Hungarians' financial health assessed, not much to cheer about in the results

In August 2024, the MNB conducted a representative survey of 1,500 people aged 18-79 years old to assess the financial health of the population, and the results show that

14% of the Hungarian population has a critically low level of financial health (scores between 0 and 29), while a further 29% have a vulnerable financial health (scores between 30 and 49).

This level is closely correlated with household income: more than half of those living in households with a net income below HUF 400,000 fall into the two most vulnerable financial segments. The largest sub-set is made up of moderately risk-taking consumers in terms of financial health, scoring between 50 and 69 out of 100, representing 35% of the national population.

In defining financial health, the focus is on financial behaviour, i.e. the range of daily habits and activities that can make our financial lives secure and manageable, and on planning and setting financial goals for the future. Accordingly, the MNB, with the help of market research experts, has created the dimensions of the National Financial Health Index along 4 sub-indices in addition to the main index. These sub-indices are "Control over Finances", "Ability and ambition to save", "Financial Situation", and "Financial Resilience".

Out of these, Hungarians scored best on "Control over their finances", with a sub-index score of 60 out of 100 available. There are also significant differences in this area: although 63% of the population admit to always or most of the time monitoring their monthly expenditure, only 44% make a plan to manage their expenditure and income. The age groups most likely to plan are 18-29 and 70-79. The value of the sub-index also rises significantly as educational attainment increases, from just 54 points for those with no more than primary education to over 66 points for higher education graduates.

The lowest score, 48 points, is for the sub-index "Ability and ambition to save".

According to the results of the self-reported, representative survey, only 19% of Hungarians feel that they are fully or adequately financially prepared for retirement, while 53% think they are not adequately prepared. In addition, 49% try to save money on a regular basis, while around 30% neither can nor do so. The indicator measuring the ability and ambition to save is highest among Hungarians under 30 (53 points), while Hungarians aged 50-59 score lowest. Only one in three respondents (only 33% of respondents) are saving for long-term goals.

The sub-index measuring the financial situation shows 56 points. Within this, only 19% of the population are satisfied with their own financial situation. 61% are always able to pay their bills on time and 29% most of the time. 55% feel that their financial situation limits their ability to achieve goals that are important to them - significantly worsening their sense of financial health. When looking at gender differences, there is a significant difference, with men scoring an average of 60 points on the indicator, significantly higher than women's 52 points. 20% of the population feel burdened by debt repayments and 5% are unable to repay on time.

Financial resilience was the second weakest at 49 points. 40% of the population would not be able to survive for more than a month if they lost their main source of income - including half of respondents who would not be able to survive for more than a week. Less than a third of Hungarians have a reserve equivalent to half a month's income to cover unexpected expenses, while 47% think they would get financial help from a relative or friend in the event of a financial crisis.

Cover photo (for illustration purposes only): Getty Images