In the second quarter, people in germany put more money aside in the wake of the corona crisis and benefited from the recovery on the stock markets. In total, they were richer than ever at the end of june. According to the deutsche bundesbank, the financial assets of private households in the form of cash, securities, bank deposits and claims against insurance companies rose to a record level of around 6630 billion euros. 253 billion euros, or 4.0 percent, more than in the first quarter of the year.
Savings and shares
In addition to savings, the recovery on the stock markets after the price collapse at the beginning of the crisis also drove the development. "The valuation losses on equities in the previous quarter triggered by the pandemic and uncertainty about its economic consequences were largely compensated for", the bundesbank explained on friday.
Savers continued to rely on cash and bank deposits, among other things, which hardly yield anything due to the low interest rates, but which they can access quickly. The volume at the end of the second quarter totaled around 2694 billion euros. That was about 72 billion euros more than in the first quarter of the year. 1882 billion alone was in checking accounts or in cash.
DZ bank estimates that the corona crisis drove the savings rate to a record level this year. "On the one hand, many private households have taken the precaution of saving more for fear of income losses due to short-time work or unemployment, said DZ bank economist michael stappel jungst. "On the other hand, lockdowns and travel restrictions severely hampered private consumption, especially in the first half of the second quarter."
According to the top cooperative institute, the savings rate was allowed to rise to around 16 percent this year, compared with 10.9 percent in 2019. This means that private households saved around 16 euros out of every 100 euros of disposable income. According to data from the federal statistical office, this was the highest level since reunification.
According to the leading economic research institutes, the disposable income of private households has remained relatively stable overall in the acute crisis phase. Economic stimulus programs had also contributed to this. So people have money to put aside in the aggregate.
Insurance and other products for private retirement provision also remain popular. At the end of june, the total was around 2423 billion euros, some 20 billion euros more than in the first quarter. According to the bundesbank, net purchases of shares and other equity interests were also an important factor, amounting to 16 billion euros.
As in the past, people take advantage of low interest rates to borrow money cheaply, especially for housing loans. Real estate is considered relatively crisis-proof. After deducting debts, the financial assets also increased significantly by 236 billion euros to a net total of around 4722 billion euros. The bundesbank takes into account cash, bank deposits, securities and insurance claims – but not real estate. How the assets are distributed is not clear from the data.