Less money available for saving?

21/02/2005 10:00

In recent years the amount deposited in savings accounts by households increased considerably. It seems, however, that saving by households decreased in the course of 2004. They have less money left to put aside.

Savings

Savings

Amount in piggy bank growing

On balance households deposit more money in savings accounts than they withdraw. Thus, the total amount deposited in savings accounts is continually growing. At the beginning of the 21st century the total amount in savings accounts was 130 billion euro. By the end of 2004 the amount put aside in savings accounts had increased to almost 200 billion euro.

Extra stimulus in 2001

For various reasons, households saved a lot of money in 2001. New tax legislation was introduced in 2001 to the effect that savings and shares were treated equally by tax authorities. Consequently, large amounts of money were transferred from investment accounts to savings accounts.

As a result of the new legislation 7 million households in the Netherlands benefited from tax cuts. When the share markets collapsed in 2001, many households switched from investing money to saving money in order to avoid risks.

Savings

Saving remains popular

Saving also remained popular after 2001. Although the amount of money saved by Dutch households in 2002 was lower than one year previously, it was much higher than in the late 1990s. In the course of 2004, however, saving appears to have become less popular.

Financial situation of the household

Financial situation of the household

More households have less money to put aside

In the course of 2001 the number of households claiming they had some money left by the end of the month increased. The group who barely managed to make both ends meet decreased. This trend is on a par with tax cuts for households implemented in 2001.

From 2002 onwards the group of households claiming they had money left by the end of the month became smaller and smaller and the group who barely managed grew continuously.

In the latter half of 2004 this process gained momentum. The reduced amount saved by households in the latter half of 2004 may bear relation to the rapid reduction of the number of households claiming they have enough money left to save.

Ben van Cleef