Survey: increase in possibilities for the population to save, more varied means of saving are used

“With the decrease in interest on time deposits at commercial banks, the population is more intensely searching for riskier, but also potentially more profitable saving alternatives”, says Darius Kulikauskas, Senior Economist of the Macroprudential Analysis Division of the Financial Stability Department of the Bank of Lithuania.

Although accounts and deposits at banks (by 56.5% of all who save), as well as cash held at home (54.6%) are still the most popular means of saving, there is a gradual rise in the popularity of life assurance (17.1%), pension and investment funds (15.8%). The ratio of the latter saving means grew over the year by 4.7 p.p.

In addition, households are beginning to use more varied saving means — 41 per cent of surveyed households that save have more than one saving means. Half a year ago, such families made up a third; a year ago — only a fourth.

This year in the first half-year, 62.3 per cent of households saved at least a little. Compared to the survey conducted a year ago, the share of such households increased by 3.4 p.p. The amount of money most commonly put away as savings is LTL 100–500, as indicated by 30 per cent of respondents. The share of families that save nothing decreased from 33.0 to 30.2 per cent.

According to the survey data, slightly less than half of households had financial liabilities. The most common liabilities — consumer loans — amounted to 26.1 per cent, leasing — 23.9 per cent, housing loan — 18.0 per cent. Almost a fifth (18.8%) of those in debt owed money to their relatives and friends.

Among those with financial liabilities, lowest-income families were distinguished, which more often than households with a higher income borrowed by taking out fast credits. The share of households belonging to the lowest-income group and indebted to fast credit companies over the year grew almost twice and amounted to 21.9 per cent. For comparison: fast credit made up only 3.1 per cent of liabilities of households belonging to the higher-income group.

Almost half of those surveyed (49.1%) with some financial liabilities claim that these liabilities are a burden. Only a small share of those surveyed (4.1%) plan to borrow in the future, of which most will borrow for housing. One fourth of all who borrow plan to take out a loan for this purpose. In assessing changes in housing prices, households expect moderate (less than 10%) growth over the next 12 months.

The detailed Review (801.3 KB download icon) of the Survey of the Financial Behaviour of Households is published on the Bank of Lithuania’s website.

Financial stability