Thrifty Germans
January 7, 2011
It doesn't sound like a lot: The saving rate in 2010 was at 11.3 per cent, up from 11.1 per cent. But in combination with more people being employed and their disposable income increasing as a result, the slightly higher saving rate led to a considerable hike in the savings volume, according to the German investment company Allianz Global Investors (AGI).
Overall, Germans' financial assets increased by almost 220 billion euros to reach a record high of almost 5 trillion euros, according to AGI. The average consumer in Germany now has financial assets of some 60,000 euros – almost 3,000 euros more than at the end of 2009.
Around a third of that increase can be attributed to the increased value of stocks already held by Germans, said AGI senior economist Renate Finke. The other two thirds came from making new stock investments, accounting for for almost 150 billion euros.
Who saves?
"These figures are not very meaningful," said Markus Grabka of the Berlin-based German Institute for Economic Research, "because they don't tell you how the financial asset increase is distributed among the population."
Conceding that Germans traditionally have a double-digit saving rate, Grabka said one-fifth of the German population can't afford to save money. "It's only a minority that is able to do any considerable saving," he told Deutsche Welle, "I would say it's only the top 10 percent of the population that may have achieved asset growth."
Those who can invest, do so carefully
According to the AGI study, Germans made more new investments in 2010 than in the previous year, but remained cautious. They continued to put their money into accounts with short term availability.
More money is now in accounts available on a daily basis than in more long-term savings, the AGI study found. Because savings bonds and time deposits require a long-term commitment but pay little interest, they have also become less popular.
A good year at the stock exchange
Germans are also prudent with their stock investments, preferring low-risk stocks and equity funds, the study found.
A good year on the stock markets also contributed to the increase of Germans' financial assets. "The German DAX index rose by 16 percent, so that led to considerable measurement gains," Finke said.
Author: Andrea Roensberg
Editor: John Blau