Economic shocks having limited effect on collections

Neither the Covid-19 pandemic nor the cost-of-living crisis produced significant deterioration in average collections on established paying portfolios, according to analysis by credit management firm Intrum.

Using advanced econometric techniques, Intrum examined the performance of proprietary portfolios of defaulted debt between 2016 and 2025. The analysis examined the influence of macroeconomic variables (such as real wage growth, the unemployment rate, and mortgage interest rates) on aggregate collection patterns, as well as the impact of major shocks, such as the pandemic and the cost-of-living crisis, across portfolios.

Intrum’s Senior Economist Anna Zabrodzka-Averianov said “The analysis reveals that repayment behaviour is primarily driven by portfolio ageing and past performance, rather than short-term macroeconomic fluctuations, showing collections curves tend to revert to expected depletion trends.

“Our additional experiments also confirm that neither the Covid-19 pandemic nor the cost-of-living crisis caused significant deterioration in average collections. In fact, during the pandemic, the treatment portfolio performed slightly better than the control group, underscoring the resilience of repayment behaviour even under severe economic stress, likely also supported by unprecedented government assistance programmes.”

While evidence of macroeconomic influence exists, such as increases in real wage growth exerting a small positive effect on repayment intensity, this is limited. While statistical models capture behavioural and macroeconomic factors, they cannot account for operational agility and consumer adaptation.

Through an accompanying survey of operational managers, the report found that collections team behaviour played a decisive role in sustaining performance. Their experiences and daily conversations with consumers reveal the struggles behind this apparent normality, with significant operational effort expended on both the business and consumer sides. Technological advances also enabled teams to adapt quickly and do more to support individuals.

The report concludes that forecasting models should focus more on changes in people’s behaviour and how portfolios evolve over time, rather than on short-term macroeconomic shocks. At the same time, macroeconomic indicators, including wage developments and housing costs, need to be tracked to help identify risks building up over the medium term.

Intrum’s UK Managing Director Gavin Flynn said “Proactive servicing strategies—such as tailored engagement and flexible repayment arrangements— appear to have mitigated the potential adverse effects of economic shocks, ensuring stability in collections during periods of heightened uncertainty,” he said. “These findings carry important strategic implications.”