Families in Switzerland will face a 2.600-franc hole in their finances by the end of this year, a report by Watson has found. Rises in the cost of renting a house or apartment have been blamed, alongside what the newspaper called a “cost trap” of rising prices for mandatory services.

Families in Switzerland face 2.600-franc cost trap

According to the report, which used forecasts by the Swiss government and the official Price Monitor, couples with two children should expect to pay 2.600 francs a year extra by the end of 2023. Watson noted that the primary cause of this “cost trap” is the rise in the reference interest rate, which will see more than half of tenants pay higher rents by October - around 100 francs more a month on average.

Increases in the cost of basic and supplemental health insurance are also set to have a significant impact. With prices having already risen by 6,6 percent in 2023 - with more rises on the way for 2024 - Watson estimated that the average family will spend an extra 900 francs a year on insurance alone.

Then there is the rising cost of energy, with a typical household slated to pay 261 Swiss francs more a year on average, despite costs falling on the wholesale market. Finally, prices on public transport in Switzerland are set to rise by 4,3 percent on average by the end of this year, meaning that even without including rising food prices, the average family faces a “cost trap” of 2.600 francs in 2023.

Swiss consumer foundation warns of unbearable price rises

Speaking to Watson, the official Price Monitor Stefan Meierhans said that the current rises are "particularly painful for households with lower incomes, but also for the middle class." He added that despite calling on companies to "exercise particular restraint in the current period of unexpectedly rapid inflation", many of his suggestions were ignored.

A spokesperson for the Consumer Protection Foundation added that the situation is becoming “increasingly unbearable.” Unlike the Price Monitor, the organisation blamed the government for rising prices, adding that "health insurance premiums are rising, among other things, because Parliament is preventing effective cost-cutting measures."

They added that the price of public transport tickets is only rising because of the austerity measures announced by Finance Minister Karin Keller-Sutter. Politicians have “so far not shown the willingness to relieve the burden on consumers”, the spokesperson concluded.