Bank Austria Investment Barometer for World Savings Day:
The classic savings book remains an anchor product – but investments offering opportunities for higher returns, such as mutual funds, are gaining ground
- Despite low interest rate levels, classic savings products, at 77 per cent, remain far and away the most popular investment form
- Life assurance policies, state-assisted retirement planning and securities and mutual funds are experiencing a strong tailwind
- An average EUR 207 is being saved per month in 2014
- This year, about 1.3 million people in Austria are again planning to call at their bank on World Savings Day
Following a pronounced decline in savings last year as a result of the tight economy, the current Bank Austria Investment Barometer points to a marked rise in savings propensity among people in Austria in 2014, despite the fact that interest rate levels have fallen to an all-time low. Investors are again showing a stronger preference for savings books, building society savings schemes and online savings accounts. At 77 per cent, the popularity of these products is more or less equal to that of previous years (2013: 65 per cent). In addition to life assurance policies (46 per cent after 31 per cent in 2013) and state-assisted retirement planning (37 per cent after 25 per cent in 2013), demand has above all picked up for securities and mutual funds (21 per cent after 14 per cent in 2013). This is particularly apparent among investors with a higher household net income of EUR 2,900 or more, where the Bank Austria Investment Barometer shows a 15 percentage point increase in securities and mutual funds to 38 per cent. Investments in companies by the higher income groups have also risen markedly (25 per cent after 13 per cent in 2013).
Strong demand for flexible investments
"The savings book remains the anchor product for investors despite historically low interest rate levels" says Helmut Bernkopf, Bank Austria’s Management Board member with responsibility for retail and corporate customers. "This is explained largely by the security offered by classic savings, and the uncomplicated nature of this type of investment. But persons in higher income groups, in particular, are showing a much stronger preference for investment forms offering opportunities for higher returns, such as mutual funds, which are becoming increasingly attractive. Here, too, investors attach great importance to a high degree of flexibility in terms of the size and term of the investment, and to the possibility to access the funds, if necessary. With our Komfort Invest product we offer every investor an investment that is tailored to his/her personal investment goals and specific needs."
Response to the low interest rate levels
Customer loyalty is much stronger in times of greater uncertainty: 63 per cent of respondents indicated that they open a savings account only at their own bank, even if the interest paid by the bank may be lower (2013: 50 per cent). 38 per cent are now saving less than before and prefer to spend their money (2013: 33 per cent). 32 per cent switch to products offering higher returns while agreeing to commit their funds for a longer period (2013: 24 per cent). In particular, investors with a household net income of EUR 2,900 or more are showing a stronger preference for physical assets such as real estate or gold (35 per cent after 26 per cent in 2013), and are switching to products with a higher return, even if this involves accepting a higher risk (21 per cent after 11 per cent in 2013). According to the Bank Austria Investment Barometer, average savings volume amounts to EUR 207 per month in 2014, putting Austria in mid-field in a ranking of European countries.
Putting something on the side for emergencies
At 60 per cent, the greatest motivation to save money is to put something on the side for emergencies (2013: 46 per cent) or, at 56 per cent, to have enough to realise a dream at some future time (2013: 41 per cent). Demand for retirement planning savings schemes is again markedly stronger, at 51 per cent (2013: 37 per cent). Other important motivating factors for saving money are meeting the future needs of one’s own children (44 per cent), saving up for holidays (42 per cent), providing financial support for the family or friends (39 per cent), housing renovation and home furnishings (38 per cent, respectively), or the purchase of a car (33 per cent). At 25 per cent, the motivation to save money for health treatment has risen strongly (2013: 15 per cent).
Martin Gölles, head of Bank Austria’s market research unit, says: "Depending on disposable income, we can discern two trends. Among the group with higher incomes, demand for securities has almost doubled. Almost 40 per cent of investors in this group are interested in investing in securities. 15 per cent view mutual funds as an attractive investment form. 6 of 10 respondents only maintain a savings account with their own bank. In the low income segment, in particular, the proportion of persons opting for these kind of savings has risen by 28 percentage points to 73 per cent compared with the previous year. Regardless of income levels, 38 per cent of respondents are saving less than before and prefer to spend their money. While this may be understandable in the current environment of low interest rates, it is a very questionable trend in terms of saving for future years."
World Savings Day: 1.3 million people in Austria intend to call at their bank
1.3 million people plan to call at their bank on World Savings Day (2013: 1.3 million). 28 per cent of respondents like the gifts, for 24 per cent World Savings Day offers a good opportunity to bring their savings to the bank. The visit to the bank is a tradition (23 per cent), and World Savings Day is moreover a possibility for cultivating personal contact with the bank (21 per cent). Children and grandchildren also like being accompanied to the bank. Bank Austria Management Board member Helmut Bernkopf: “The discussions concerning the pension account and growing public awareness of the need to save up for the future are likely to have contributed to the significantly stronger demand for life assurance policies, state-assisted retirement planning and long-term saving programmes with securities and mutual funds. We offer suitable solutions for all these basic financial needs of investors."
The Bank Austria Investment Barometer was undertaken by Spectra Marktforschung in the period 22 to 26 September 2014 among 500 men and women aged 15 and over by means of computer-supported telephone interviews.
Enquiries: Bank Austria Media Relations
Matthias Raftl, Tel. +43 (0) 50505 52809
e-mail: matthias.raftl@unicreditgroup.at