In the pandemic, many save out of concern for the future. There are also fewer opportunities to spend money in lockdown. The result: financial assets have risen to a record high of almost seven trillion euros.
According to the Federal Statistical Office, the savings rate in Germany rose to a record level of 16.3 percent last year. This means that the Germans save more than 16 euros for every 100 euros of their disposable income. According to the statistics office, private households would not have spent their disposable income in 2020 to the usual extent. The government measures to contain the corona pandemic and the adapted behavior of the population to protect against infection with the corona virus would have led to this. As a result, consumer spending by private households fell by 5.4 percent last year compared to 2019. The savings rate increased by 5.4 percent compared to 2019.
Financial wealth reaches record level
Those who save have more money. According to data from the Bundesbank, the financial assets of private households reached the enormous sum of almost 7 trillion euros at the end of 2020. In the previous quarter, the assets were still 211 billion euros lower. The amount consists of cash, securities, bank deposits as well as claims against insurance companies and shares in investment funds. The Bundesbank’s data does not reveal how the enormous wealth is distributed among the citizens. However, the central bankers already know how the increase is made up. “In particular, behind the increase in financial assets were the increase in cash and deposits totaling 74 billion euros and the valuation gains on shares and other equity securities amounting to 61 billion euros,” said the Bundesbank. This means that at least the Germans who directly or indirectly own shares will also benefit from the current bull market on the stock market. Only today did the Dax hit another record high .
The number of shareholders is also increasing
In the meantime, the hunt for records on the international and national stock exchanges has also reached a broader public. According to the Bundesbank, savers, who are actually considered to be rather shy of the stock market, are increasingly investing in stocks or funds. “Private households remained very active on the capital market in the fourth quarter.” In the period from October to the end of December 2020, private households bought shares and investment fund shares totaling 21 billion euros. According to the Deutsches Aktieninstitut (DAI), the number of shareholders in Germany has climbed to the highest level in almost 20 years in 2020. Accordingly, 12.35 million people owned shares in companies or equity funds – almost 2.7 million more than a year earlier. The number was last higher in 2001 at almost 12.9 million.
Cash and deposits preferred
Nonetheless, stocks and funds still only make up a small part of the total financial assets of private households: at the end of last year, according to the Bundesbank figures, almost 805 billion euros were in stocks and other equity rights. In the case of investment funds, it was around 735 billion euros. Much of the wealth is still in cash and bank deposits, which hardly yield anything because of the slack interest rates . However, the argument of many savers is that they can be accessed quickly when needed. The volume of cash and bank deposits totaled around 2809 billion euros at the end of last year. Insurance and other pension products are still popular. At the end of December, their holdings totaled almost 2,458 billion euros.
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