained comparatively way more optimistic about their own financial situation. This tendency to believe that one is less likely than others to experience a negative event is known as optimism bias. Optimism bias, alongside improved personal resilience over a year after Covid-19 started, explain why Europeans have displayed a remarkably positive attitude towards their finances when faced with a longer than expected pandemic reality. Despite perceiving both their peers and

their wider nations as suffering more, consumers also remain optimistic about the near future, forecasting their own and others’ financial health to continue recovering in the upcoming year.

“The TFI survey also suggests that this optimistic mindset is beneficial in many ways – it fosters lower stress levels and encourages people to take actions to feel under control, which in turn leads to a better overall well-being. Whilst an optimistic outlook is to be welcomed, it is worth sounding a note of caution, that optimism by itself does not lead to “rose-tinted glasses”. As a result, we encourage people to proactively review their finances so that they are more aware of their financial status and can seek out alternatives and guidance where required.”