The expenses for families with children in Sweden have increased drastically

This year, the costs of an average family with children for food, electricity, interest and fuel are expected to total SEK 256,000. That is SEK 37,000 more compared to 2022 and a total of SEK 79,000 more than in 2021, a new survey shows.
– The large bulk of the costs is made up of food, but it is the interest rates that contribute the most to the cost increases, says Stefan Westerberg, private economist at Länsförsäkringar, in a press release.

In 2023, the costs of an average family with children for interest, food, fuel and electricity will amount to a total of SEK 256,000, according to Länsförsäkringar’s new calculations.

Of the total cost, food accounts for almost half of the household’s expenses, but what contributed the most to the cost increase this year is the mortgage interest, which increased by SEK 41,000.

– Households have to endure tough financial tackles from several sides at the same time and the costs take an increasingly large part of the income. In 2023, households spend 35 percent of their salary on interest, food, fuel and electricity. That is 4 percentage points more than in 2022, and compared to 2021, the proportion has increased by a whopping 9 percentage points, says Stefan Westerberg in the press release.

Large regional differences

Länsförsäkringar’s calculations also show significant regional differences. The costs have increased the most in Stockholm County, followed by Halland County and Skåne County. For an average family with children in Stockholm County, the costs are expected to amount to SEK 323,000 this year, which is an increase of SEK 23,000 in two years.

Västernorrland, Norrbotten and Gävleborg counties are the counties where households are expected to have the lowest expenditure on food, interest, fuel and electricity in 2023.

– The economic geography differs markedly between the different ends of Sweden. It has a big bearing on the social economy but also on the private finances and costs of households, says Stefan Westerberg.

In Västernorrland, an average family with children has costs that amount to SEK 208,000 in 2023.

– In Stockholm, an average family with children spends 38 percent on interest, food, fuel and electricity in 2023, while the corresponding share for the family in Västernorrland is 30 percent. The national average is 35 percent, he continues.

Expected to decrease in 2024

In 2024, household costs are expected to decrease somewhat compared to this year’s levels. At the same time, it is assumed to be significantly higher levels than in 2022 and 2021, according to Stefan Westerberg.

– There is light on the horizon in the form of lower interest rates and lower electricity prices. It is long awaited. In addition, we can expect that in 2024 we will receive a nominal salary increase that fully compensates for the cost increases. This means that in 2024 we will spend 33 percent of the salary on interest, food, fuel and electricity – thus slightly less compared to 2023. But we will not return to the levels we had a couple of years ago, he says.

“Financially difficult in the next few years”

According to Stefan Westerberg, a challenging economic time awaits many families with children in the future. He therefore believes that it would be appropriate with targeted efforts to those who are most in need of support.

– Many families will find it difficult financially in the next few years. It may therefore be reasonable for politics to ensure that financially vulnerable households with little or no margins get more left in their wallets, either through targeted tax reductions on earned income or increased contributions, he says.