bnn.lv Latviski   bnn-news.com English   bnn-news.ru По-русски
Saturday 18.01.2020 | Name days: Antis, Antons
LatviaLatvia

Bank: Latvian residents have become more active with making savings

FaceBook
Twitter
Draugiem
print
(No Ratings Yet)

topical, wages, Swedbank, savingsFollowing increased economic growth, there has been an improvement with Latvian residents’ financial reserves, according to data compiled by Swedbank. Nearly 17% of them have managed to save up money worth three or more wage amounts (2% more than last year), whereas every tenth residents’ savings reach the size of three wages. 7% of residents have no savings at all, according to data from Swedbank.

67% of Latvian residents admit their savings come close to a single average monthly wage amount. Residents also agree the savings-making discipline is gradually improving. 53% of residents say they often make savings for different purposes. 19% of them have managed to allocate more money than before in the past two years. 34% of residents have no noticed any changes with their financial freedom.

«As the economic situation improves, unemployment declines and income increases, the volume of money available to residents has increased in the past several years. Some of this money has been diverted towards making savings. According to data from surveys, one-third of households have experienced an increase of income in the past two years. Every tenth interviewed resident says the amount of available finances has increased for them. This has given residents the option to divert more money to savings (91%),» says Swedbank Insurance and Investments Office head Kristaps Kopštāls.

«It is noteworthy that the residents who have not experienced an increase of free funds because of increased expenses are still able to divert more money to savings than before (38%). This proves residents understand the importance of having savings. Both for short-term and long-term goals savings make life all the easier.»

Savings volume in Riga and regions has not changed much

More residents in Riga and Pieriga are able to afford a safety pillow. This can be explained with employment and options to earn money. Still, the situation in regions is generally similar (14% have managed to create safety pillows). Financial reserve amount has equally grown for residents of all regions (by an average of one percentage point a year).

According to data from Swedbank, the total number of people in Latvia who make savings has increased 5% this year. The difference between regions is relatively small. The biggest inequality remains for annual comparison for regions – from 9% to 28%. Generally, volumes of savings have increased in all regions. The biggest financial savings are recorded in Riga and Pieriga. Among regions, the biggest savings are registered in Kurzeme. It is noteworthy that the most rapid increase has been noted for the number of residents whose savings exceed EUR 5 000 – in Riga and Pieriga there are 36% of such residents, 26% in Kurzeme, 25% in Zemgale and Latgal, as 23% in Vidzeme. The smallest number of residents who make savings is noted in Balvi and Viļaka.

Goals and solutions for making savings

When asked what they spend money on, 47% of resident say they make savings to create a safety pillow. 26% make savings for health services, 25% want to big purchases and afford travel, 23% make savings for home or vehicle repairs, 19% make savings for pension and 18% make savings for their child’s future.

Swedbank data shows that money is more often saved on a person’s bank account (63%), which offers convenient options to access savings. Popularity-wise the next solution is using 3rd level pension plan, which is used by 32% of residents, which proves the necessity for both short and long-term financial reserves. Every tenth resident uses a savings account (12%) and accumulative life insurance (9%).

Read also: Savings of Latvian residents grew by one billion euros last year

Looking at different generations, youngsters aged 18 to 25 years more often make savings on their account (61%), 3rd level pension system (20%), which allows residents to take care of short-term and long-term needs. «One pleasant surprise is that these age groups think about savings for retirement. Young professionals aged 25 to 35 years most often save money on their account (46%) and for pension (22%),» says Swedbank.

It is worth mentioning that as low interest rates remain, there has been an increase with the interest of residents for securities.

The interest is the highest for investments in share and deposit funds. For example, the number of transactions with securities has increased more than 10% in the past year, whereas the volume has increased 50%. Although investment in securities is more popular among men (77%), we can see women are also interested in this investment solution. It is positive to see investment comprehension among residents is on a rise. They understand that low interest rates make money deposited on savings accounts to produce modest increase of deposits. Now residents are prepared to invest in ways that provide bigger profits, the bank explains.

Generally residents divert 20 to 50 euros a month to savings every month, according to data from Swedbank. When asked what they would do if they had 20 50 euros of free funds every month, 30% said they would divert money to savings, 29% would divert money to travel and 29% to health costs.

«Because the economy develops in jumps and drops – one cycle replaces the other – it is worth earning from mistakes to ensure you are more prepared for the next phase of economic decline. One such lesson is making savings in the good times to prepare for economic winter,» says the bank’s representative.


Leave a reply

FKTK lists exceptions in which banks are allowed to service Aivars Lembergs

Latvian Finance and Capital Market Commission has listed cases in which Latvia’s finance market participants will be allowed to service Aivars Lembergs, who is subjected to US OFAC sanctions and accused of serious crimes, and three organizations associated with him – Ventspils Development Agency, Business Development Association and Latvian Transit Business Association.

Appropriate jobs promised for laid-off LDz workers

Latvian State Employment Agency promises to find appropriate jobs for laid-off Latvian Railway workers. If need be, those people will be provided the opportunity for re-qualification, raise their qualification or train for a new profession, as confirmed by the agency’s representative Signe Bierande.

Bordāns selects potential candidates to lead the Supreme Court and Prosecutor General’s office

I can see people who could take the reins over the Office of the Prosecutor General and the Supreme Court and change their work standards, Latvian Justice Minister Jānis Bordāns told TV3 programme 900 seconds when asked about any potential candidates to lead those institutions.

Ukrainian Prime Minister ready quit after leaked voice recording

Ukrainian head of government Oleksiy Honcharuk has offered to resign following the circulation of an audio recording, where criticism of Ukrainian President Volodymyr Zelenskiy and his knowledge in economy is voiced.

Inflation in Latvia reportedly higher than Europe’s and Eurozone’s in December

In December 2019 inflation in Latvia was higher than the average in the European Union and Eurozone, according to information published by Eurostat on Friday, 17 January.

Estonian population growth continues in 2019 due to immigration

Estonia has registered in 2019 population growth for the fifth consecutive year and it can be explained with immigration not with natural growth, according to preliminary data released by Statistics Estonia.

BNN investigation | Raunas street property: quiet assistant with a «secret wallet» for Lembergs

There are suspicions that Aivars Lembergs, subjected to international sanctions, has sold real estate located on Raunas Street 27 in Riga to his sister «on paper only». This may have been done to avoid confiscation of properties in the event of a guilty verdict or a possible arrest over the real estate property. However, it is possible Lembergs maintains full control over this real estate property and, most likely, the property is used to fatten his wallet on a regular basis.

Audit: majority of Latvian housing stock has degraded to a state of a slum

Since the denationalization effective access to housing security in Latvia does not exist and most of the housing stock has degraded up to a state of a slum, as concluded by the Latvian State Audit.

Prime minister affirms possibility of carrying oil supplies for Belarus through Latvia

During his meeting with Belarusian President Aleksandr Lukashenko on Thursday, 16 January, Latvian Prime Minister Krišjānis Kariņš affirmed that oil supplies for Belarus may be possible using Latvia’s ports.

Rain in Australia provides relief to continuing fight against bushfires

In eastern Australia, which has been suffering in prolonged and disastrous bushfires, heavy rain has been falling for the past 24 hours.

Weather to remain warm in Latvia at week’s end

At the end of the week the sky in Latvia will become clear and the sun will shine. No precipitation is expected. However, a low atmospheric pressure area will approach the country from the west during weekends, as reported by Latvian Environment, Geology and Meteorology Centre.

GKR helps overthrow Riga’s vice-mayors and put an end to ruling coalition

Riga City Council vice-chairperson Anna Vladova and deputy Druvis Kleins lost their respective posts at an extraordinary meeting on Thursday, 16 January. This happened because multiple deputies from Honour to Serve Riga voted together with the opposition in favour of dismissing them.

Latvian Railway plans to lay off 1 500 employees

Latvian Railway plans to terminate labour relations with approximately 1 500 employees before the end of 2020, as reported by the company’s representative Ella Pētermane.

Russian State Duma approves Putin’s new Prime Minister

The Russian State Duma has approved on Thursday, January 16, the candidacy of the country’s next Prime Minister appointed by Russian President Vladimir Putin.

Ventspils opposition invites Pūce to act to prevent US sanctions from spreading to city council

Environment Protection and Regional Development Ministry and especially Juris Pūce have to act to resolve the current state of Ventsils City Council. It should be dismissed, as the municipal government does not have moral, ethical or legal foundation to continue managing and implementing the criminal management’s policy, according to Ventspils City Council opposition deputies.

Trade unions urge Latvian government to resolve transit businesses’ blocked bank accounts problem

Multiple trade unions associated with the transit industry have turned to Latvia’s highest ranking officials with a request to resolve the situation with bank accounts of multiple transit companies having been blocked because of US sanctions against Aivars Lembergs. If the government does not act, trade unions promise to organize massive protests.

Anris Leimanis picked as RB Rail council chairman

Anris Leimanis, independent council member from Latvian shareholder, has been picked as Rail Baltica joint Baltic company AS RB Rail council chairman. Ahti Kuningas and Karolis Sankovskis will serve as vice-chairmen, as confirmed by the company.

CSP: number of residents at risk of poverty declines in Latvia

In 2018 a total of 434 thousand persons or 22.9 % of the population of Latvia were at risk of poverty – 0.4 percentage points less than in 2017.

Latvian Saeima to ask Denmark to not extradite Kristīne Misāne to South African Republic

On Thursday, 16 January, Latvian Saeima made the decision to protect the rights of Latvian citizen Kristīnes Misāne, asking the Danish parliament and Danish law enforcers to support their Latvian colleagues and find a solution to avoid extraditing her to the South African Republic, as reported by Saeima’s press-service.

Smiltēns: Riga City Council’s situation can be described – divide, redistribute and plunder

«The situation in at Riga City Council can be described with three words – divide, redistribute, plunder,» said leader of Latvian Association of Regions Edvards Smiltēns in an interview to LTV programme Rīta panorama on Thursday, 16 January.

One single vote left the Lithuanian election system intact

The understanding that Lithuania’s election system needs changes is nearly overwhelming, but the ruling Farmers and Greens’ attempt to lower the Parliament election threshold in parties’ multi-member constituency from current 5 per cent to 3 per cent suffered a setback this week.

Estonian power grid executive detained over bribery suspicion

The Estonian Internal Security Service has detained a board member of the Elektrilevi power grid operator over suspicion of taking a bribe.

Demographer: Latvia has the lowest birth rate level observed the past decade

Birth rates continued to decline in Latvia in 2019. The lowest level of the past decade was reached in the country last year, says demographer Ilmārs Mežs.

Healthcare Ministry proposes single social fees rate for specialized tax regimes

One percentage point social fee rate for healthcare will be applied not only to general tax regime participants but also those working in special tax regime, such as microenterprises, patent payers and royalty recipients, according to a proposal for Latvian Healthcare Ministry.

U.S. and China reach preliminary trade agreement

Easing the U.S.-China trade conflict the governments of the two countries have agreed on the first step of mutual trade reconciliation. Their disagreements have affected the world economy for the past few years.


Do NOT follow this link or you will be banned from the site!