Despite the pandemic, Lithuanians are living better: the middle class has been growing over the years

The income of the population grew

At a remote press conference organized on Tuesday, economist Nerijus Mačiulis said that using the OECD definition, the middle class includes people who receive 75 percent. up to 200 percent. Median (median) income of the country, and in Lithuania this group includes residents who earn between 819 and 2184 euros before taxes.

“By this definition, 57 percent can be assigned to the Lithuanian middle class – the country’s population: this is almost as much as Lithuanians are currently classified as middle class.

It is true that the middle class decreased by around one percentage point during the year, but this did not happen for a bad reason, ”noted N. Mačiulis.

According to him, the majority of the country’s middle class “switched” to the high-income category. Meanwhile, low, 75 percent. the proportion of the population receiving below-average wages
diminished.

“When evaluating data from Swedbank clients, the distribution of salaries received shows that the middle class has even increased slightly this year, and the lower-middle-income population has been the most affected by the pandemic; they are more likely to be unemployed, “Mačiulis said.

The situation is also reflected in the assets available

Still, the economist pointed out that the middle class is defined not only by the income it receives, but also by the wealth, financial obligations and the way of life of the population.

According to N. Mačiulis, the middle class in Lithuania is also strong according to indicators such as attendance at cultural events; According to this indicator, Lithuanians rank third in the European Union. However, according to physical activity, which is more typical of the middle class, Lithuanians stand out in a bad way. 39 percent. Representatives of the middle class in Lithuania do not play sports at all, when, by comparison, the proportion of those who do not play sports in Sweden is only 15 percent.

“This year from 29 percent. To 34 percent. Has increased the proportion of the population that has accumulated more than 2000 euros of financial assets. We also see a record last year, as high as 47 percent. Lithuanians they were on vacation abroad.

This is more than double than a decade ago, when only one in five Lithuanians had such an opportunity. During the pandemic, the travel statistics will, of course, be much sadder, but certainly not due to insufficient financial opportunities to travel, ”said N. Mačiulis.

Most are classified as middle class

Swedbank conducted a population survey, which showed that compared to last year, the distribution of the population by social class remains almost identical.

According to the statement, 1% has been attributed to the elite for several years in a row. almost a tenth of those surveyed, + 1% for the upper middle class (+ 1% since 2019), 59% for the middle class. (+ 1%), a quarter (-2%) for the lower middle class and 6% for the poor. (-1 percent).

Jūratė Cvilikienė, director of the Swedbank Financial Institute, said that despite the pandemic and its consequences for the population’s finances, people’s assessment remained stable.

“We can say that we live in the same way as in 2019. It is true that if we compare with the 2018 data, the change would be more significant.

Two years ago, the middle class was even 24 percentage points smaller, and more people considered themselves members of the lower middle class, ”he told a news conference.

According to the director of the financial institute, the definitions of middle class are varied, but it usually includes people who earn enough not to have to think more about meeting daily needs. The group, he said, can afford to go on vacation abroad once a year or have more frequent dinners at a restaurant, but they need to save more to buy a more expensive item.

“According to the survey results, 6 out of 10 respondents say they have enough money for their most important needs, but that to buy a more expensive item, they have to save,” said J. Cvilikienė.

Income – dissatisfied

It is true that it was emphasized that although the majority of the population classifies itself as middle class, the population is not satisfied with the income they receive, on average they rate it 5.5 out of 10 possible.

This figure was reportedly even lower than last year, when respondents rated their financial situation at 5.7 points.

“It can be assumed that the most pessimistic assessment was influenced by the pandemic, which reduced the income of part of the population and they may face financial challenges. Pessimism is also revealed in the assessment of future prospects: 62 percent. The population believes that their family income will not change in the next few years, and 11 percent claim to decline.

Only a fifth of the population expects income growth in the near future, ”said J. Cvilikienė.

Respondents are not optimistic about their prospects for the country’s economic situation in the coming years: 4 out of 10 respondents say that the economic situation will deteriorate slightly or even significantly, a similar proportion of the population think that it will not change, and only around 20%. expect improvements.

“The study also showed that to feel worthy, the population would need an average of 61 percent. Higher income. Interestingly, although the self-classification remains almost the same, expectations are already lower than last year, when the population wanted the 72 percent higher revenue, “said a Swedbank spokeswoman.

According to J. Cvilikienė, the lower expectations may have been caused by both rapid wage growth and the pandemic, causing residents to forego unnecessary expenses and adjust their basic needs.

According to the results of the study, 6 percent of the students evaluate their financial situation with 9 and 10 points. respondents: are very or completely satisfied with their income. They are usually representatives of the highest income and education groups.

Instead of traveling, invest in a home

Unexpectedly he received 10,000. The survey also showed an unplanned income of half of what the population spent on travel last year. Due to the limitations of the pandemic, people are redistributing their priorities and more money is currently being spent on home renovations – nearly a third of those surveyed.

The pandemic did not affect the attitude of the population to save children. As in the previous year, 83 percent. The country’s population currently saves or plans to save for the future of children.

“Generally, residents choose to save for offspring studies, the beginning of their independent life or the initial contribution of housing. It is gratifying that, in addition to the necessary necessities and the usual austerity measures, people also be actively thinking about your children’s future, ”said J. Cvilikienė.

In September 2020, Swedbank commissioned a representative survey of the country’s population on its financial situation and was carried out by the research company Spinter tyrimai. The study surveyed 1,006 residents of the country between the ages of 18 and 75.