Press release - 21 January 2026 15:00

New survey shows Europeans face mounting financial strain, housing insecurity as institutional trust wavers

Increasing economic divergence and a profound sense of precariousness permeate the European Union today, according to new results from Eurofound’s eighth Living and Working in the EU e-survey. Despite inflation falling to 2.1% in October 2025 and a broadly stable labour market, the new e-survey findings detail a squeezed European public grappling with the cumulative weight of half a decade of shocks that have left lasting financial and psychological scars.

The findings underscore a growing divide in financial resilience. In 2025, 61% of respondents in low-income households reported difficulty making ends meet, a stark contrast to the 9% recorded among high-income cohorts. There is also a rising tide of arrears and anticipated payment failures, particularly among single-parent and multigenerational households.

Housing has emerged as a primary site of insecurity. Cost-of-living pressures are disproportionately burdening private renters, pushing housing security further out of reach for many.

This economic stress is reflected in deteriorating levels of subjective well-being. Optimism about the future, which plummeted in 2022 following geopolitical shifts, has failed to recover. Mental well-being remains a critical concern, with WHO-5 scores persisting at levels well below those seen in the early stages of the pandemic. Crucially, 57% of respondents are now classified as being at risk of depression. What started as a response to a crisis appears to have developed into a chronic condition.

The survey also captures a structural shift in the European workplace. Hybrid working is now the norm, yet a notable friction has emerged between employee preference and corporate reality. While half of the workforce desires the flexibility of teleworking several times a week, those denied such arrangements report significantly higher levels of fatigue and work–family conflict.

Perhaps most concerning for policymakers is the erosion of trust. Institutional trust has become increasingly fragmented, closely tracking with economic security. Those aged 35–64 report the lowest levels of trust, coinciding with their high levels of financial difficulty. Conversely, while young adults remain pessimistic about their personal prospects, they retain an encouraging degree of confidence in national and EU institutions.

To address the erosion of financial resilience, the research proposes several recommendations. For example, targeted income supports tailored specifically to low-income households, single parents, and renters are vital. Furthermore, it notes that, as mental well-being remains stagnant, it is essential that well-being metrics are systematically integrated into employment, youth, and social inclusion policies.

At the workplace, employers have an important role to play by offering flexible and hybrid arrangements where feasible, alongside measures to mitigate work intensity and fatigue. Measures such as these are increasingly important to maintain employee morale and effectiveness.

Ultimately, the survey highlights that rebuilding trust and democratic engagement is contingent upon reducing economic insecurity. Without robust policies to strengthen financial resilience, Europe risks a deepening of the disengagement and polarisation that currently characterises its most vulnerable groups.