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Inflation Study by N26 and ifo Institute Shows: Women Navigated the Cost-of-Living Crisis Most Effectively, Older Consumers Remain Under Financial Pressure

  • Analysis of real long-term transaction data reveals: Nearly all consumer groups experienced significant financial strain up to 2023. However, responses to inflation varied considerably.
  • Reactions to rising costs and income developments differed clearly by gender, age group, and region.
  • Despite a noticeable easing of financial pressure since 2024, the effects of inflation are expected to persist—particularly among lower-income households.
18 June 2025, Berlin - N26, Europe’s leading digital bank, along with the ifo Institute and the Technical University of Munich today published a joint research report that uses granular data for the first time to examine how the cost-of-living crisis has affected the financial standing of consumers in Germany. For this purpose, anonymized and aggregated data from 20,000 randomly selected customers between January 2021 and December 2024 was analyzed. The study provides detailed insights into income and spending patterns during a period of unprecedented economic challenges for many consumers. Results: Women, young consumers and residents of metropolitan areas managed the cost-of-living crisis best Overall, consumers mastered the phase of high inflation well: Almost all consumer groups experienced a stronger rise of average variable consumer spending (23.8 percent) than income between 2021 and 2023 (20.3 percent). To cover additional costs, consumers resorted to reserves and overdrafts, the savings rate declined. In 2024, a correction finally took place as income growth began to outpace variable consumption levels at last, leading to a moderate recovery in purchasing power. Gender gap: Women were coping with the effects of inflation more effectively than men. Between 2021 and 2024, men’s income increased by 27.4 percent on average, while women’s salaries grew by just 24.4 percent in comparison. Although they also experienced higher increases in everyday expenses, they remained below the overall spending level of men and used overdraft facilities 34.2 percent less often. This suggests a more stable financial situation despite lower incomes, which could be due to a more conscious handling of their finances. Notable differences between age groups: Younger consumers saw the highest salary growth but also the largest spending increases. With an average salary increase of 41.8 percent between 2021 and 2024, 20 to 29 year olds experienced the strongest salary growth among all investigated groups. At the same time, their variable expenses as measured by debit card payments as well as fixed costs for housing also increased the most. Consumers between the ages of 50 and 60, in contrast, experienced the slowest income growth: their salaries increased only moderately by 15.7 percent. At the same time, their costs for housing, variable expenses as well as the use of overdraft facilities rose steadily, suggesting less flexibility to adjust consumption and fixed costs. Place of residence matters, too: Consumers in metropolitan areas overcame financial pressure sooner. While both expenses and salaries increased similarly in and outside urban areas, the continued elevated use of overdraft facilities among consumers outside major cities indicates a more persistent financial strain as a result of inflation. By 2024, overdraft usage among consumers in metropolitan regions was 35.6% lower than in other areas. Over the course of the research period, increasing financial stabilization is evident across all income groups – driven by rising incomes, but also by proactive behavior. For example, many consumers with relatively high variable spending were regularly using their overdrafts at the beginning of the inflationary spike in order to cover their expenses; however, they were able to significantly reduce their use by 2024, despite continued rising costs. This suggests that they consciously adjusted their spending, for example, with the help of financial education and/or by using financial tools such as the N26 income sorter. Nevertheless, it should be noted that spending levels remain high and overdrafts are also being used more frequently, indicating ongoing limited financial flexibility on the part of many consumers.
Sebastian Wichert, Head of the LMU-ifo Economics & Business Data Center: “Despite a recovery, older people and consumers with high rent burdens in particular remain under financial pressure. A moderate increase in housing costs, support in building savings, and access to cheaper loans are necessary to strengthen the financial resilience of consumers.”
Transaction data as a reflection of social development For their analysis, N26, the ifo Institute and the Technical University of Munich used previously fully anonymized bank data and examined payment flows, incoming payments, and weekly account balances in conjunction with sociodemographic characteristics such as age group, gender, salary groups, and region of residence. The analysis was based on 20,000 complete data sets, which provide a detailed, behavior-based perspective on income, spending, and the use of overdrafts among consumers over a period of four years. In contrast to traditional surveys, which often rely on smaller samples and self-reports and are conducted irregularly or at long intervals, this approach provides a continuous, data-based picture of real financial behavior in everday economic life.
Daniel Lappas, VP Business at N26: “As a data-driven bank we consider it our responsibility to understand macroeconomic developments and be aware of the ways these impact our customers. Our collaboration with the ifo Institute and the Technical University of Munich provides insights on this that are relevant to the general public, giving the opportunity to better understand the impacts on consumers’ financial health in Germany today.”
ifo x N26: a data-based collaboration with foresight The study published today is the result of a long-term collaboration between N26 and the ifo Institute. It follows on from ifo‑N26‑Wirtschaftsmonitor, a Europe-wide study of private consumption behavior in the wake of the COVID-19 pandemic, published in 2021. All parties involved in the research partnership are committed to conducting independent, non-partisan research and producing results that provide insight into consumer finances. Their shared goal is to provide findings relevant to policymakers, academia, and civil society. The complete study “How Consumers have Managed the Multicrisis“ is now freely available for download as an ifo Forschungsbericht.
About N26 N26 is Europe’s leading digital bank with a full German banking license. It offers simple, secure and customer-friendly mobile banking to millions of customers in 24 markets across Europe. N26 processes over 140bn EUR in transactions a year and currently has a 1,500-strong team of more than 90 nationalities. The company is headquartered in Berlin, with offices in multiple cities across Europe, including Vienna, Paris, Milan and Barcelona. Founded by Valentin Stalf and Maximilian Tayenthal in 2013, N26 has raised close to US$ 1.8 billion from some of the world’s most renowned investors. Website: n26.com | N26 Press Contact: press@n26.com
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