NL residents saved a record amount last year
Despite the harsh economic downturn in 2020, many in the Netherlands were still able to save some money for their piggy bank. To be precise, 42 billion euros were added to Dutch saving accounts. That is double the amount stowed away in 2019, Dutch central bank DNB announced.
Limited opportunities to spend money due to social- and travel restrictions are seen as the main reason for the increase in savings. “The disposable income of many households stayed the same, due to governmental support, while the (partial) lockdowns and economic uncertainty led to sharp fall in consumption”, a spokesperson for the DNB said to NOS.
With limited freedom to travel, many households did not have the chance to go on vacation in the past year. “This is a rare situation because normally savings are used up during the second half of the year for vacations, holidays and extra mortgage repayments.”
Overall, the Dutch have around 487 billion euros stored in the bank.
During the pandemic, many independent business owners and entrepreneurs lost a large part of their income. “The hospitality, recreational and culture sectors were hit the hardest”, says ING chief economist, Marieke Blom.
She notes that households with generally higher incomes are more likely to put money on their savings account. “If you give everyone 100 euros, then people with a good income will mainly put it in the bank. Lower-income households are more likely to quickly spend it immediately. The money is actually wrongly distributed.”
The question is if households will spend their savings again once the pandemic is over. “If that happens then it will give the economy a quick boost”, Blom said. “You saw last summer that people were willing to spend money again in these sectors as soon as it was possible. We think that the economy will quickly recover as soon as restrictions lift.”