Whether caused by illness, separation or job loss, the number of people in Germany struggling with excessive debt is rising. According to the new Overindebtedness Report by the Hamburg Institute for Financial Services (iff), around 5.67 million adults in Germany were overindebted last year, 111,000 more than in 2024. Single parents are particularly affected, while digital consumption poses a significant financial risk for young adults.
The iff publishes the Overindebtedness Report every year with funding from the foundation “Deutschland im Plus”. The report is based on data from debt counselling centres across Germany. People are considered overindebted if they are unable to repay their debts, even after reducing their standard of living.
For the latest report, which was made available to the news agency AFP on Friday, the iff analysed 224,768 counselling cases from 2015 to 2025, including 36,480 cases in which counselling began in 2025. The median debt among the counselling cases analysed was just over €19,000 last year.
The iff and the “Deutschland im Plus” foundation said financial difficulties are rarely caused by a single factor. Illness, unemployment and other personal crises often affect households whose financial room for manoeuvre is already limited by high housing costs. Nevertheless, health problems remained the most common individual trigger for overindebtedness, as they were the previous year. Illness, addiction or an accident were the primary cause in 17.8 percent of the cases analysed.
This was followed by unemployment or reduced employment at 14.9 percent. Failed self-employment accounted for 9.9 percent of cases, while consumer behaviour accounted for 9.5 percent. Income poverty was the primary cause in 9.1 percent of cases, followed by divorce and separation at 8.8 percent.
The report shows “that financial hardship is in most cases not the result of recklessness or a lack of discipline,” said Philipp Blomeyer, chief executive of the foundation, which specialises in preventing overindebtedness. “An illness, job loss or separation can fundamentally change a household’s financial situation within a short period of time.”
Single parents face an above-average risk of overindebtedness. According to the report, they account for 14.4 percent of people seeking debt counselling, with four out of five of them being mothers. This means single mothers are represented among those seeking counselling almost twice as often as their share of the overall population would suggest. Among single parents with three or more children, the overrepresentation is as high as seven times their share of the population.
The report identifies another particular pattern among young adults under the age of 25 who seek help from debt counselling centres. For this age group, liabilities to telecommunications companies are the most important trigger for financial problems, accounting for 17.7 percent of cases. These include instalment payments for smartphones, in-app purchases and streaming subscriptions. Debts to online retailers and instalment loans also play a role.
Across all age groups, instalment loans remain the most common type of claim, accounting for 21.8 percent of cases. As a result, the new EU Consumer Credit Directive is also becoming increasingly important, the iff and the “Deutschland im Plus” foundation said.
Under the new rules, which take effect from November, certain Buy Now, Pay Later offers will be subject to greater regulation, among other changes. Requirements for assessing creditworthiness will also be tightened. In addition, lenders are expected to refer people experiencing financial difficulties to debt counselling centres more consistently.
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