Rising Over-Indebtedness: A Looming German Financial Crisis

Over-indebtedness is increasing again in Germany after years of decline, affecting 5.67 million adults. Rising costs and economic weakness are the main causes. Young adults and seniors are most vulnerable. The issue is predicted to worsen due to high interest rates and inflation.

In Germany, over-indebtedness among adults is climbing once more after a period of decline, according to Creditreform's recent data. Currently, 5.67 million adults face debts exceeding their income in 2025, marking a 2% increase. This situation elevates the over-indebtedness rate to 8.16% from 8.09%.

Economic researcher Patrik-Ludwig Hantzsch from Creditreform highlights that depleted savings, after years of cautious spending, have contributed to this trend. This surge crosses various social strata, including middle-income groups striving to uphold living standards by resorting to deferred consumption.

Particularly at risk are young adults under 30, driven by credit-driven spending and online shopping, and seniors over 60, who struggle with rising living expenses and fixed pensions. Creditreform warns that the situation may deteriorate further in 2026 with high interest rates, a challenging labor market, and persistent inflation.

(With inputs from agencies.)