Resume af teksten:
Europeans continue to save a higher share of their income compared to pre-pandemic levels, impacting economic growth. In Q1 2026, Europeans spent €85.74 out of every €100 of disposable income on goods and services, only slightly up from Q4 2025. The gross savings ratio in Europe is 14.26%, higher than the pre-Covid level of 12.5%. In contrast, the US has a lower savings ratio at 10.2%, with strong household consumption supporting economic growth. Europe’s higher savings ratio curtails domestic demand, which could grow substantially if savings returned to previous levels. Since 2024, more European savings are being invested in funds and pensions, potentially shifting financial security needs and influencing future consumption. Factors like rising mortgage rates and geopolitical uncertainty continue to affect saving behaviors in Europe.
Fra ING:
The issue: Savings inches down, but still well above historical levels
Europe still has a consumer problem. While household spending has picked up modestly in recent quarters, Europeans continue to save a much larger share of their income than before the pandemic, limiting an important driver of economic growth.
For every €100 of disposable income, Europeans spent €85.74 euros on goods and services in the first quarter of 2026, up only marginally from €85.70 in the fourth quarter of 2025. The increase was somewhat stronger compared with the previous two years. From the end of 2023 until mid-2025, the share of income spent on goods and services hovered around €85.
Yet the current 14.26% gross savings ratio (the share of disposable income not spent on goods and services) remains well above pre-Covid levels. During the five years before the pandemic, this ratio was stable at 12.5%, meaning households spent around €87.50 out of every €100 of income on goods and services.
In the US, by contrast, the gross savings ratio stands at 10.2% (4Q2025) and has come down from pre-Covid levels (graph 1). Household consumption continues to provide relatively strong support to the US economy amid solid demand for goods and services. European households remain more cautious, with higher savings acting as a drag on consumption.
Gross household savings rate
Lower household consumption is weighing on growth*, both relative to historical levels and even more so relative to the US. For years, a gradual normalisation of the savings ratio towards pre-Covid levels was seen as a potential source of support for European growth. So far, there has been little meaningful progress.
In Europe, household spending typically accounts for just over 50% of GDP. If the savings ratio were to fall from first quarter levels to 12.5%, this would imply additional demand for goods and services equivalent to about one percent of GDP. A decline to a level similar to that seen in the US would imply additional demand worth around 2% of GDP.
* If lower household consumption (higher savings) translates into significantly higher household capital formation (higher new residential investment and renovations), it offsets the drain on domestic demand. However, with the exception of 2021 this has not happened. In fact, since 2023, housing investment has declined, further weighing on domestic demand.
In December , we looked at the drivers of this change since Covid. We found a striking increase in the share of people who say ‘now is a good time to save’ relative to 2019. At first glance, this seems counterintuitive. After all, the past four years have been characterised by high inflation, and conventional economic thinking suggests rising prices lower real interest rates, boost consumption and reduce incentives to save. However, recent research by the Bank of England suggests that reduced inflation uncertainty, which is strongly correlated with lower expected inflation, leads to higher planned spending and lower monthly saving.
We share a similar view, but emphasise the role of wealth. We’ve found that the real value of household wealth in Europe fell sharply between 2021 and 2023 as inflation peaked. A similar pattern emerged in the US. But the impact was partly mitigated by higher equity valuations, allowing financial wealth to recover more quickly despite a lower savings ratio.
We also found that the increase in the share of people saying ‘now is a good time to save’ compared with 2019 was especially pronounced among those aged over 50. This age group has accumulated the most wealth, making them more exposed to the erosion of purchasing power caused by inflation. At the same time, older people tend to have significantly higher inflation expectations than younger people ( chart 6, by age) . Households that feel their wealth has been eroded and expect (often much) more to come may attempt to rebuild financial buffers by postponing consumption. As such, we continue to see the erosion of wealth as a plausible explanation for higher savings ratios. Let’s see what’s changed since then.
Since the outbreak of the war in Iran, inflation expectations have risen across all age groups. The increase is strongest among older age groups ( graph 6, by age group ). Nevertheless, older age groups seem slightly less inclined to save than before (graph below). This may reflect some individuals expecting to start drawing on existing savings as a buffer, using them to absorb unexpected financial setbacks as fears of higher inflation materialise.
Younger people, on the other hand, are more likely to say that now is a good time to save. We see this as a more traditional response to higher uncertainty, with younger households building up cash reserves for precautionary reasons. In absolute terms, the share of young people saying that now is a good time to save is at its highest level in the past 36 years. However, compared with pre-Covid levels, the increase is still less pronounced than among older age groups.
The data suggest the slight first-quarter dip in the savings ratio reflects two opposing forces: older households appear to be drawing down part of their reserves, while younger households are stepping up precautionary saving – leaving the aggregate ratio only marginally lower.
Yearly average of the difference between the percentages of respondents who gave positive and negative replies to the question: ‘Over the next 12 months, how likely is it that you will save any money?’
In the second quarter, the savings ratio likely slipped further as households tapped their financial buffers to offset the surge in fuel costs – a drag strong enough to outweigh any incremental rise in precautionary saving. Looking ahead, with fuel prices easing off their peaks but geopolitical and labour‑market uncertainty still high, precautionary saving is likely to re‑emerge as the dominant force.
Mortgage dynamics will reinforce this shift. With mortgage rates up roughly 20 basis points in countries like Germany, Italy, Spain and the Netherlands – and uncertainty rising – demand for new mortgages is set to cool over the coming quarters, while repayments are likely to pick up.
Until May, mortgage‑debt growth held steady, reflecting the usual lag before shifts in borrowing behaviour show up in the data. A similar pattern was seen in 2022, when the impact of higher interest rates materialised with a delay. However, we don’t expect an adjustment of similar magnitude; the increase in mortgage rates has been much smaller. Even so, we do expect to see slower growth in the mortgage debt stock over the next couple of months. Slower mortgage borrowing reduces the amount of new credit flowing into the economy, dampening housing-related spending and limiting consumption growth. At the same time, faster mortgage repayments leave less room for consumption, leading to higher saving ratios.
All in all, we see only limited upside for consumption in the third quarter. Any lift from easing inflation is likely to be muted once again by a rising savings ratio.
Following the Covid pandemic, eurozone households initially channelled large amounts into bank deposits and debt securities. Since 2024, however, financial transaction data shows an increasing share is going into investment funds (including ETFs), as well as insurance, pensions and standardised guarantees. Over the past two years, net inflows into these assets have consistently outpaced those going into bank deposits.
Quarterly financial transactions of households and NPISHs, 4q moving averages
Household balance sheets show that as more savings have shifted into investment funds, pensions and other market‑linked products – and as asset prices have risen, the share of liquid financial investments in total wealth has increased (graph 4).
Between 2022 and 2025, liquid investments rose by the equivalent of 9% of GDP. Other forms of financial wealth remained roughly constant relative to GDP, whereas currency and deposits declined by almost 5% over the same period. The combined effect of asset price increases and households adding more money to various forms of wealth helped lift the wealth-to-GDP ratio. The gains remain far smaller than in the US, where stronger equity markets – and a much larger share of household wealth in equities and mutual funds – have driven wealth higher far more quickly, even though Americans added relatively less from new savings.
Eurozone household assets
Looking further ahead, if Europeans continue to allocate more of their savings to investment products, the need for precautionary buffers could gradually fade. As returns build wealth and offer stronger protection against inflation, households may feel less pressure to set aside such a large share of income to reach their desired level of financial security.
If that shift takes hold, domestic demand could get a lasting boost. Moves like Germany’s pension reforms and the European Savings and Investment Union push in the same direction by encouraging households to hold a larger share of their wealth in investment products. We’re not there yet, however.
Kilde: ING, https://think.ing.com/articles/european-consumers-still-arent-consuming-but-the-way-they-save-is-changing/
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