Financial expert reveals: Despite inflation, most households are saving more

Financial expert reveals: Despite inflation, most households are saving more

According to a report by www.cash-online.de,

According to a recent study by the German Institute for Retirement Provision (DIA), inflation is the main problem for three out of four Germans. Rising prices are a concern for 75 percent of those surveyed, but reactions to this increase vary greatly.

The study authors developed a savings and concern typology to classify differences in savings behavior and financial knowledge independent of inflation. Around a third of those surveyed were looking for new sources of income, including paid overtime, part-time jobs or salary demands. However, less than half of those affected believe that their income will actually increase.

Furthermore, almost a third of those surveyed have already adjusted their savings behavior, with two thirds building up higher reserves and a third saving less. One in eight people have changed their form of investment, with most investing long-term and securely. The study shows that inflation has not reduced low preparedness; 55 percent have saved for retirement in the past, and this proportion has increased slightly. In particular, younger people under 50, trainees, job seekers and the upper class show a slightly increased willingness to save for retirement.

Despite the inflation-related restrictions on consumption, most households tend to save more. Only the “adjusted” and very frugal occasionally save less. The study is based on a representative survey of 2,000 people aged 18 and over, carried out by Insa Consulere in May 2023.

These findings show that inflation influences Germans' savings behavior and willingness to make provisions. The increased willingness to save for precautionary purposes, particularly among younger and lower-income population groups, could have a long-term positive effect on the financial market, as more capital could be available for investments and long-term savings models. In addition, the study shows that despite inflation, the population is trying to find new sources of income, which could also have an impact on the market. However, it remains to be seen whether the increased willingness to save can be maintained in the long term despite inflation.