“Poverty will increase in Switzerland”

Saving on holidays and other luxuries is easy. When renting and eating less. Inflation brings those who cannot afford luxury today to the brink of despair. Annual inflation was 2.8 percent in 2022 – higher than it has been in a long time. While most of the population can cope relatively well with this rise in prices, people at the lower end of the income scale face big problems.

One way to save money on groceries is to shop at one of the 22 Caritas grocery stores. This is only possible with a special shopping card. It can be used by people living at or below the subsistence level, receiving economic benefits or AHV/IV supplementary benefits, or in the process of debt restructuring.

Caritas spokesperson Daria Jenni stated that the frequency in Caritas markets increased by 33 percent last year, “The increase in sales was between 30 and 40 percent, especially in the second half of the year compared to the same months of the last year.” According to Jenni, counselors from the Caritas social and debt counseling service also faced growing financial concerns from those seeking advice.

“Price inflation partially reflects reality”

The big cost shock is still at hand: Health insurance premiums will average 6.6 percent higher from January 2023. Electricity prices in Switzerland will increase by an average of 27 percent from 2023. In addition, there are higher side costs and increased rents.

Philipp Frei, Managing Director of the Budgetberatung Schweiz umbrella organization, expects an increasing number of investigations. “The 2.8 percent increase in prices reflects reality only to a limited extent – inflation is significantly high in key cost items such as energy.” Energy costs are currently the biggest issue for those seeking advice.

In a budget consultation, room for action is discovered where savings can still be made, for example mobility, shopping or holidays. But Frei says more and more people are moving towards a limit where the savings potential is almost nonexistent.

Less and less money for crises

The problem: The savings capital of the Swiss population has been falling continuously for 20 years. For many, there is hardly any reserve for larger jumps in prices. According to Frei, this is not just in the lowest wage quintiles, but increasingly in the middle class as well. “Life has been getting more expensive for a long time now, only by a bigger leap this time.”

According to the latest Swiss wage structure survey in 2020, the median wage for a full-time position in the Swiss economy as a whole was CHF 6,665 gross monthly. Frei estimates that a family of four could live on that amount. It tightens quickly underneath. For as little as 5,000 francs, a family literally barely lives off.

If it is no longer possible, those affected turn to social institutions such as winter aid. It has hands full. “Overall, despite the end of the Corona crisis, the number of applications is still well above the pre-Corona level,” says Daniel Römer (60), Managing Director of the Zurich office.

Before Corona, Zürcher Winterhilfe supported 30,000 people a year. There are currently more than 55,000. Römer believes that requests for help will continue to increase. “Especially energy costs are a big problem for many people.” Römer promises that winter aid is prepared and has sufficient reserves to assist all applicants.

Caritas spokesperson Daria Jenni agrees. About 700,000 people are considered poor in Switzerland today. “We expect poverty to rise again in Switzerland,” warns Jenni.