People in Germany lost billions in total due to price falls on the stock exchanges last year. Even the recovery at the end of 2022 could not make up for the declines of the previous quarters. The wealth of private households from cash, securities, bank deposits and claims against insurance companies was around 7.254 billion euros, well below the record value of 7.624 billion euros a year earlier, as the Deutsche Bundesbank announced on Friday in Frankfurt. The data does not show how the enormous sum is distributed.
Above all, losses on the stock exchanges after the start of the Russian war of aggression in Ukraine caused people’s assets to shrink compared to the previous year. The leading German index, the Dax, lost 12.3 percent over the year as a whole. The index for medium-sized stocks MDax even recorded a minus of 28.5 percent. However, prices recovered towards the end of the year. Compared to the previous quarter, financial assets increased by 111 billion euros in the fourth quarter, also thanks to people’s diligence in saving. According to the Bundesbank, shares in listed companies increased significantly in value by 32 billion euros.
This should have provided some relief for shareholders. According to data from Deutsches Aktieninstitut (DAI), the number of shareholders reached a record level last year. On average, 12.89 million people had shares, equity funds and/or exchange-traded funds (ETFs) in their portfolio in 2022. According to the Frankfurt institution, the previous high of 2001 (12.85 million) was slightly exceeded. However, foreign shareholders resident in Germany have also been included in the DAI statistics since 2020. That alone caused an increase of 500,000 at the time. From 2021 to 2022, the number of share savers in Germany increased by almost 830,000.
Mainly cash and bank deposits
However, a large part of the wealth of private households, totaling around 3114 billion euros, still consists of cash and bank deposits. In the fourth quarter, private households once again significantly increased their holdings by EUR 35 billion.
Cash and sight deposits, which usually include interest-free checking accounts and overnight money, are particularly popular. The advantage from the saver’s point of view: They can access their money quickly when needed. Overnight money is also increasingly yielding something again since the European Central Bank (ECB) has been raising interest rates in the fight against high inflation.
Credit institutions no longer have to pay interest when they park money with the central bank, but instead make money from it. Therefore, money houses attract new customers – with new deposits money can be made. Existing customers also get interest on call money again from many banks and savings banks, but usually less than new customers. However, the persistently high inflation eats it up again immediately. Last year, the inflation rate in Europe’s largest economy averaged 6.9 percent.
In addition, according to a recently published survey by the comparison portal Check24, people sometimes hoard large sums without interest. Almost half (47 percent) of the more than 2,000 respondents stated that they had invested more than 5,000 euros in interest-free accounts, such as current accounts, or held them as cash. “Millions of Germans are hoarding money in interest-free accounts and are thus missing out on valuable additional income,” said Lasse Schmid from Check24’s C24 Bank.
Insurance and other retirement products also remain popular. At the end of 2022 it was around 2260 billion euros. However, according to the Bundesbank, pension and insurance claims lost 21 billion euros in value due to rising interest rates in the last quarter of last year.
After deducting debt, the net financial assets of private households increased from 5,019 billion euros in the third quarter to around 5,117 billion euros at the end of 2022. Real estate is not included in the data.
