Brits Emerge as Europe’s New Savings Champions

 

• After record deposit inflows of GBP 81 billion in the first half of 2021, British savers have now propelled ahead of their counterparts in Germany
• Meanwhile, savers from the eurozone are now growing their bank balances at a slower pace than at the beginning of the Covid-19 pandemic
  
• The continued growth of deposits in Europe will increase demand for more product choice and transparency
  

 

British savers put more money aside in their bank accounts during the first half of 2021 than they ever have in a single half-year, according to a new report from borderless savings pioneer, Raisin DS. The report finds that an injection of GBP 81 billion in retail deposits over the first half of 2021 has now placed British savers ahead of their counterparts in the eurozone, where deposit inflows have fallen back to pre-pandemic levels after spiking in 2020.

In the UK, deposits have grown at an accelerated pace since the start of the Covid-19 pandemic, with savers increasing their bank balances by 17% between June 2020 and June 2021. More importantly, British savers have shown no signs of slowing down even after the easing of Covid-19 restrictions in the country. In fact, deposit inflows in the UK increased by an extra 5% over the first half of 2021 compared to the same period in the previous year.

“Savers from the UK have been putting more and more money aside since the Covid-19 crisis began, and have now displaced their German counterparts as the biggest savers in Europe,” says Dr Tamaz Georgadze, Co-CEO of Raisin DS. “However, British savers are in the same boat as their European neighbours, earning little to no interest on their savings. With inflation on the rise and the continent gradually opening up, people may find it more difficult to save as much as they did before. At the same time, we expect them to begin searching for ways to make their hard-earned money stretch the extra mile.”

In comparison to British savers, who grew their bank balances by nearly GBP 1237 each in the first half of 2021, savers from the euro-area only grew theirs by GBP 691 per capita in the same period. The report finds, however, that deposit inflows are spread out unequally in the region, with savers from Southern eurozone economies trailing behind Central European countries, as well as the regional average.

Out of the six largest economies in the euro area, France was the only country to show a downward trend, with net inflows shrinking by 4% to 105 billion GBP compared to the beginning of 2021. However, per capita increases in the first half of the year were still higher than in Germany, the eurozone’s biggest deposit market.

“After experiencing the largest year-end inflows since the global financial crisis of 2008, deposits have returned to pre-pandemic levels in the euro-area. However, with net inflows of GBP 236 billion in the first half of 2021, it is clear that deposits continue to play an important role in the region,” adds Tamaz.

“As savers from the eurozone continue to grow their savings in a negative-rate environment, we expect an increase in demand for secure and competitive interest-bearing products. At the same time, these savers are taking more control over their financial futures, thanks to open banking innovations that provide them with the choice and transparency they are hungry for. For banks in the region, it is therefore important to see whether they would want to provide a solution for their customers themselves, or through third parties.”