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The Savings Revolution
Household financial savings are making headlines today. This is hardly surprising, given that everything seems to revolve around these savings, from the financing of pensions to the development of a more sustainable economy, the very survival of old Europe and our ability to resist unbridled financial capitalism...
Whichever way you look at it, household savings, which are already very high in Europe today, are set to grow further. The ageing population, which is undermining pension systems (whether the pay-as-you-go pensions, dear to the heart of the French or Italians, or the funded pension schemes developed in other countries such as the UK or the Netherlands), is pushing households to increase their savings to protect themselves in the face of uncertainty.
At the same time, pension reforms already under way or still under discussion are pointing to longer working lives, and it is precisely in the late phase of their working lives that households save the most.
Finally, shorter-term uncertainties, such as the COVID-19 crisis, are pushing households to further increase precautionary savings, both for their own short-term needs and to prepare for future tax hikes when the cost of stimulus packages will have to be paid.
All in all, we are seeing a growth in household financial savings, and these savings are being held for longer and longer: the holding period of a life insurance policy in France already exceeds the duration of the average marriage...
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