Saving in the Netherlands: a steady increase in savings

In the first eight months of the year Dutch households put about 28.9 billion guilders (worth 13.11 billion euro in their savings accounts, on balance that is. This is about 13 times as much as in the same period of 2000, and three times as much as in the same periods in 1998 and 1999. Including interest the savings up until the end of August 2001 added up to 31.4 billion guilders worth 14.25 euro.

Savings of private households

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Strongest increase in January 2001

Savings this year increased most in January. In that month the savings balance went up by 6.1 billion guilders (2.77 billion euro). Including interest the amount of savings came to 7.3 billion guilders or 3.31 billion euro. Many investment accounts were converted into savings accounts during this period, which can be explained in part by the introduction of the new tax system. In the other months the savings balance increased by an average of 3.3 billion guilders or 1.5 billion euro. The savings balance for July was 2.9 billion guilders, for August it was 2.1 billion (1.32 billion euro versus 0.95). Traditionally people save less in July and August than in June. But in Augustus 2001 people saved 15 times as much as they did in the ten years before.

Savings revisited

Why did saving become so popular this year? Several reasons contributed to a savings-positive climate. One reason is the new tax system that took effect in 2001, which cut the advantage of stock ownership and annuities over savings. Furthermore there is the tax exemption on wealth tax, which is much more advantageous to people with savings than the previous tax exemption was. And there is the new tax cut which meant that spendable income went up.

Then there is consumer confidence, which decreased steadily between January and the middle of the year, when it stabilised Another influence was the stock market, with falling share prices. The CBS-all share index fell by 44% since its record high early September 2000 so many investors got out and put their money in the bank for the time being.

In the bank

The total savings saw a substantial increase to 327.4 billion guilders or 148.57 billion euro by the end of August. On 31 December 1997 the total was 252.9 billion guilders or 114.76 billion euro, so in just over three and a half years savings increased by a quarter.

Assets on savings accounts

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There were 25.7 million savings accounts by August 2001, up almost 3% on a year ago. The increase was mainly caused by the growth in deposits on notice, which went up by 6% on 12 months ago. The average amount per account in August was 12,7 thousand guilders, (or 5.76 thousand euro): 8% more than in the same period in 2000.

Jan Ramaker