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THE GEN WORTH INDE X
M E A S U R I N G C O N S U M E R F I N A N C I A L V U L N E R A B I L I T Y A N D S E C U R I T Y I N 1 8 C O U N T R I E S
ME
ASURING CONSU
ME
R
FIN
AN
CIAL
VULNERABILIT
Y •
T heGENWORTH
INDEX
Volume 4 – 4th Quarter 2010
1
CONTENTS
The Genworth Index of Consumer Vulnerability: Key Findings
2
Consumer vulnerability in Europe & beyond: an introduction to the Genworth Index 3
Creating the Genworth Index: in brief
4
Consumer vulnerability persists in 2010
5
Deconstructing the Genworth Index
6
Four-year trend of vulnerability in Europe 7
Country reports
8
Endnotes
26
Appendix tables 26
About Genworth Financial
30
Our research partners 31
2
THE GENWORTH INDEX OF CONSUMER VULNERABILITY, SUMMER 2010 K E Y F I N D I N G S
Welcome to this fourth edition of The Genworth Index. The Index in 2010 has tracked consumer financial
vulnerability in 14 countries in Europe, three in North America and Australia in a survey of nearly 14,000
households. With an average Index score of 19 points across all 18 countries the balance remains tipped slightly
towards relative consumer financial vulnerability rather than security. No change in the average Index score for the
14 European countries since 2009 conceals considerable change for some individual countries.
In summary:
Greece worsened to become the most financially vulnerable country of all 18 surveyed in 2010, with a high
relative vulnerability score of 76 on the Index.
Portugal saw a deterioration in households’ situations similar in magnitude to Greece; Spain, in contrast,
experienced no change on the Index.
For the first time, Ireland saw an improvement both in real terms (falling 27 points on the Index) and relative to
other countries (improving five places).
Mexico, USA and Canada fared better than much of Europe due largely to greater optimism in these North
American countries.
With an Index score of 23, newcomer Mexico stands mid-table alongside Turkey, France and Great Britain.
Australia shadows the USA, both countries scoring just above zero on the Genworth Index.
Canada joins the Nordic countries, scoring below zero – indicating relative financial security – on the Index.
Since the Index baseline edition in 2007, experience of financial difficulty has increased significantly in Europe,
compounded by a doubling in the rate of householders’ pessimism for their own financial futures.
3
CONSUMER VULNERABILITY IN EUROPE & BEYOND: AN INTRODUCTION TO THE GENWORTH INDEX
The Genworth Index has been developed to provide a clear and robust estimate of households’ general financial
situations. It can be used to compare – at a glance – levels of consumer financial vulnerability across different
countries and to track change in individual countries over time. Now in its fourth edition, the Index encompasses 18
countries, 14 from Europe, three from North America and Australia. Of these, ten European countries have been
included since the very first edition, enabling a year-on-year cross-national comparison.
Countries included in all years Countries introduced since the baseline
Denmark, France, Germany, Great Britain, Ireland, Italy,
Norway, Portugal, Spain, Sweden
Finland, Poland (since 2008); Greece, Turkey, USA
(since 2009); Australia, Canada, Mexico (since 2010)
The Index score itself provides a snapshot of the overall level of relative financial vulnerability in a given country or
group of countries. The Index incorporates two separate dimensions of consumer financial vulnerability into its
design: a measure of the level of financial difficulty experienced by the household (a proxy for over-indebtedness);
and the household’s expectations for their own future financial position. A vulnerable household is one that has
experienced financial difficulty frequently in recent times and which does not expect the situation to improve in the
coming months. Conversely, a secure household is one which has rarely experienced financial difficulty in the
recent past and which expects its situation to improve further.
The Index score is simple conceptually. It represents the ratio of households within a country that are financially
vulnerable to those that are financially secure. It is also simple to repeat year on year. However, this simplicity is
underpinned by extensive developmental work and an underlying sophistication in the Index’s original design.
The Genworth Index is the result of a developmental project commissioned in 2007 amid growing concern about
rates of consumer borrowing and over-indebtedness. The purpose of the project was to devise an internationally-
relevant, standardised and timely measure of consumer financial vulnerability. This involved an initial survey of ten
countries in Europe using a suite of questions designed to measure over-indebtedness and rigorous exploratory
analysis of these data.
To policy-makers, financial vulnerability can be seen as an early indicator of severe financial stress and over-
indebtedness among households. Relative financial vulnerability, as captured by the Genworth Index score,
provides the barometer by which policy-makers can gauge the overall balance between vulnerability and security
within a given nation state, enabling comparisons to other countries and over time. The measure is sensitive both
to the net movement of households in and out of financial vulnerability and in and out of financial security.
Financial security is important to households. It provides a foundation on which they can make financial and
potentially life-changing decisions. Financial vulnerability meanwhile signifies how difficult households are finding
simply meeting their existing day-to-day financial commitments, with commensurate difficulties in planning for the
future. Whether or not households’ expectations for their own future financial well-being prove accurate, these
expectations nonetheless play a vital role in driving current financial behaviour and decision-making.
The global financial crisis that emerged in 2007 and which has been followed by a deep recession in many
countries has sadly meant that many of the earlier concerns have been realised. In previous editions, the Genworth
Index has highlighted how the effects of the crisis – and Government responses to it – have been felt among
households in Europe. Ireland’s gradual shift from relative financial security in summer 2007 to the country with the
highest level of relative vulnerability in autumn 2009 heralded troubles in the macro economic situation there. The
effects of these difficulties on individuals and their families are underlined by an increase in that period in the
number of clients helped by the national free and independent Money Advice and Budgeting Service.1 And
Greece’s introduction to the Index as the third most vulnerable country in 2009 hinted at the financially straitened
times that have since culminated and have led to severe austerity measures and considerable civil unrest.
4
CREATING THE GENWORTH INDEX: IN BRIEF
The survey on which the Index results are based reaches out to a nationally representative sample of around 1,000
households in each country that is included.2 The Index questions are asked only of householders – an adult in
whose name the accommodation is owned or rented, or his or her partner – aged 18 or over in order to provide
meaningful data from those with financial responsibilities. The resulting sample size totalled nearly 14,000
households across 18 countries for this 2010 edition. All data were collected during June 2010.
For each edition, the Index is calculated in a standardised way. Exploratory data analysis for the baseline edition
identified two underlying dimensions to consumer financial vulnerability as conceived by the project team.3
The first of these dimensions concerns current experience of over-indebtedness, which takes into account
households’ level of consumer borrowing and savings, self-reported difficulty in meeting ongoing financial
commitments and default on household bills and other commitments in the last 12 months due to a lack of money.
Statistical analysis showed that a single self-reported measure of the frequency of current financial difficulties
adequately represented this dimension. The second dimension relates to households’ expectations for their own
future financial well-being and is captured using a question that asks householders’ directly about this.
The result is an Index that is derived from responses to the following two key questions:
Thinking about the general financial position of your household, how often do you experience financial
difficulties?
Looking ahead over the next 12 months, do you think the financial position of your household will improve, stay
the same or get worse?
The response options to these two questions produces 12 possible combinations of answers. Further rigorous
statistical analysis for the baseline edition drew on the information provided by the remaining measures to identify
how the 12 combinations of answers were best grouped together. This found that four distinct groups could be
identified from the combinations of responses to the two key questions alone, as shown below.
Expectations of the future financial position of the household
Get better Stay the same Get worse
Frequency of experiencing financial difficulties
Often or always B A A
Sometimes B C A
Hardly ever D C C
Never D C C
These four groups are defined as follows:
Group A, ‘Financially Vulnerable’, comprises households that have been experiencing financial difficulties
often or all the time and who feel that their situation is unlikely to improve.
Group B, ‘Strivers’, is a relatively small group of households who tend to have experienced financial
difficulties relatively frequently but who now feel more confident (that is, they are expecting their situation to
improve). These households are neither financially vulnerable nor financially secure.
Group C, ‘Circumspect’, is a large group who have not often experienced difficulties, if at all, and who tend to
expect their situation to remain the same. These are, again, neither financially vulnerable nor secure.
Group D, ‘Financially Secure’, is made up of households that have rarely experienced financial difficulties, if
at all, and who expect their financial situation to improve.
The Genworth Index takes the ratio of the percentage of people who are financially vulnerable relative to the
percentage of those who are financially secure. The resulting value is rescaled so that a score of 100 indicates
maximum possible relative financial vulnerability and a score of -100 indicates maximum relative financial security.4
5
CONSUMER VULNERABILITY PERSISTS IN 2010
A Genworth Index score for 2010 of 19 points across all 18 countries surveyed indicates a slight tendency towards
relative financial vulnerability across Europe, North America and Australia. The average Index score for the 14
countries of Europe stands at 31 points, similar to the average in 2009. Compared with this, the three North
American countries surveyed in 2010 scored favourably, averaging 10 points, with Australia scoring a similar 6
points on the Index. Individual country scores varied considerably, more than in any previous year, from 76 in
Greece to as low as -43 in Norway.
Genworth Index score for 18 European countries, 2010
At 76 points, relative financial vulnerability was highest in Greece in 2010. Greece had previously scored 52 in
2009, placing it as the third most vulnerable country of those surveyed at that time. Portugal and Poland also
scored highly on relative financial vulnerability in 2010, with 66 and 65 points respectively. This reflects an increase
in vulnerability of 21 points for Portugal, but only a marginal increase for Poland.5 Italy, along with Germany, moved
one place higher than in 2009, due to modest increases in relative vulnerability in these countries.
Compared with the other Southern European countries, Spain scored only 32 points on the Index. Although this
indicates a moderately high rate of relative vulnerability, this has barely changed since 2009. Ireland saw the most
improvement of any country, falling some 27 points to 36 points on the Genworth Index.
Turkey, France and Great Britain along with Index newcomer Mexico all scored very similarly on the Index, with
moderate levels of relative financial vulnerability of between 19 and 23 Index points. USA and Australia, also
introduced to the Index this year, fared better, with 8 and 6 points respectively.
As in previous years, the Nordic countries scored most favourably on the Index. All scored below zero, indicating
relative financial security, albeit only nominally so for Finland. Index newcomer Canada joined these countries with
a score of -4 points. Norway was the least vulnerable country, scoring -43 points on the Genworth Index. Norway
has in fact been rated as the most secure country in the last two editions of the Index.
19
10
31
-43
-27
-25
-4
-4
6
8
19
22
23
23
32
36
41
52
65
66
76
-80 -60 -40 -20 0 20 40 60 80
All 18 countries
3 North American countries
14 European countries
Norway
Denmark
Sweden
Canada (new to '10)
Finland
Australia (new to '10)
USA
Great Britain
France
Mexico (new to '10)
Turkey
Spain
Ireland
Germany
Italy
Poland
Portugal
Greece
Relative security Relative vulnerability
52
45
60
40
33
63
31
32
-
24
10
15
-
-7
-
-20
-25
-48
28
-
-
Score in 2009
6
DECONSTRUCTING THE GENWORTH INDEX
Examination of the component groups that are identified in the construction of the Genworth Index shows that the
average Index score of 19 points for the 18 countries surveyed is the result of many more households being
vulnerable financially, than secure. Some 24 per cent of households overall were vulnerable financially. In other
words, nearly a quarter were in considerable financial difficulty and did not expect their prospects to improve any
time soon. In contrast, only one in ten were financially secure.
Strivers were also a minority (16 per cent). Like the vulnerable households, these were also in a fair amount of
financial difficulty, but differed in the respect that they were optimistic about their situation improving in the next 12
months. Households that were circumspect – not in difficulty but equally not expecting their circumstances to
improve – made up the largest of all four groups, representing 50 per cent of the population.
As the country reports show, the proportions falling into each of the segments varied considerably from this
average for individual countries. As we might expect, a considerable majority of households in Greece were
vulnerable (65 per cent) as were a half of households in Portugal (51 per cent). Around a third of households were
vulnerable in Poland, Italy, Spain and Turkey. Approaching one in five households in Norway, Sweden and
Denmark were secure, and despite their middle-ranking positions both Turkey and Mexico had relatively high
proportions of secure households (12 and 10 per cent respectively). The biggest groups of strivers were found in
Turkey (31 per cent) and Mexico (28 per cent). These results are summarised in Appendix Table A.1.
Percentage of households in each group, 2010
Compared with the overall picture, the distribution of households across these four groups differed somewhat for
the European and North American averages. The higher Index score of 31 points for the 14 European countries
surveyed is explained by a slightly higher proportion of vulnerable households there (27 per cent) than in the North
American countries (21 per cent), as well as a slightly lower percentage of secure households (7 per cent and 13
per cent respectively).
Coupled with the lower proportion of strivers and a larger group of circumspect households in Europe than in North
America, this shows that Europeans were on average more likely to have experienced financial difficulty than the
North American households. However, the main driver of the differences between these European and North
American countries was a higher propensity for optimism among households in the North American countries.
The average sizes of the four groups defined in the construction of the Index have changed little for the European
countries since 2009, when all 14 were also included in the Index. Seven per cent of European households in both
2009 and 2010 were financially secure. And 11 per cent in 2009 and 12 per cent in 2010 were classed as strivers.
There has been a small movement of households on aggregate into the vulnerable group, from 24 per cent in 2009
to 27 per cent in 2010, and this is matched with a similarly small net movement out of the circumspect group (58
per cent in 2009 to 55 per cent in 2010).
24 2721
16 11 23
50 55 43
10 713
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
All 18 countries 14 European countries 3 North American countries
Secure
Circumspect
Strivers
Vulnerable
7
FOUR-YEAR TREND OF VULNERABILITY IN EUROPE
A subset of ten European countries, as listed on page 3, have been included in all four editions of the Genworth
Index. This provides an indication of the overall trend in levels of consumer financial vulnerability since summer
2007. Despite fluctuating year to year, the picture has been one of low to moderate levels of relative financial
vulnerability in all four years.
Genworth Index score, 10-country average, 2007 to 2010
For these ten original Index countries, relative financial vulnerability has ranged from a low of 7 points in 2007 to a
high of 31 in 2008. The score of 29 recorded in summer 2010 is almost twice as high as it was in 2009 (15 points). Percentage of households falling into each group, 10-country average, 2007 to 2010
The greater number of vulnerable households in 2010 (25 per cent) compared with 2009 (20 per cent) largely
explains the most recent increase in the Index score. Meanwhile, there is both a larger proportion of vulnerable and
a smaller proportion of secure households in 2010 compared with the 2007 baseline year that explains the fairly
considerable differences in Index scores between these two years.
Underlying this is a moderate increase in the numbers of households who had experienced financial difficulties at
least sometimes, from 42 per cent in 2007 to 52 per cent in 2010, combined with a near-doubling of households
who were pessimistic about their future financial situation (from 14 per cent to 26 per cent; see Table A.2).
Looking ahead, it is reasonable to expect relative financial vulnerability to remain moderately high in 2011. In
particular, while widespread fears exist of a double-dip recession it seems unlikely that the number of financially
secure households will return to 2007 levels. The spending cuts planned or already in train in many countries
across Europe – from Greece to Germany to Ireland – will add to these concerns and are likely to exacerbate the
experience of financial difficulties of households in real terms.
29
15
31
7
-80 -60 -40 -20 0 20 40 60 80
2010
2009
2008
2007
Relative security Relative vulnerability
1528
20 25
11
810
9
63
5863 59
11 6 7 6
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2007 2008 2009 2010
Secure
Circumspect
Strivers
Vulnerable
8
GREECE
Of all 18 countries surveyed for this fourth edition, Greece has the highest level of relative financial vulnerability on
the 2010 Genworth Index. Its score of 76, some 24 points higher than in 2009, is among the highest scores
recorded since the Index began in 2007. Vital statistics, Greece
Percentage (%) in each group
Financially vulnerable
Strivers Circumspect Financially
secure Position (of total)
2007 - - - - -
2008 - - - - -
2009 45 15 36 4 3rd
(15)
2010 65 5 28 2 1st (18)
The 2010 Index score for Greece stands at 76 in summer 2010, a fairly substantial increase from 52 in 2009.
This moves Greece above Poland to replace Ireland as the most financially vulnerable country in 2010.
The number of households falling into the financially vulnerable group increased from 45 per cent in 2009 to
65 per cent in 2010; unsurprisingly, this is the largest proportion of vulnerable households of any country.
The sizes of the secure, circumspect and strivers groups have all fallen substantially since 2009, indicating a
net movement of households from these into the financially vulnerable group.
Only 2 per cent of households were secure in 2010, and only a further 28 per cent were circumspect.
These dramatic changes are largely explained by the increase in the number of households who thought their
own financial situation would get worse. This rose from 33 per cent in 2009 to 69 per cent in 2010.
Nonetheless, some 45 per cent of households reported constant or near-constant difficulty at the time they
were interviewed, with a further 37 per cent sometimes experiencing difficulties (see Table A.2).
52
76
-80
-60
-40
-20
0
20
40
60
80
2007 2008 2009 2010
Index s
core
9
PORTUGAL
Portugal's Index score of 66 in 2010 moves it two places to become the 2nd
most vulnerable country on the
Genworth Index. Despite showing signs of improvement in 2009, Portugal now has similarly high levels of relative
consumer vulnerability to those observed in 2008 when it was the most vulnerable country surveyed.
Vital statistics, Portugal
Percentage (%) in each group
Financially vulnerable
Strivers Circumspect Financially
secure Position (of total)
2007 32 5 56 7 2nd
(10)
2008 61 5 31 2 1st (12)
2009 39 8 48 5 4th
(15)
2010 51 9 38 3 2nd
(18)
At 66 points, Portugal's Index score has risen substantially since 2009.
Portugal's position in 2010 is 2nd
on the Index, with only Greece placed higher out of all 18 countries.
Clearly, levels of financial vulnerability have increased dramatically here since the baseline year, when
Portugal had an Index score of 34, although this pattern is typical of the average.
The sizes of the Index groups have also changed dramatically, with 51 per cent of Portuguese households
now classed as financially vulnerable, from 32 per cent in 2007 and 39 per cent in 2009.
As in Greece, the increase in Portugal's Index score since autumn 2009 can be explained by a shift in the
number of people who expected their household financial situation to get worse. Only 18 per cent thought this
would be the case in 2009, compared to 44 per cent in 2010.
Still, eight in ten households had ‘often’ or ‘always’ experienced financial difficulty (40 per cent) or had done
so ‘sometimes’ (41 per cent).
34
70
45
66
-80
-60
-40
-20
0
20
40
60
80
2007 2008 2009 2010
Index s
core
10
POLAND
Closely matching Portugal’s score of 66, Poland’s score of 65 points on the Genworth Index places it as the 3rd
most vulnerable country in 2010. This ranking represents an improvement of one position since 2009, due entirely
to the higher rates of deterioration experienced in Portugal and Greece.
Vital statistics, Poland
Percentage (%) in each group
Financially vulnerable
Strivers Circumspect Financially
secure Position (of total)
2007 - - - - -
2008 27 17 51 5 6th
(12)
2009 46 8 43 3 2nd
(15)
2010 36 11 51 2 3rd
(18)
Poland's Index score of 65 in 2010 reflects a marginal increase of 5 points from 2009.
Despite this, there has been some change in the relative composition of the groups defined by the Index.
While 36 per cent of households were financially vulnerable in 2010, 9 percentage points higher than in 2008
when Poland entered the Index, this has in fact dropped from 46 per cent in 2009.
The Index remains high, however, because so few households (2 per cent) were financially secure, from 3 per
cent in 2009 and 5 per cent in 2008.
Underpinning the changes in Poland is both declining optimism about households' future financial positions
since the baseline and an increase in the number reporting being in financial difficulty 'often or always'.
38
60 65
-80
-60
-40
-20
0
20
40
60
80
2007 2008 2009 2010
Ind
ex s
co
re
11
ITALY
Following some improvement in 2009, Italy has climbed both 12 points to 52 and one place on the Index. Still,
relative to other countries Italy’s position remains favourable compared with 2007, when it ranked as the most
vulnerable country.
Vital statistics, Italy
Percentage (%) in each group
Financially vulnerable
Strivers Circumspect Financially
secure Position (of total)
2007 29 7 59 5 1st (10)
2008 38 6 54 3 2nd
(12)
2009 25 8 63 4 5th
(15)
2010 36 6 55 3 4th
(18)
Italy's Index score in 2010 stands at 52, which reflects an increase of 12 points since 2009 and is approaching
its 2008 score of 58 points.
This ranks Italy as the 4th
most vulnerable country on the 2010 Index, out of the 18 countries surveyed.
Like many countries, Italy's Index score of 52 is rather higher than it was in the baseline year when it was 39.
The change in score since 2009 is mainly attributed to the substantial increase in the proportion of
households classed as financially vulnerable.
In turn, this is because many more Italian households had experienced financial difficulties 'often or always' in
2010 (25 per cent) compared with the previous year (19 per cent).
39
58
4052
-80
-60
-40
-20
0
20
40
60
80
2007 2008 2009 2010
Ind
ex s
co
re
12
GERMANY
Germany's situation on the Genworth Index worsened in 2010, due to an increase in the number of households
that were financially vulnerable. This takes the Index score from 33 points in 2009 to 41 in 2010, and due to
Ireland’s considerable improvement, places it as the 5th
most vulnerable country in 2010.
Vital statistics, Germany
Percentage (%) in each group
Financially vulnerable
Strivers Circumspect Financially
secure Position (of total)
2007 15 7 71 7 3rd
(10)
2008 29 5 63 3 4th
(12)
2009 19 5 72 4 6th
(15)
2010 25 5 66 4 5th
(18)
Germany's Index score for 2010 is 41, a rise of 8 points from 2009 which places it 5th
on the Index.
Looking across the groups that are defined by the Genworth Index, the change in the score since 2009 is
explained by a net movement of households from the circumspect to the vulnerable. These groups decreased
and increased in size, respectively, by some 6 percentage points.
The number of German households in the financially vulnerable group has increased substantially over time,
from 15 per cent in the baseline year of 2007 to 25 per cent in 2010.
Meanwhile, the number of financially secure households remains lower than in the baseline year.
The moderate rise in Germany’s Index score since autumn 2009 can be attributed at least in part to the
increase in the number of people who expect the future financial position of their household to get worse, from
16 per cent to 27 per cent.
16
49
3341
-80
-60
-40
-20
0
20
40
60
80
2007 2008 2009 2010
Ind
ex s
co
re
13
IRELAND
After topping the Index as the most financially vulnerable country in 2009, Ireland's score has dropped significantly
to 36 points and improved five positions on the ranking. However it is still placed firmly among the subset of
countries that are deemed financially vulnerable, in contrast to relative financial security back in 2007.
Vital statistics, Ireland
Percentage (%) in each group
Financially vulnerable
Strivers Circumspect Financially
secure Position (of total)
2007 8 9 66 17 6th
(10)
2008 34 4 58 3 3rd
(12)
2009 39 2 57 2 1st (15)
2010 25 6 64 5 6th
(18)
Ireland's Index score for 2010 is 36, a considerable improvement of 27 points from 2009.
Ireland's position on the 2010 Index stands at 6th
, out of all 18 countries surveyed, also a considerable
recovery of five places compared with 2009.
This is the result of a net movement of households from the vulnerable to all other groups.
Although Ireland's score has improved, still only 5 per cent of households were in the financially secure group,
compared to 17 per cent in the baseline year.
Similarly, while the percentage of financially vulnerable households has fallen since 2009, overall the figure
has increased from 8 per cent in 2007 to 25 per cent in 2010.
In contrast to all of the countries ranking more highly on the Index, the change in Ireland is explained by
increased optimism among householders since 2009 (from 4 per cent to 11 per cent) and a substantial
decrease in those who expected their financial position to get worse (from 45 per cent to 28 per cent).
-16
51
63
36
-80
-60
-40
-20
0
20
40
60
80
2007 2008 2009 2010
Ind
ex s
co
re
14
SPAIN
Compared with its Southern European neighbours, Spain’s 2010 Index score of 32 points has remained remarkably
similar to its score of 31 points in autumn 2009. It also remains a middle-ranking country in this edition with an
Index score that is typical of the European average.
Vital statistics, Spain
Percentage (%) in each group
Financially vulnerable
Strivers Circumspect Financially
secure Position (of total)
2007 17 8 67 8 4th
(10)
2008 37 6 52 4 5th
(12)
2009 27 9 58 6 8th
(15)
2010 32 8 53 7 7th
(18)
Spain's Index score for 2010 is 32, reflecting no real change from its score of 31 points in 2009.
This places Spain as 7th on the Index, out of all 18 countries surveyed, representing a rise of one place from
2009 due to Turkey’s modest improvement since last year.
Levels of financial vulnerability are still much higher than they were in the baseline year, when the Index score
was 15.
The shares of the four groups have remained fairly similar to 2009, though there has been a shift since the
baseline year from the circumspect group to the financially vulnerable group.
The stability in Spain’s situation since 2009 is the result of no major change in patterns of response to either
Index question. However, there has been a subtle but significant shift (of around 7 percentage points) in
households’ expectations for their future, from expecting things to stay the same to expecting that their
situation will get worse, which may be an indication of future deterioration on the Index (see Table A.2).
15
47
31 32
-80
-60
-40
-20
0
20
40
60
80
2007 2008 2009 2010
Ind
ex s
co
re
15
TURKEY
Turkey's second year on the Index shows encouraging signs that levels of relative financial vulnerability are
decreasing there.
Vital statistics, Turkey
Percentage (%) in each group
Financially vulnerable
Strivers Circumspect Financially
secure Position (of total)
2007 - - - - -
2008 - - - - -
2009 38 26 28 9 7th
(15)
2010 34 31 23 12 8th
(18)
Turkey's Index score of 23 for 2010 is slightly above the average of 19 points for all 18 countries, but below
the average of 31 points for Europe.
Turkey has experienced a marginal but promising improvement of 9 points from a score of 32 in 2009.
Turkey's position on the 2010 Index is 8th
, one place better than in 2009.
As a nation it is fairly polarised, however. Compared with similarly scoring countries (Mexico, France and
Great Britain), Turkey has relatively high rates of both financial security (12 per cent) and financial
vulnerability (34 per cent).
The improved Index score is the combined result of a small decrease in the size of the financially vulnerable
group since 2009 and a similar-sized increase in the financially secure group. There has also been some
decrease and increase in the sizes of the circumspect and strivers groups respectively.
In turn, this is due to an increase in optimism, with 43 per cent of householders in 2010 expecting their
financial situation to improve in the coming months, from 37 per cent in 2009.
3223
-80
-60
-40
-20
0
20
40
60
80
2007 2008 2009 2010
Index s
core
16
MEXICO
This is Mexico's first appearance in the Genworth Index. With a score of 23, it is mid-table in the Index, ranking
better than countries including Spain, Germany and Ireland but worse than its North American neighbours.
Vital statistics, Mexico
Percentage (%) in each group
Financially vulnerable
Strivers Circumspect Financially
secure Position (of total)
2007 - - - - -
2008 - - - - -
2009 - - - - -
2010 28 28 34 10 9th
(18)
Mexico's debut Index score is 23, similar to the overall average of 19 points, but somewhat higher than the
average of 10 points for the three North American countries surveyed.
Mexico's position of 9th on the 2010 Index out of all 18 countries places it squarely mid-table.
While the numbers of Mexican households that were classed as financial vulnerable and secure are similar to
the all-country averages, Mexico has fewer circumspect and more striver households than the all-country
averages of 50 per cent and 16 per cent for these groups.
Mexico’s unusual profile is the combined effect of a relatively high proportion of households that had
experienced financial difficulties at least sometimes (79 per cent, compared with 56 per cent on average) and
that expected their household financial situation to get better (38 per cent, compared with 26 per cent).
23
-80
-60
-40
-20
0
20
40
60
80
2007 2008 2009 2010
Index s
core
17
FRANCE
France’s score on the Index is remarkable only for its consistency. The Index score of 22 remains relatively
unchanged from 24 in 2009 and 2007, and it is again mid-table on the Genworth Index.
Vital statistics, France
Percentage (%) in each group
Financially vulnerable
Strivers Circumspect Financially
secure Position (of total)
2007 16 19 53 12 5th
(10)
2008 22 16 55 7 7th
(12)
2009 21 17 56 7 9th
(15)
2010 19 17 57 7 10th
(18)
Frances's Index score for 2010 is 22, reflecting no real change from the score of 24 from 2009.
France places 10th
on the Index, out of all 18 countries surveyed. Again, this is equivalent to its ranking of 9th
in 2009, prior to the introduction of Mexico to the Index.
This overall lack of change for France since 2009 is played out for each of the four groups that the Genworth
Index defines, for which there have been only negligible changes in size.
Reflecting the situation for most countries included in every edition of the Index, levels of relative financial
vulnerability in France are still notably higher than in the baseline year, when France scored 7 on the Index.
7
24 24 22
-80
-60
-40
-20
0
20
40
60
80
2007 2008 2009 2010
Ind
ex s
co
re
18
GREAT BRITAIN
Despite remaining mid-table on the Genworth Index, Great Britain is one of the countries in which relative
vulnerability showed signs of getting worse in 2010.
Vital statistics, Great Britain
Percentage (%) in each group
Financially vulnerable
Strivers Circumspect Financially
secure Position (of total)
2007 7 12 64 17 7th
(10)
2008 22 8 62 8 8th
(12)
2009 14 15 62 9 10th
(15)
2010 20 9 63 8 11th
(18)
Great Britain's Index score in 2010 is 19, a marginal increase in relative vulnerability of 9 points from 2009.
It nonetheless ranks 11th
on the Index in 2010, with an Index score that is lower than the average for 14
European counties surveyed and similar to the 18-country average.
The apparent deterioration in Britain’s Index score is the result of a reversal of the situation in 2009, when we
observed a net movement of households from the financially vulnerable to the strivers group.
The number of households classed as vulnerable increased significantly between 2009 and 2010 to 20 per
cent, due primarily to an increase in pessimism about the future. Britain’s Index score would have been worse
had the number of secure households not held so steady.
Looking back at longer-term change, Great Britain’s Index score is some 39 points higher in 2010 than at the
baseline in 2007. The percentage of households classed as financially vulnerable has almost trebled, while
the financially secure group has halved.
-19
23
1019
-80
-60
-40
-20
0
20
40
60
80
2007 2008 2009 2010
Ind
ex s
co
re
19
USA
In the USA's second year on the Index, there are encouraging signs of a decrease in levels of relative financial
vulnerability.
Vital statistics, USA
Percentage (%) in each group
Financially vulnerable
Strivers Circumspect Financially
secure Position (of total)
2007 - - - - -
2008 - - - - -
2009 20 20 49 10 -
2010 20 22 45 14 12th
(18)
The USA's Genworth Index score is 8 points for 2010, a negligible improvement of 6 points since 2009.
Although tipped just towards relative financial vulnerability, this is better than the all-country average of 19
points.
The USA's position on the 2010 Index is 12th
, with only the Nordic countries, Canada, and Australia
performing better.
A small shift from the circumspect group to the financially secure group since 2009 accounts for the improved
Index score. Otherwise there has been little overall change in the relative size of the four Index groups,
The apparent improvement in the Index score for the USA is due to the number of people reporting that they
never experience financial difficulties. This has increased from 14 per cent of US households in 2009 to 20
per cent in 2010.
148
-80
-60
-40
-20
0
20
40
60
80
2007 2008 2009 2010
Index s
core
20
AUSTRALIA
One of the new countries to the Index, Australia has fared well with only Canada and the Nordic countries scoring
better. Still, at 6 points, the balance in Australia is tipped just towards relative financial vulnerability.
Vital statistics, Australia
Percentage (%) in each group
Financially vulnerable
Strivers Circumspect Financially
secure Position (of total)
2007 - - - - -
2008 - - - - -
2009 - - - - -
2010 21 12 51 16 13th
(18)
Australia is placed 13th
on the Genworth Index of Consumer Vulnerability, out of all 18 countries surveyed.
At 6 points Australia's score for 2010 is considerably lower than the overall average Index score of 19.
This score, which is close to zero, indicates a balance in Australia between vulnerable and secure
households, albeit tipped slightly towards vulnerability.
Compared with the average of 10 per cent in 2010, Australia had a larger share of financial secure
households, with 16 per cent of households falling into this category.
6
-80
-60
-40
-20
0
20
40
60
80
2007 2008 2009 2010
Index s
core
21
FINLAND
For the third consecutive year Finland remains relatively financially secure, again registering a score of just below
zero on the Index.
Vital statistics, Finland
Percentage (%) in each group
Financially vulnerable
Strivers Circumspect Financially
secure Position (of total)
2007 - - - - -
2008 8 13 69 10 9th
(12)
2009 8 14 66 11 12th
(15)
2010 10 16 62 12 14th
(18)
Finland has recorded an Index score of -4 for 2010, very slightly tipped towards relative financial security.
Levels of financial security here have remained extremely stable over the three years that Finland has been
included on the Index.
Finland comes a very favourable 14th
on the Index, out of all 18 countries surveyed.
The size of each of the four groups has changed relatively little since 2009, though there seems to have been
a small shift from the circumspect group to all other groups.
The increase in the size of the financially vulnerable group since Finland’s first Index year in 2008 is partly
explained by an increase of people reporting that they often or always experience financial difficulties.
-5 -7 -4
-80
-60
-40
-20
0
20
40
60
80
2007 2008 2009 2010
Ind
ex s
co
re
22
CANADA
Canada is another of the countries added to the Genworth Index in 2010. Matching Finland, it also scored -4. Only
three countries, all of them Nordic, recorded higher levels of financial security.
Vital statistics, Canada
Percentage (%) in each group
Financially vulnerable
Strivers Circumspect Financially
secure Position (of total)
2007 - - - - -
2008 - - - - -
2009 - - - - -
2010 13 21 51 15 15th
(18)
Canada's Index score for 2010 is -4, compared to an overall average Index score of 19.
Canada comes 15th on the Index, out of all 18 countries surveyed.
Only 13 per cent of the Canadian households were financially vulnerable, compared to an overall average of
24 per cent. This is mirrored by the findings that more households in Canada were financially secure (15 per
cent) than for all 18 Index countries as a whole (10 per cent).
Canada’s score and position reflect that both the experience of constant financial difficulties was lower and
levels of optimism for the future were higher than for the picture overall (Table A.1).
-4
-80
-60
-40
-20
0
20
40
60
80
2007 2008 2009 2010
Index s
core
23
SWEDEN
Sweden again places near the bottom of the Index. Despite encouraging signs of improvement year on year since
2008, Sweden’s current score of -25 is still some distance from its auspicious baseline of -46.
Vital statistics, Sweden
Percentage (%) in each group
Financially vulnerable
Strivers Circumspect Financially
secure Position (of total)
2007 3 8 61 28 10th
(10)
2008 7 7 72 14 10th
(12)
2009 7 7 68 19 13th
(15)
2010 6 10 67 18 16th
(18)
Sweden's position on the 2010 Index is 16th
, out of all 18 countries surveyed.
Sweden's Index score in 2010 is -25, a marginal improvement of 5 points from 2009.
Still, levels of financial security here were not as widespread in summer 2010 as they were in the baseline
year when Sweden scored -46 (and was placed as the country with the highest levels of relative financial
security).
The percentage of Swedish households in the financially vulnerable group has doubled (from 3 per cent to 6
per cent) since the baseline year.
Sweden's improved Index score can be partly attributed to fewer households expecting their financial situation
to get worse. 18 per cent of householders in 2009 said they thought things would get worse, but this has
fallen to just 10 per cent, reflecting baseline levels.
-46
-14-20
-25
-80
-60
-40
-20
0
20
40
60
80
2007 2008 2009 2010
Ind
ex s
co
re
24
DENMARK For the fourth year running Denmark remains relatively financially secure, second only to Norway with a score of
-27 points on the Index.
Vital statistics, Denmark
Percentage (%) in each group
Financially vulnerable
Strivers Circumspect Financially
secure Position (of total)
2007 4 9 64 22 8th
(10)
2008 5 10 68 18 12th
(12)
2009 6 8 69 18 14th
(15)
2010 5 8 70 17 17th
(18)
Denmark places 17th
on the Index, out of all 18 countries surveyed.
Denmark's Index score of -27 for 2010 reflects no real change from the score of -25 from 2009.
The relative size of each of the four groups has also not changed since 2009.
Despite this, significantly more households had never experienced financial difficulties around the time they
were interviewed in 2010 (54 per cent) than in 2009 (46 per cent; Table A.2). In 2010, some 39 per cent of
householders alone reported that they never experienced financial difficulties and did not expect to do so in
the next 12 months.
Still, levels of financial security here are not as widespread as they were in the baseline year when Denmark
scored -37.
-37-28 -25 -27
-80
-60
-40
-20
0
20
40
60
80
2007 2008 2009 2010
Ind
ex s
co
re
25
NORWAY
Norway is once again the best-performing country on the Genworth Index of Consumer Vulnerability. With a score
of -43, only 3 per cent of Norwegian households were vulnerable financially, while some 19 per cent were secure.
Vital statistics, Norway
Percentage (%) in each group
Financially vulnerable
Strivers Circumspect Financially
secure Position (of total)
2007 4 8 60 27 9th
(10)
2008 7 6 67 20 11th
(12)
2009 2 8 71 19 15th
(15)
2010 3 7 72 19 18th
(18)
For the second year running Norway is recorded as the most financially secure country on the Index.
Norway's Index score is -43, similar to 2009. Despite a negligible increase of 5 points on the Index since
2009, Norway's score is again substantially lower than any other country.
Levels of financial security in Norway are very similar to the 2007 baseline levels, the only country where this
is the case.
Looking back across the years there has been a net movement of households from the financially secure to
the circumspect. However, the number of vulnerable households has decreased, particularly since 2008.
Norway is particularly notable, because no householders in the 2010 sample reported that they had
experienced financial often or always and expected their household’s general financial situation to get worse.
-41
-24
-48-43
-80
-60
-40
-20
0
20
40
60
80
2007 2008 2009 2010
Ind
ex s
co
re
26
ENDNOTES
1. See http://www.mabs.ie/publications/media_resources/MABS_Pre_Budget_%20Sub_2010.pdf.
2. The survey is managed by Ipsos MORI. Results are weighted to be representative nationally (and cross-
nationally, where averages across multiple countries are reported).
3. The reports from this baseline study can be found at:
http://www.genworth.co.uk/content/genworth/uk/en/About_Us/research/The_Genworth_Index.html
4. The ratio is rescaled by taking the Log10 of the ratio and multiplying the resulting value by 50.
5. A change or difference that is described as ‘marginal’ or ‘negligible’ is unlikely to be statistically significant.
APPENDICES
T A B L E A . 1 O V E R V I E W O F T H E 2 0 1 0 G E N W O R T H I N D E X R E S U L T S B Y C O U N T R Y
Percentage in each group (row %)
Country (listed by Index score)
Financially vulnerable Strivers Circumspect
Financially secure
Index score
Greece 65 5 28 2 76
Portugal 51 9 38 3 66
Poland 36 11 51 2 65
Italy 36 6 55 3 52
Germany 25 5 66 4 41
Ireland 25 6 64 5 36
Spain 32 8 53 7 32
Turkey 34 31 23 12 23
Mexico 28 28 34 10 23
France 19 17 57 7 22
Great Britain 20 9 63 8 19
USA 20 22 45 14 8
Australia 21 12 51 16 6
Finland 10 16 62 12 -4
Canada 13 21 51 15 -4
Sweden 6 10 67 18 -25
Denmark 5 8 70 17 -27
Norway 3 7 72 19 -43
18 countries 24 16 50 10 19
27
T A B L E A . 2 R E S P O N S E S T O T H E I N D E X Q U E S T I O N S
Country (listed alphabetically) Column percentages (%)
2007 2008 2009 2010
Australia Frequency of experiencing financial difficulties
Often or always - - - 21
Sometimes - - - 27
Hardly ever - - - 30
Never - - - 23
Expectations for future financial position
Improve - - - 28
Stay the same - - - 53
Get worse - - - 19
Unweighted base - - - 980
Canada Frequency of financial difficulties
Often or always - - - 15
Sometimes - - - 31
Hardly ever - - - 30
Never - - - 23
Expectations for future financial position
Improve - - - 36
Stay the same - - - 53
Get worse - - - 10
Unweighted base - - - 848
Denmark Frequency of experiencing financial difficulties
Often or always 6 7 6 4
Sometimes 14 17 16 15
Hardly ever 26 33 32 26
Never 54 44 46 54
Expectations for future financial position
Improve 32 27 26 25
Stay the same 59 61 67 66
Get worse 9 11 7 10
Unweighted base 899 882 859 845
Finland Frequency of experiencing financial difficulties
Often or always - 11 10 14
Sometimes - 33 27 27
Hardly ever - 35 32 32
Never - 22 30 27
Expectations for future financial position
Improve - 23 25 28
Stay the same - 70 65 65
Get worse - 7 10 7
Unweighted base - 983 972 981
France Frequency of experiencing financial difficulties
Often or always 20 20 21 21
Sometimes 31 32 31 28
Hardly ever 23 24 23 22
Never 26 24 25 28
Expectations for future financial position
Improve 31 23 23 24
Stay the same 56 50 58 56
Get worse 13 27 19 20
Unweighted base 802 901 872 903
Germany Frequency of experiencing financial difficulties
Often or always 12 20 15 15
Sometimes 26 35 28 33
Hardly ever 32 32 39 35
Never 29 13 17 17
Expectations for future financial position
Improve 14 8 9 8
Stay the same 71 63 75 65
Get worse 14 28 16 27
Unweighted base 626 648 709 652
Great Britain Frequency of experiencing financial difficulties
Often or always 10 13 16 12
Sometimes 21 30 33 31
Hardly ever 23 25 30 27
Never 47 32 22 30
Expectations for future financial position
Improve 29 15 24 17
Stay the same 65 49 62 53
Get worse 6 36 13 30
Unweighted base 658 749 705 770
28
Table A.2 continued 2007 2008 2009 2010
Greece Frequency of experiencing financial difficulties
Often or always - - 40 45
Sometimes - - 40 37
Hardly ever - - 11 12
Never - - 9 6
Expectations for future financial position
Improve - - 19 7
Stay the same - - 48 24
Get worse - - 33 69
Unweighted base - - 694 691
Ireland Frequency of experiencing financial difficulties
Often or always 8 15 15 17
Sometimes 24 42 42 39
Hardly ever 21 24 26 26
Never 46 19 17 18
Expectations for future financial position
Improve 26 8 4 11
Stay the same 64 54 51 62
Get worse 10 39 45 28
Unweighted base 695 683 747 735
Italy Frequency of experiencing financial difficulties
Often or always 19 22 17 25
Sometimes 40 49 46 42
Hardly ever 20 19 21 20
Never 20 10 16 13
Expectations for future financial position
Improve 12 9 12 9
Stay the same 62 56 68 61
Get worse 26 35 20 29
Unweighted base 455 617 616 621
Mexico Frequency of experiencing financial difficulties
Often or always - - - 31
Sometimes - - - 48
Hardly ever - - - 13
Never - - - 8
Expectations for future financial position
Improve - - - 38
Stay the same - - - 46
Get worse - - - 16
Unweighted base - - - 718
Norway Frequency of experiencing financial difficulties
Often or always 5 5 3 3
Sometimes 14 13 14 13
Hardly ever 24 31 31 33
Never 57 50 52 50
Expectations for future financial position
Improve 35 27 27 25
Stay the same 59 61 68 66
Get worse 6 12 4 8
Unweighted base 773 835 851 866
Poland Frequency of experiencing financial difficulties
Often or always - 26 38 31
Sometimes - 52 48 52
Hardly ever - 16 11 12
Never - 6 2 5
Expectations for future financial position
Improve - 22 11 13
Stay the same - 62 63 66
Get worse - 16 27 21
Unweighted base - 488 584 550
Portugal Frequency of experiencing financial difficulties
Often or always 20 46 37 40
Sometimes 40 43 43 41
Hardly ever 23 9 13 13
Never 17 2 6 5
Expectations for future financial position
Improve 12 8 13 11
Stay the same 60 37 69 45
Get worse 29 55 18 44
Unweighted base 671 760 545 793
29
Table A.2 continued 2007 2008 2009 2010
Spain Frequency of experiencing financial difficulties
Often or always 15 26 25 26
Sometimes 27 31 31 33
Hardly ever 24 18 17 17
Never 35 25 27 23
Expectations for future financial position
Improve 16 11 15 15
Stay the same 70 53 64 57
Get worse 14 36 21 28
Unweighted base 538 674 618 609
Sweden Frequency of experiencing financial difficulties
Often or always 5 7 6 7
Sometimes 12 15 13 17
Hardly ever 24 31 34 30
Never 58 46 47 46
Expectations for future financial position
Improve 36 21 25 28
Stay the same 54 60 57 62
Get worse 10 19 18 10
Unweighted base 731 816 851 842
Turkey Frequency of experiencing financial difficulties
Often or always - - 37 36
Sometimes - - 41 42
Hardly ever - - 16 15
Never - - 5 7
Expectations for future financial position
Improve - - 34 43
Stay the same - - 38 33
Get worse - - 28 24
Unweighted base - - 542 547
USA Frequency of experiencing financial difficulties
Often or always - - 24 25
Sometimes - - 35 30
Hardly ever - - 27 26
Never - - 14 20
Expectations for future financial position
Improve - - 31 35
Stay the same - - 55 53
Get worse - - 15 12
Unweighted base - - 770 801
Average of 10 European countries
Frequency of experiencing financial difficulties
Often or always 14 20 18 19 Sometimes 27 34 33 33 Hardly ever 25 24 27 25 Never 33 21 22 24 Expectations for future
financial position Improve 22 14 17 16
Stay the same 64 54 65 59 Get worse 14 32 18 26 Unweighted base 6,848 7,565 7,373 7,636 Average for all 18 countries
Frequency of experiencing financial difficulties
Often or always - - - 23
Sometimes - - - 33
Hardly ever - - - 24
Never - - - 20
Expectations for future financial position
Improve - - - 26
Stay the same - - - 55
Get worse - - - 20
Unweighted base - - - 13,752
Percentages are based on weighted data. Base excludes don't knows and refusals and is limited to those who answered both Index questions.
30
ABOUT GENWORTH FINANCIAL Genworth is a leading financial security company meeting the retirement, lifestyle protection, investment and
mortgage insurance needs of more than 15 million customers across more than 25 countries. For more information,
visit www.genworth.com
In Europe, Genworth focuses on Lifestyle Protection and Mortgage Insurance, working with banks, brokers,
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31
OUR RESEARCH PARTNERS P E R S O N A L F I N A N C E R E S E A R C H C E N T R E
The preparatory work that informed the development of the Genworth Index and the final Index design was
undertaken by Andrea Finney. Andrea is a Research Fellow in the Personal Finance Research Centre (PFRC), an
independent research centre based at the University of Bristol which specialises in social policy research across all
areas of personal finance, mainly from the consumer’s perspective.
Andrea joined PFRC in January 2007 having previously worked on the Wealth and Assets Survey at the Office for
National Statistics, and at the Home Office where she focused mainly on national crime surveys and studies of
alcohol-related crime. Andrea has particular expertise in the design and multivariate analysis of complex surveys
and their application to promoting understanding of patterns of saving, borrowing and over-indebtedness. She is
co-author of a report to the European Commission on the nature and causes of over-indebtedness, has undertaken
a review of the evidence on saving among lower-income households and, more recently, has prepared the report
on the results of the interim evaluation of the Child Trust Fund for HM Revenue & Customs.
The Personal Finance Research Centre at the University of Bristol in the UK has a national and international
reputation for policy-focused research encompassing all areas of personal finance, inlcuding over-indebtedness
and debt advice, financial capability and financial inclusion. PFRC has considerable expertise in designing,
undertaking and analysing both large-scale quantitative and in-depth qualitative research, with a particular
emphasis on methodological studies and Index construction. It has conducted research for government
departments, trade associations, regulatory bodies, charities and the private sector. The work of the centre has
been influential in shaping policy, and several members of PFRC act as technical and policy advisers to
government departments and other organisations.
32
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