Austria's savings rate is rising: Who really benefits from the 34 billion?

Austria's savings rate is rising: Who really benefits from the 34 billion?

The savings rate in Austria will increase to 11.8 percent in 2025. This represents a significant increase compared to 8.7 percent in 2023, as reported by the Momentum Institute. This shows that despite rising incomes, households are placing a strong focus on saving during the economic downturn.

Last year, households in Austria saved almost 34 billion euros, which corresponds to over two percent of economic output. In comparison, the savings rate in the Eurozone was just 8.4 percent last year. Despite real income growth of 3.5 percent in 2024, consumption only grew minimally by 0.1 percent. This suggests that, on average, the Austrian population in 2024 will have saved almost all of their income increases from the previous year.

Income levels and saving behavior

The negative savings rate is particularly alarming among households in the lower income brackets, who are hardly able to put money aside. In contrast, households in the top tenth save over 2,000 euros per month. Such differences highlight the unequal distribution of economic resources, which also affects consumption and savings opportunities. This inequality is widespread in society and is also reflected in other countries. In Germany, the bottom 50 percent of the population owns less than 24 percent of total gross earned income and only 0.3 percent of total assets, while the top 10 percent claim around 28 percent of income and almost 60 percent of assets.

Economic status not only has a direct impact on one's own standard of living, but also influences educational decisions and life trajectories. There is a strong connection between the economic status of parents and the status of children, which reinforces the perpetuated inequality in society.

Redistribution measures

To reduce the savings rate and increase consumer demand, several proposals have been put forward. These include redistribution from rich to poor to give lower income groups more financial flexibility, as well as reducing “precautionary saving”. The latter could be achieved through measures to reduce fear of unemployment. An increase in the net replacement rate for unemployment benefits from 55 to 70 percent is also being discussed.

• Wiedereinführung von Vermögen- und Erbschaftssteuern
• Erhöhung der Kapitalertragssteuer auf 30 Prozent zur Generierung von 560 Millionen Euro pro Jahr
• Steuererhöhungen für Unternehmen sowie der Abbau von Einmalzahlungen und Subventionen

The discussion about social inequality and the willingness to take measures to reduce it will be of great importance in the coming years. The connection between economic resources and social mobility is evident and requires concerted efforts at political and social levels.

Overall, the current figures on the savings rate in Austria and the accompanying analyzes provide a clear impression of how deeply rooted inequality is in the distribution of income and wealth in different societies. Economic status not only influences consumption decisions, but also contributes to exacerbating social inequalities. This is a global problem that requires a rethinking of economic and social policy.

Further information on the topics of savings rates and social inequality can be found at sn.at and bpb.de.