One missed paycheque, one unexpected expense, and we tip into financial hardship…
How many of these can you NOT afford with ease?
1. Your rent, mortgage, or utility bills
2. Keeping your home warm or cool
3. An unexpected expense e.g. car or home repair
4. A week’s holiday abroad
5. Meat or protein three times a week
6. A new television, washing machine, car, or telephone.
These are the EU indicators used to calculate material deprivation. And if you cannot afford any three without financial worry, you fall into what’s known as ‘material deprivation’.
If four are beyond your means, you suffer from ‘severe material deprivation’. And, should you be unable to afford either three or four in the current year AND in at least two out of three preceding years, then you’re suffering from ‘persistent material deprivation’.
“Wait. I’m materially deprived?” asks 33-year-old architect Philippos Michail. “I always thought I was okay. I’m not starving, I have a roof over my head, I own a car. But both rent and bills are always a strain, and I save for several months when I need a new phone…”
There’s an official name for these factors: the ‘EU-SILC’, or ‘EU statistics on income and living conditions’. But for the sake of brevity, we’ll just refer to them as Things We Can’t Afford. Especially in Cyprus.
Because, according to the Eurostat data, 40 per cent of the island suffers from an inability to face unexpected financial expenses – one of the highest rates in Europe!
Romanians have it the hardest: nearly 50 per cent would struggle with at least three of the listed expenses. Second is Croatia, third is Latvia, fourth is Greece, and fifth is Bulgaria. And then, in sixth place (and well above the EU average), comes Cyprus.
The World Bank classifies Cyprus as a ‘High-income economy’. But it may not always feel that way for the person on the street. Slovakia, Lithuania and Hungary all score better than us on the EU-SILC. And we don’t come close to the top-ranked nations: fewer than 20 per cent of the residents of Czechia, Malta and the Netherlands would bat an eyelid if their car broke down or their rent was raised!
From the stats, you might expect almost half of Cyprus is on the breadline. But that’s not the case: in 2023 (at the time of writing, the last year for which data is available) just 17 per cent of island residents were at risk of poverty.
So why is Cyprus, a country with a relatively low poverty rate, still flirting with such financial vulnerability?
Well, according to a recent report from the Cyprus Institute of Labour, salary stagnation is a big part of the issue. Despite a recent uptick, the average wage still stands at 2.5 per cent lower than pre-2006 levels.
“You’ve got to wonder how many of us are just one financial misstep away from trouble,” asks 47-year-old IT consultant Pantelis Economides. “My dad tells me that at my age, he owned a house and had over €50,000 in savings. Meanwhile, my wife and I still rent, because we can’t afford a deposit.”
As our rents and mortgages rise, there’s little left for luxury, let alone unexpected expenses. Unemployment may be falling, but we still see a lot of seasonal and contract work (especially in tourism, hospitality, and services) that causes unpredictability in our long-term financial planning.
“When I came back from uni, it took me nine months to find a job,” says 25-year-old graphic designer, Lina Erotokritou. “Even then, it’s part-time, so I don’t have a steady income.”
Lina admits to several cost cutting measures: “I watch stuff on my laptop rather than get a tv; I limit myself to one meal out per week. I certainly don’t consider myself poor,” she adds. “But I’m struggling a lot more than my friends who stayed in the UK. One of them works in a bar in London, and makes double my salary!”
Meanwhile, debt and taxes also play a role: foreign investment doesn’t always trickle down, and many people are juggling so many debts and loans that an unexpected bill can wreak havoc on the budget.
Inflation (energy prices, particularly, have become a thorn in the side and a drain on the wallet) is squeezing us further: even those who are well above the poverty line might have to choose between air conditioning and a vacation.
“My wife and I budget for the basics each month: rent, bills, and food. ANYTHING beyond that is a luxury,” explains Marinos Kallis. “Our summer electricity bill came in at 900 euros, even though my wife thinks about the cost of air conditioning every three minutes! And a week’s holiday? You have to be joking. I haven’t had a new pair of jeans in three years! God knows how we’re going to survive as we get older, because our salaries are certainly not keeping pace.”
Cyprus’ ageing population means that many pensioners are now finding their savings don’t stretch to unexpected costs such as home repair. And while those who can, often provide financial support to their children and grandchildren, this temporary safety net further depletes the bank account.
“10 years ago, I had to have emergency surgery,” says 44-year-old teacher Alexia Dimitriou. “My parents had to pay. Now, thank goodness, we have Gesy; without it, I couldn’t afford doctors’ visits or medication. But the mortgage, the bills – they’re still hard to manage each month, even as a couple. Sometimes,” she whispers, “I wonder if my husband and I only stay together because nobody can afford to be single in Cyprus…”
It’s a poignant picture of a growing divide. It’s not that we’re falling into poverty. But many of us are balancing precariously on its edge – flirting with what the EU blandly refers to as ‘material deprivation’.
One missed paycheque, one unexpected expense, and we tip into financial hardship. An island that’s a paradox of low poverty but financial insecurity.
