A survey of residents conducted by the “Luminor” bank shows that more than a third of the population could survive for up to two months with their savings, while half would only survive a month. According to the head of “Luminor” business development in the Baltic, Jekaterina Ziniča, 24% of respondents have savings for a period of 3 to 6 months, while around 20% for over six months.
The best situation with savings is for residents of Riga and Pierīga with higher education, but it is worse in Kurzeme, where a third of respondents do not have savings.
Overall, over the last two years of the pandemic, savings in bank accounts have increased and this means that people are spending less daily, as well as surveys have revealed that more and more people are considering the idea of saving, says Ziniča: “2021 has not been an exception and for more than a decade the Latvian population continues to build savings and total savings are growing year after year."
However, in order to save one to two wages, it is necessary to save up to two years.
Kārlis Purgailis, Chairman of the Board of the subsidiary of Citadele Bank, CBL Asset Management, says that the savings of Citadele clients have increased by more than 15% last year. Most of the savings are made in deposits in bank accounts.
"But given the fact that there are currently zero rates for both savings accounts and fixed-term deposits, we see a tendency to make more savings in billing and card accounts. Savings in savings accounts and fixed-term accounts are declining. A positive trend is also that clients have increased investments related to financial markets, such as pension level 3, life insurance, as well as investment funds, shares, bonds."
The fact that the majority of Latvian residents do not have savings at all or sufficient for a relatively short period of time is also confirmed by the data of the survey conducted by Swedbank Financial Institute. The Institute's expert, Evija Kropa, says that for the majority of customers with savings, this would be enough for one month if they lost all their income. However, the size of stocks also goes hand in hand with higher wages, higher education, and maturity.
"For young people, savings are much smaller. [..] The people of Latvia have to work with the habit of saving. I don't think our grandmothers and grandfathers are the most wealthy, able to save because they have a lot of money. I don't think so. It's a story of habits and priorities," Kropa said, adding that the average amount of savings accumulated by seniors is often higher than that of the working-age person.
While looking back at 2021, the figures from the Swedbank Institute of Finance survey show that they spent more than accumulated, Kropa says. 25% of respondents acknowledged that the financial situation in the family improved last year, while 36% said that it had deteriorated. Although last year the average wages have increased, creating favorable soils for stockpiling, the situation varies across layers of society and the pandemic has increased the gap between wealthy and less wealthy people.