According to a survey, the gas crisis and high inflation in Germany are forcing many people to do without in everyday life, the shopping basket is becoming emptier. At the same time, the high rate of inflation is eroding savings and the dream of owning your own four walls is becoming a distant prospect for many in view of the rise in construction interest rates and high costs. "Getting along with your income is the motto for the clear majority of German private households for the next three years," said the President of the German Savings Banks and Giro Association, Helmut Schleweis, on Tuesday.

Consumption: According to the DSGV survey, 57 percent of consumers have already reduced their consumption in the past twelve months. "Around 90 percent of those surveyed are concerned about inflation," reported Schleweis. 46 percent of the survey participants stated that they want to limit themselves beyond the previous measures in the future. In a follow-up survey in October, it was even more than half (54 percent). A total of more than 4800 people were interviewed, the main survey took place in the summer.

The sharp increase in the inflation rate, which reached 10.0 percent in September, hit people with lower incomes particularly hard. 83 percent of those surveyed with a net household income of less than 1,000 euros stated that they had had to do without everyday things in the past few months. For 40 percent it was a major waiver.

Concerns also in the middle class

But even those who earn more are worried. "The pressure is also affecting the middle class, which has so far made ends meet comparatively well and was not dependent on state transfer payments," reported Schleweis. According to their own statements, 58 percent with a net household income of 2,500 euros and more had to cut back, albeit mostly to a small extent.

Saving: According to DZ Bank, the sharp rise in inflation is making it more difficult for households with low incomes in particular to save money. "On the other hand, the high level of uncertainty means that private households are becoming more cautious, holding back on larger purchases such as furniture or a new car and taking more precautions - behavior that can be observed again and again in crises," analyzed DZ economist Michael Stappel.

In his estimation, the savings rate this year will fall sharply compared to the exceptional years 2020 and 2021, but will be slightly higher than in 2019. According to the Federal Statistical Office, private households saved an average of 11.10 per 100 euros of disposable income in the first half of the year euros on the side. At 11.1 percent, the savings rate was roughly at the level of the pre-Corona year 2019. During the pandemic, many people had more money left over than in normal times, for example because vacation trips were canceled and leisure facilities were temporarily closed. In the first half of 2021, the rate had risen to a record 18.2 percent due to the restrictions.

Interest rate clearly in the red

Banks and savings banks are now feeling their way up when it comes to interest rates on savings. The bottom line is that investors are currently making a loss because of the high inflation. "At 10 percent inflation, the real interest rate is clearly negative. That's worse than in earlier periods of negative interest rates," explains Schleweis. The real interest rate is the interest rate on savings deposits after deducting the rate of inflation.

Real estate: According to the Savings Banks Association, the desire to have one's own four walls is still high. But many don't have the money for it. In the survey in October, only 26 percent of people between the ages of 20 and 50 said they wanted to buy their own home. Equity is often lacking. "The dream of owning a home must be made easier through targeted subsidy programs," Schleweis demanded.

BVR notification and other material September 27, 2022 Bundesbank on financial assets Q2/2022 Financial assets long series Time series Federal Statistical Office on the savings rate Time series key interest rates of the ECB Federal Statistical Office on inflation in Germany Press page DZ Bank Federal Office notification DSGV DSGV asset barometer