How the cost of living is set to keep increasing in Switzerland
Inflation and the war in Ukraine continue to impact the purchasing power of Swiss households. But how much more will you have to pay for basic services?
Even though Switzerland’s inflation fell from 2.6 percent in April to 2.2 percent in May — the lowest level since February 2022 — the cost of living is continuing to climb.
In fact, for the rest of this year and well into 2024, Swiss consumers will face higher costs for fixed expenses, such as utilities and other services.
In fact, according to the analysis carried out by Watson, the Swiss news platform, an average family with two children may have to spend over 2,600 francs more per year just for essential services.
We've compiled an overview of what costs are expected to go up, and by how much:
Rents
With the reference mortgage rate having been raised on June 1st from 1.25 to 1.50 percent, many tenants will see their rents increase by as much as 3 percent.
What exactly does this mean?
An apartment that now rents for 2,000 francs a month would cost 2,120 francs after the rate increase — amounting to an additional expenditure of over 1,400 francs a year.
But that’s not all: experts say that reference rates will rise again in 2024, which would mean rents could go up for many by 6 percent in total.
READ ALSO: Why rents in some parts of Switzerland are now set to increase sharply
Health insurance premiums
While the Federal Office of Public Health (FOPH), which sets the annual health insurance premiums, has not yet announced the increase planned for next year (the figures are released in October), experts already predict another sharp hike.
According to Comparis consumer platform, the average increase should reach 6 percent.
Among the reasons cited by Comparis is the lower money reserve that insurance carriers must keep at a certain level at all times.
However, many health insurers "now lack a financial buffer to cushion current cost fluctuations," Felix Schneuwly, health insurance expert at Comparis pointed out.
READ ALSO: Why is Swiss health insurance set to get more expensive?
Electricity
You have seen your bills for electricity consumption climb sharply from the beginning of this year — more so in some regions than in others. And these costs will remain steep — and even increase further for some users.
A typical household can now expect to consume 4,500 kWh and pay 1,215 francs for it, which corresponds to 261 francs more compared to 2022, though this amount can vary greatly by region.
Public transportation
If you rely on trams and buses to get around, you will have to dig deeper into your pockets to afford this service.
That’s because fares will go up from December 10th, 2023.
Single tickets, as well as day and multi-journey tickets will cost an average of 4.3 percent more.
As an example, Watson cited a round-trip fare between Bern and Zurich, which now costs 102 francs (full fare). From December 10th, it will increase to 106.50. Add to it similar hikes in other fares, and you will get the picture of how much more expensive travel will become.
At the same time, the price of the half-fare travelcard for adults will rise from 185 to 190 francs, and the GA travelcard for second class will go up from the current 3,860 to 4.080 francs.
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Even though Switzerland’s inflation fell from 2.6 percent in April to 2.2 percent in May — the lowest level since February 2022 — the cost of living is continuing to climb.
In fact, for the rest of this year and well into 2024, Swiss consumers will face higher costs for fixed expenses, such as utilities and other services.
In fact, according to the analysis carried out by Watson, the Swiss news platform, an average family with two children may have to spend over 2,600 francs more per year just for essential services.
We've compiled an overview of what costs are expected to go up, and by how much:
Rents
With the reference mortgage rate having been raised on June 1st from 1.25 to 1.50 percent, many tenants will see their rents increase by as much as 3 percent.
What exactly does this mean?
An apartment that now rents for 2,000 francs a month would cost 2,120 francs after the rate increase — amounting to an additional expenditure of over 1,400 francs a year.
But that’s not all: experts say that reference rates will rise again in 2024, which would mean rents could go up for many by 6 percent in total.
READ ALSO: Why rents in some parts of Switzerland are now set to increase sharply
Health insurance premiums
While the Federal Office of Public Health (FOPH), which sets the annual health insurance premiums, has not yet announced the increase planned for next year (the figures are released in October), experts already predict another sharp hike.
According to Comparis consumer platform, the average increase should reach 6 percent.
Among the reasons cited by Comparis is the lower money reserve that insurance carriers must keep at a certain level at all times.
However, many health insurers "now lack a financial buffer to cushion current cost fluctuations," Felix Schneuwly, health insurance expert at Comparis pointed out.
READ ALSO: Why is Swiss health insurance set to get more expensive?
Electricity
You have seen your bills for electricity consumption climb sharply from the beginning of this year — more so in some regions than in others. And these costs will remain steep — and even increase further for some users.
A typical household can now expect to consume 4,500 kWh and pay 1,215 francs for it, which corresponds to 261 francs more compared to 2022, though this amount can vary greatly by region.
Public transportation
If you rely on trams and buses to get around, you will have to dig deeper into your pockets to afford this service.
That’s because fares will go up from December 10th, 2023.
Single tickets, as well as day and multi-journey tickets will cost an average of 4.3 percent more.
As an example, Watson cited a round-trip fare between Bern and Zurich, which now costs 102 francs (full fare). From December 10th, it will increase to 106.50. Add to it similar hikes in other fares, and you will get the picture of how much more expensive travel will become.
At the same time, the price of the half-fare travelcard for adults will rise from 185 to 190 francs, and the GA travelcard for second class will go up from the current 3,860 to 4.080 francs.
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