The pace at which Dutch people save decreased last year. From figures that the Dutch bank published on Monday, shows that households had 576 billion euros in the bank last year, 15 billion more than a year earlier. That is an increase of 2.7 percent. Last year the growth was still 33 billion, in 2020 it was even 43 billion.
The pandemic only partly explains why Dutch people save less. When the coronavirus spread in the spring of 2020, consumption plummeted, according to figures from the Central Bureau of Statistics. So there was more room for saving.
But even in the year before the corona crisis, the total amount that households had in Dutch banks grew faster than last year. While interest rates are currently higher than then, which should make saving more attractive. DNB writes that savings accounts received more than 1.7 billion euros in interest last year, more than three times as much as in 2022. The Dutch also moved billions from checking to savings accounts, probably to collect more interest.
Money evaporates
The savings interest rate is still lower than inflation. Money in the bank therefore loses value in relative terms. This may have caused more households to choose other ways to spend their money, such as investing. Recent DNB figures indeed show that households have purchased hundreds of millions more in investments.
It may also be a factor that households invest more money abroad. Last autumn, this amounted to 10.5 billion euros in Eurozone countries outside the Netherlands, a doubling compared to two years earlier. DNB reported. Countries with higher savings rates are “on the rise.” And yet, if that amount is added to all savings, the savings rate last year was still lower than in 2019.
Inflation offers a third explanation. The increased prices caused the largest decline in purchasing power in forty years in 2022. Money that Dutch people had wanted to save was spent on fixed costs.
Unevenly divided
“Compared to other countries, the Dutch have relatively little savings,” says Marike Knoef, professor of economics at Tilburg University. “It would not be surprising for some households to have more savings to be able to absorb negative shocks. On the other hand: in the Netherlands you are relatively well taken care of if something happens to you. As a result, we can also afford a smaller buffer.”
The DNB figures do not show who the savings end up with. That is an important question, says Knoef: “Savings are unevenly distributed. Some often save more than they actually need, while others would like to save more but do not have enough left at the end of the month.”
With the collaboration of Eva Smal.
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