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COST OF LIVING

How disposable income is falling in Switzerland

Disposable income - the money left over after compulsory expenses like health insurance premiums and taxes - is declining in Switzerland.

Published: 20 November 2019 15:00 CET
How disposable income is falling in Switzerland
Photo: Depositphotos

Cost of living has become a major concern in Switzerland, with rising prices straining the budgets of many. The Swiss Federal Office of Statistics on Tuesday released the Household Budget Survey, which looks at household expenditure in a variety of areas. 

READ MORE: Everything you need to know about the cost of living in Switzerland

Annual household disposable income dropped from CHF7124 to CHF6984 – a decrease of two percent. Compulsory spending made up around 30 percent of gross average income. 

While this is an average figure across the country, the report also shows widespread differences between the wealthiest and the poorest Swiss. 

READ: The cost of parenting in Switzerland and how to save money

Couples with children average CHF9787 per month, while the corresponding monthly amount is CHF3417 for people over 65. 

The survey took into account responses from across Switzerland on figures from 2017. 

Where does the money come from?

All in all, the average Swiss household brings in CHF9917 per month. Of that, on average around 75 percent comes from work income, with another 20 percent coming from pensions and other social security payments. 

Approximately five percent comes from money made off investments, while the final 1.5 percent comes from spousal payments such as alimony/child support. 

Where does the money go?

The majority of the disposable income in Switzerland goes towards housing and energy, with CHF1463 (20 percent) spent in that area.

Other common areas of expenditure are on transport CHF742, 636 on food and drinks, and leisure costing CHF577. 

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Of the 30 percent of expenditure that goes towards compulsory costs, around 12 percent goes towards taxes, followed by 10 percent to social security and 6.5 percent to health insurance. 

Finally, Swiss households on average save around CHF1428 per month. 

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ENERGY

EXPLAINED: How high will heating bills be this winter in Germany?

The cost of energy is expected to rise again this coming winter, even though the government's price cap is supposed to be in effect until April 2024. Here's what households can expect.

Published: 31 October 2023 10:31 CET
Updated: 5 November 2023 22:45 CET
EXPLAINED: How high will heating bills be this winter in Germany?

The onset of winter will raise concerns for many in Germany about the cost of heating their homes, with memories of last year’s rocketing prices and concerns over domestic gas supply resurfacing. 

But, compared to last year, the energy prices have now largely stabilised, though they are still higher than in 2021.

The stabilisation in prices is partly thanks to the government’s energy price cap which came into force earlier this year to cushion the blow of soaring energy prices by capping electricity costs at 40 cents per kilowatt-hour and natural gas at 12 cents.

READ ALSO: Germany looks to extend energy price cap until April 2024

The federal government plans to maintain this cap until the end of April, though this could be extended even longer, if necessary. 

How high are heating costs expected to go this year?

For the current year, experts from co2online expect somewhat lower heating costs than last year.

Heating with gas, for example, is expected to be 11 percent cheaper in 2023 than in 2022, costing €1,310 per year for a flat of 70 square metres. 

The cost of heating with wood pellets will drop by 17 percent to €870 per year, and heating with heating oil will cost 19 percent less and amount to €1,130.

According to co2online, the costs for heating with a heat pump will drop the most – by 20 percent to €1,1105. The reason for this, according to co2online, is a wider range of heat pump electricity tariffs.

Tax hikes in January

Starting January next year, the government will raise the value-added tax on natural gas from seven to nineteen percent.

Alongside this, the CO2 price, applicable when refuelling and heating, will also increase.

According to energy expert Thomas Engelke from the Federal Consumer Association, these increases will mean that a small single-family household with three or four people that heats with gas would then pay about €240 more per year for gas.

“That’s a lot”, he said. 

Another additional cost factor to consider is that network operators also want to raise prices. However, the federal government plans to allocate €5.5 billion to cushion this increase for consumers as much as possible, so how such cost increases will ultimately affect consumers is currently hard to estimate.

READ ALSO: Why people in Germany are being advised to switch energy suppliers

Overall, it can be said that, from January, consumers will have to brace themselves for higher energy costs, even though massive increases are currently not expected.

Consumer advocate Engelke advised customers to closely examine where potential savings could be made this upcoming winter: “Those who are now signing a new gas or electricity contract should inform themselves and possibly switch. Currently, you can save a few hundred euros. It’s worth it. On the other hand, you should also try to save as much energy as possible this winter.”

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