World Savings Day | Many people want to make provisions, but there is often a lack of money

If you want to invest for your old age, you first have to have money left over: advertising in Hamburg Central Station. Photo: IMAGO/Chris Emil Janßen Saving was yesterday, investing today. This is the message from the municipal savings banks in Germany. “Today, saving means more than putting money aside in a savings account,” said Ulrich Reuter, President of the German Savings Banks and Giro Association (DSGV), during a video press conference on the occasion of World Savings Day on October 31st, which was launched by savings banks over 100 years ago. "It also means investing part of your savings in the long term." But many people have hardly used the capital markets for long-term savings - to the annoyance of the financial industry, of course. 

According to the “Wealth Barometer 2026” from the Sparkasse Association, 75 percent of those surveyed consider regular saving to be important or very important. Among 16 to 29 year olds it is even 83 percent. There are clear differences in securities ownership: While 36 percent of men own securities, the figure is 21 percent of women. As a result, a lot of potential remains unused when it comes to so-called wealth creation, complains DSGV boss Reuter. 

The narrative that the advertising departments of savings banks and banks spread is simple: future pensions are uncertain and in any case too low. In order to maintain the desired standard of living, traditional savings are no longer sufficient because interest rates are too low. The propagated way out: “invest” in the capital market. Specifically, consumers should invest money in stocks and similar securities traded on stock exchanges. These offer the chance of a higher return than the savings account. There are no guarantees for this, but if you don't dare...

Financial service providers hide their own interests. While with traditional savings investments they have to pay out interest regularly to customers, with “investments” they collect commissions and make immediate profits. 

Ulrich Reuter, head of the Association of Municipal Savings Banks, is drumming up support for investments on the stock market. Photo: IMAGO/Funke Foto Services The “investing instead of saving” narrative is supported by the black-red federal government. At the turn of the year, the stock-oriented “retirement provision deposit,” generously supported by the state in view of tight budgets, will replace the previous Riester pension, which was focused on security. The Bundestag also recently passed the Early Start Pension Act. With this, the Merz/Klingbeil government is creating an introduction to private pension provision at an early age of six. 

Savings banks, banks and financial distributors are now sensing big business.

Savings banks, banks and financial distributors are now sensing big business. Market observers expect a rush, particularly for ETF products that promise higher returns at low costs. Such an “Exchange Traded Fund” is an exchange-traded fund that tracks the performance of an index. Since investments should generally be widely diversified, many ETFs invest their customers' money in globally operating indices such as the MSCI World. However, US stock corporations and technology companies such as Amazon, Meta (formerly Facebook) and Tesla, owned by Donald Trump confidant Elon Musk, dominate here. “With the MSCI World, we are not strengthening the domestic market, but rather the USA,” said the chairman of the German Association of Financial Advisors, Thorsten Müller, recently criticizing the federal government’s retirement planning concept.  

Financial service providers fail to mention that even a successful stock investment will rarely fill the individual pension gap. In the long term, in normal times it can bring a return of around eight percent per year - which may be enough in old age if larger sums are paid in throughout your life. Only some of the citizens can do that.

According to the Federal Statistical Office, Germany is Europe's piggy bank. Private households in Germany save more than in many other industrialized countries. At 18.9 percent, the gross savings rate is well above the average in the European Union of 14.3 percent and the USA at 10.7 percent. However, German citizens' desire to save puts a considerable strain on the national economy, as savings are no longer used as purchasing power. At the same time, US consumers' low propensity to save partly explains the higher growth rates in the United States. 

According to a representative survey carried out on behalf of the Federal Association of Volksbanks and Raiffeisenbanks (BVR), the cooperative sector, on World Savings Day, people in Germany save an average of around 200 euros per month. The pension message from politicians has also reached young people. According to the survey, young people between the ages of 14 and 19 already save an average of around 100 euros per month. “This is a good prerequisite for long-term wealth creation and private retirement provision,” says BVR President Marija Kolak.

However, such average values ​​only reflect a small part of social reality. While around a fifth of those surveyed save 20, 30 or more percent of their monthly net income, half of the citizens only “invest” irregularly when they have money left over. And for 21 percent that is never the case. More than one in five saves at most – on consumption. 

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