A recent study by the German Savings Banks Association (DSGV) has revealed that a net income of €3,600 is now considered the poverty line in Germany. This means that households with this income have no money left at the end of the month. The study also found that due to high inflation and exploding energy prices, 60% of households are no longer able to save any money. Instead, they are using their savings to cover their living expenses.
According to Liane Buchholz, President of the Westphalia-Lippe Savings Bank Association (SVWL), many households are struggling to keep up with the rising costs of living. “At the end of the month, there is nothing left, and many are also using their savings,” she said. This trend is not limited to low-income households, as even those with solid incomes are affected. “We are talking about households with an income of up to €3,500 per month after taxes,” Buchholz added.
The situation is also affecting people’s ability to save. According to data from the Volksbank Wiesbaden, customer savings grew by less than 1% in 2022. Matthias Hildner, CEO of the bank, attributed this to inflation. “Many people are heavily burdened by inflation and rising energy prices,” he said. The impact is also evident in the data from 20 savings banks in Rhineland-Palatinate, where the formation of financial assets through traditional deposits and securities savings has decreased by 37% between November 2021 and November 2022.
This economic situation is having a significant impact on households, particularly those with low incomes. Thomas Hirsch, President of the Savings Banks Association in Rhineland-Palatinate, noted that this is affecting their ability to save for retirement and their consumption habits. “Whether it’s finances, consumption, or retirement planning, households with low incomes have to make greater sacrifices,” he said. The study highlights the urgent need for measures to address the rising costs of living and inflation in Germany.
