Higher prices and rising interest rates are some of the consequences of the last year’s high inflation.
It has become more difficult for Swedish households to cope with everyday life and a new announcement from Länsförsäkringar shows yet another financial blow.
DON’T MISS: The grant can give you SEK 60,000 – that’s how many have applied
Despite the Swedish krona losing value, the child support has not changed.
In March 2018, the grant was increased from SEK 1,050 to SEK 1,250 per month to better adapt it to the financial situation. Since then, the grant has remained at SEK 1,250 per month and per child.
– Families with children in general and especially those with small margins find it more difficult to get the household finances together, says Stefan Westerbergprivate economist at Länsförsäkringar, to News24.
READ MORE: This is how much Swedes save right now – are you above average?
Swedish households have lost SEK 9,600
Since 2018, inflation has been a total of 28 percent, which means that today’s child support is 28 percent lower in value.
In order for the child support to match today’s inflation, it needs to land at SEK 1,600 each month, instead of today’s SEK 1,250.
Because of this, Swedish families have lost a lot of money, says Westerberg.
– Approximately SEK 9,600 in cash, he says and continues:
– Around SEK 12,000 more if you put the money on the stock market with a return that followed the general index with dividends.
READ MORE: The contribution many miss – can save you SEK 600
1.4 million Swedish households receive too little
Stefan Westerberg sees major consequences with the loss of value of child support.
– We can get a situation where economic exclusion leads to social exclusion. Then we know that there is a high correlation between having a bad financial situation and mental illness.
Today, there are approximately 1.4 million families who receive child support, according to Länsförsäkringar.
If inflation continues and child support is not raised, it will erode even more.
– It would mean a weakened purchasing power among families with children, which in a practical sense means that child support is enough for fewer and fewer things, and thus loses relevance.
DON’T MISS: Unknown insurance that few people know about: “One million kroner”
Covers far from all costs
A child allowance of SEK 1,600 a month would not, despite adjustment for inflation, amount to the costs a child brings.
According to Länsförsäkringar, the total cost of a child, from birth to age 18, is approximately SEK 2.3 million. With deductions for child and student allowances, the sum is just over two million, the company writes on its homepage.
Westerberg believes that today’s child support only covers a small and decreasing part of the costs that you as a parent are expected to bear.
He urges worried parents to reduce their children’s anxiety as much as possible.
– To the extent that you are worried about the economy, it should preferably not spill over to the children, he tells Nyheter24.