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14.07.2006

BA-CA Savings Barometer: Austrians save EUR 197 every month

  • 12.6% of net income is put into savings; EUR 20 more than in the previous year
  • The Number 1 reason for saving is still “reserves for an emergency”
  • Capital guaranty is the most important savings aspects for Austrian savers

Austrians save their money. Statistically speaking, each and every Austrian, from infants to grandparents, will save EUR 197 per month1  in 2006. This represents a savings rate of 12.6% of net income, and is EUR 20 higher than in the previous year. Austrians’ main reason for putting away their money has been and continues to be “savings for emergencies”, and the most important aspect of a savings investment is a capital guaranty. These results were obtained from the BA-CA Savings Barometer, a representative survey conducted by the market research institute FESSEL-GfK on behalf of Bank Austria Creditanstalt (BA-CA).

“Savings for emergencies is and continues to be the main reason for savings in Austria. Capital guaranty is the most important aspect in terms of savings investments. Security. This is clearly the main focus that Austrians have when it comes to their savings,” explained BA-CA Managing Board member Werner Kretschmer, head of Asset Management and Private Banking. “Knowing this helps us in our development of new products.”

Of those surveyed, 76% cited “emergency savings” as a reason for saving and investing. Saving for retirement was stated by 73% of the respondents. “Children” was the third most frequently cited reasons, with 59% of the participants marking this answer.

This was the first time that the survey (which has now been conducted five times) asked about criteria for investing: the most important aspect was a capital guaranty (26%), followed by quick access to the savings (19%) and the stability of the company (15%).

“This comes as no surprise to us and merely confirms the current boom we're seeing in guaranty products,” said Mr. Kretschmer. In 2005, BA-CA sold a volume of about EUR 1 billion, an increase of 235% compared to 2005. Savings deposits, on the other hand, saw growth of around 3% to EUR 18.1 billion. As Mr. Kretschmer noted, “Guaranty funds are the savings account of the 21st century. These products satisfy customers’ most important needs: guaranteed capital with excellent earnings potential.”

According to statistical data, each and every Austrian will save EUR 197 or 12.6% of their net monthly income in 2006. In 2005, monthly savings averaged EUR 177 or 11.7% of net income. This represents an increase of EUR 20 per month. Nevertheless, according to forecasts by economists, in 2007 the amount of monthly savings is expected to decline to EUR 191 per month. The results of the survey paint a different picture however: only 11% of all Austrians believe that they are able to save more today than they could three years ago, while 31% say the amount is the same and 57% feel that they “are able to save less than three years ago”.

Martin Mayr, a BA-CA market researcher, had the following explanation for this contradiction: “One has to draw a line between statistical data and personal feelings. There was a great deal of public discussion about the long winter and the higher oil prices, and the related increases in heating costs and fuel costs. This took place in the period when the survey was carried out.”

As Werner Kretschmer added, “We have also noticed that the use of savings products has increased in recent years. People no longer stuff their emergency savings into their mattresses: they are opting to invest it in more sensible ways. Today’s range of savings products includes more than just savings books and savings at building societies: there’s a broad spectrum of life insurance products, pension-savings products and securities investment plans.”

According to Mr. Mayr, “Austrians are more optimistic about future savings.” Some 40% believed that they would be able to save the same amount in three years. Of those surveyed, 15% believed that it would be more, whilst 36% thought that they would able to save less.

The majority of Austrians’ monthly savings of EUR 197 is placed in bank deposits (EUR 54 or 27%; this includes savings deposits, savings certificates, and current accounts). EUR 48 (representing 25%) is invested in life insurance. EUR 33 or 19% of savings goes into funds. For statistical purposes, the category life insurance and funds also includes pension-related savings products.

Savings deposit accounts continue to be the most favoured form of investment, but securities are catching up
Currently, 55% of those surveyed said that they would invest EUR 1,000 in a savings deposit account. In 2005, this figure was only 49%. Securities are already in second place when it comes to the types of preferred savings products as 18% of the respondents would chose this option (up from 12% in 2005). Deposits with building societies, life insurance and real estate all lost ground compared to the previous year’s results.

For higher amounts of savings (e.g. EUR 10,000) a similar change was observed: 34% of those surveyed in 2005 said that a savings deposit account was the best form of investment, compared to 38% in 2006. Again, securities came in second place with 32% favouring this form of savings in 2006 versus 25% in 2005. With regard to an on-going investment of EUR 100 per month, savings deposit accounts continue to be the most well-liked form of savings, followed by deposits with building societies and savings for pension.

BA-CA Savings Tips:
For amounts around EUR 1,000 BA-CA recommends a savings deposit account or savings certificate as the best option. Currently a BA-CA KapitalSparbuch account bears 3.000% interest for a term of one year. For savings amounts of EUR 10,000, Austria’s largest bank recommends investment in an eligible 3.75% - 4.25% variable rate mortgage bond with a term of 6 years, or the SportGarantieAnleihe with a term of 4 years. For an on-going investment of around EUR 100 per month, a good option is the VorsorgePlus-Pension, a state-sponsored old-age savings plan offered by BA-CA or PensionsManagement with the “GoldenGate-Pension”. These provide flexible pension insurance, with the option of continuous or single payments.

1) Development of financial savings in 2005; Source: OenB, Statistik Austria, BA-CA; (excluding exchange rate changes).

Inquiries:    
Bank Austria Creditanstalt Press Office Austria
Peter N. Thier, Tel. +43 (0)5 05 05 Ext. 52371;   
E-Mail: peter.thier@ba-ca.com