Savings 2014: Age of financial prudence and debt dilemmas
The third annual ING International Survey on savings throws the spotlight on the state of savings of almost 13,000 people in Europe, how prepared people are for a financial emergency and how they are managing debt.
Executive summary
1. The ING International Survey on Savings 2014 finds the uneven recovery from the global financial crisis in different parts of Europe appears to be echoed in an uneven level of comfort with savings. Luxembourg rises to the top of the comfort savings league in 2014, while Romania fills last spot. Italy – at the bottom of the table for the last two years – has managed to rise one place.
2. Spending is still under pressure, with only 22% of the almost 13,000 people surveyed in Europe saying they have not cut back. Asked explicitly if they are more reluctant to spend money since the global financial crisis, almost two-in-three agree that they are. Even more agree that they are more reluctant to borrow in the post-crisis environment.
3. There is an alarming shortage of emergency savings funds – which are widely considered as essential for healthy personal finances. However, it is heartening to see an emergency fund is the most popular savings goal in Europe in general and comes top in 11 out of the 13 countries surveyed.
4. Responsible borrowing – whether through a personal loan from a bank or family member, or via an overdraft, credit card, student loan or car dealer – is a routine part of managing money for many people. The section of the survey that examined debt raises some serious warning signs. For example, 18% of people with debt (excluding a mortgage) do not know how much they owe. Even highly educated borrowers, such as those with a PhD, are only slightly less likely to not know how much they owe. The lack of awareness of this basic piece of personal finance knowledge is startling.
5. Types of borrowing varies from country-to-country, with personal loans particularly popular in Luxembourg and credit card debt featuring frequently in the United Kingdom.
6. Loans from family or friends are the fourth most common source of debt in the survey. But the survey suggests this carries the risk of different stresses and penalties, as 30% of people who have borrowed from friends and family have also hidden a purchase from their loved ones in the last year.
Download
Download report"THINK Outside" is a collection of specially commissioned content from third-party sources, such as economic think-tanks and academic institutions, that ING deems reliable and from non-research departments within ING. ING Bank N.V. ("ING") uses these sources to expand the range of opinions you can find on the THINK website. Some of these sources are not the property of or managed by ING, and therefore ING cannot always guarantee the correctness, completeness, actuality and quality of such sources, nor the availability at any given time of the data and information provided, and ING cannot accept any liability in this respect, insofar as this is permissible pursuant to the applicable laws and regulations.
This publication does not necessarily reflect the ING house view. This publication has been prepared solely for information purposes without regard to any particular user's investment objectives, financial situation, or means. The information in the publication is not an investment recommendation and it is not investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Reasonable care has been taken to ensure that this publication is not untrue or misleading when published, but ING does not represent that it is accurate or complete. ING does not accept any liability for any direct, indirect or consequential loss arising from any use of this publication. Unless otherwise stated, any views, forecasts, or estimates are solely those of the author(s), as of the date of the publication and are subject to change without notice.
The distribution of this publication may be restricted by law or regulation in different jurisdictions and persons into whose possession this publication comes should inform themselves about, and observe, such restrictions.
Copyright and database rights protection exists in this report and it may not be reproduced, distributed or published by any person for any purpose without the prior express consent of ING. All rights are reserved.
ING Bank N.V. is authorised by the Dutch Central Bank and supervised by the European Central Bank (ECB), the Dutch Central Bank (DNB) and the Dutch Authority for the Financial Markets (AFM). ING Bank N.V. is incorporated in the Netherlands (Trade Register no. 33031431 Amsterdam).