The best is yet to come 

  • Don’t look back in anger: Despite the crises, private households in the nine Eurozone countries we analyze have managed to almost double their total financial assets over the last two decades. However, the composition of growth differs significantly between countries. The rather risk-averse German savers, for example, increased their financial wealth almost exclusively through high savings efforts, while in Finland and the Netherlands, the lion’s share of the increase in wealth was attributable to value gains – accompanied by above-average growth rates.
  • Savings behaviors matter: The implicit return on savings – i.e. the total sum of gains in value and investment income in relation to portfolios – captures the sizable differences in investment strategies. The average annual rate of (nominal) return over the entire period ranges from 2.1% in Germany to more than 4% in the Netherlands and Finland. France (3.3%) ranks in the midfield. Securities have driven overall returns, accounting for more than half of total returns on average. In the second half of the period, however, returns fell on average by 1pp, “thanks” to the dismal year 2022 when all financial assets tanked.
  • The return of savers´ old nemesis: Over the last ten years, and on average across all countries, inflation has cost households more than 80% of their returns on assets; in Austria and Germany, the real return even turned negative. In the decade before, these inflation-induced losses amounted to “only” 55%.
  • Golden girls (and boys): Even with the same savings behavior, no generation can match the wealth accumulation enjoyed by the Baby Boomers. We calculate that their savings sum up to just under 614% of disposable income, with an average nominal return of 6.1% per year. The big losers are the Millennials – shortly after they began to accumulate wealth, crisis followed crisis, resulting in an annual return of just 3.1%.
  • The die is not yet cast: We create four scenarios to see how members from Gen X to Gen Z need to adjust their savings behavior to achieve the same total savings-to-income ratio as the Baby Boomers. For example, in a BAU-scenario, Gen Z savers should increase their savings rate by 3.3pps. However, taken into account the end of the savings glut and the rising demand for capital to drive the green and digital transformations – our so-called “Green and AI boost scenario” –  the necessary increase in the savings rate is only +1.3pp for Gen Z. Thus, members of this generation have a good chance to outperform all their predecessors – if they align their savings behavior to the new realities.
Arne Holzhausen
Allianz SE
Kathrin Stoffel
Allianz SE