Sweden Faces Doubling Poverty and Soaring Debt Levels by 2026

Sweden is grappling with a sharp rise in poverty and debt, according to a 2026 report by Stadsmissionen, revealing deepening socio-economic challenges. The poverty rate has more than doubled, climbing from 3% in 2021 to 7% in 2025. This increase translates to approximately 730,000 people living in poverty, with vulnerable groups including children, young adults, single parents, the unemployed, and foreign-born individuals being the most affected.

The report also highlights that about 500,000 individuals, corresponding to 5% of Sweden’s population, are struggling with debt problems—the highest level seen in over 20 years and a 13% rise since 2019. Personal stories like that of Karin Mejri underline the human toll: after contracting COVID-19, Karin faced severe financial hardship, relying on unemployment benefits and savings while battling mounting debts.

Stadsmissionen identifies multiple factors driving this upward trend, including life events such as unemployment and illness, alongside systemic issues like an inadequate social insurance framework and a deregulated credit market. The report calls for urgent, comprehensive interventions such as stricter credit checks, enhanced access to debt relief, and improved coordination between social services to mitigate the crisis.

Jonas Rydberg, Secretary General of Sveriges Stadsmissioner, emphasized the need for effective measures to address these challenges, stating that "ensuring proper credit assessments and better access to debt relief services are crucial to reverse this disturbing trend."

This rise in poverty and debt in Sweden comes amid a backdrop of modest inflation, which reached 1.5% in September 2026, primarily driven by increased electricity and fuel prices. Although inflation remains controlled compared to past highs, economic pressures continue to strain household finances, contributing to the financial vulnerability highlighted in the poverty report.

With poverty now affecting a significant portion of the population and debt burdens escalating rapidly, Sweden faces a critical juncture. The coming months will be pivotal in determining whether new social and economic policies can curb these rising inequalities and provide relief for those hardest hit.