Survey: More Than Half of Estonians' Savings Still Unprotected Against Inflation
More than half, specifically 57% of Estonians keep their savings in a conventional bank account, where they essentially earn no interest and are therefore unprotected against inflation, according to a recent survey conducted by Kantar EMOR.
Jonna Pechter, the head of Bigbank Estonia, who commissioned the survey, believes that in the inflationary environment of recent years, awareness of the need to manage savings wisely has indeed increased, but we are still far from ideal. "The good news is that more than four-fifths of people have accumulated savings, but the worse news is that more than half of them do not actively manage their money," comments Pechter.
Of those surveyed, 82% confirmed that they have accumulated savings, while 18% admitted they have no savings. Just under one-sixth have savings below 1,000 euros, and more than one-third have a total amount below 5,000 euros. Equally, 14% of people have savings of 5-10 thousand euros, 10-25 thousand euros, or over 25 thousand euros respectively.
The most common reason given for why money has not been placed in a savings or investment account instead of a checking account or cash is the interest rate being too low. "It is completely understandable that earning about 3% per year may seem modest at first glance, but at the same time, everyone should realize that this is still 3% more than nothing. In reality, inflation eats away at these idle savings in exactly the same way with small percentage increments," emphasizes Pechter, and adds that respondents who use Bigbank's respective products highlighted the high interest earned by as many as four-fifths of them.
"The differences in attitudes toward savings products primarily reflect experience or the lack thereof," says Pechter, who notes that 27% of respondents who do not have a savings account cited as the reason that they prefer to have quick access to their savings, and 26% that they do not know enough about these products. "The overlap seems quite logical here, as one common feature of the savings account product offered by different banks is that money can be put back into use quickly, within just a few days," Pechter provides an example of consumers' limited awareness.
