After earning a reputation as impulsive buyers and Europe's biggest spenders, a growing number of Russians are proving they have learned important lessons regarding savings, investing and preparing for retirement. The recent economic recession has changed not only the spending habits, but also the saving habits of millions of Russians, a new survey found. Russians are saving en-masse a far cry from just a few years ago, when many consciously embraced a lavish lifestyle to compensate for the pent-up demand that existed in the Soviet era.
For the first time in 20 years, a majority of Russians about 70 percent said they have cultivated the habit of saving to secure their future, according to a March survey by Romir, a market research firm. Among residents of cities with over a million people, 86 percent said they had savings, while 72 percent of those living in villages and 62 percent of residents in cities with a population of 100,000 to 500,000 people said they had money stashed away. "The result can be explained as an objective indication of an improvement in the economic situation in the country, as well as psychological changes in behavior," Romir researchers said in their report. They added "it is no longer fashionable to complain about one's difficult material conditions like two to six years ago."
Only 33 percent of Russians with low per capita income, 23 percent in the middle income group and 14 percent in the high income bracket said they had no savings at all. "A lack of savings in some households with high levels of per capita income can be attributed to the recent expenses on high ticket items such as real estate, home improvements, or luxury cars," said the researchers. About 35 percent of respondents said they favor the purchase of real estate as a means of saving compared with 50 to 60 percent four to ten years ago, Romir said. However, a more credible explanation may be that high-income households prefer to save their money abroad, Kommersant Daily wrote on Tuesday. Last year, Russian citizens pulled out $18 billion from private bank accounts in Russia, according to the Central Bank.
However, Romir's findings run counter to recent figures released by the Central Bank and the Federal State Statistics Service that indicate that the propensity to save among Russians is declining. While Russian households saved 10.9 percent of their incomes in January, only 7.1 percent did so in February, figures from Rosstat and the Central Bank showed. Economists said the official figures appear to confirm a growing tendency to save even while the amount being saved by individual households is shrinking.
The number of Russians with savings in rubles has also gone up to 60 percent from 30 percent in 2004. Russians basically lost confidence in the ruble after Russia defaulted on its debt in 1998, sending the national currency into a nosedive. But the findings also contradicted figures from the Central Bank, which showed that the share of the ruble in total bank deposits dropped from 26 percent at the beginning of 2010 to 18 percent at the beginning of 2012.
Though savings are on the rise, Russian consumers are still cautious. Consumer confidence is relatively low compared to the global average, but ranks among the highest in Europe. About 25 percent of Russians said that their financial situation has worsened over the past several months, according to a consumer confidence index for the first quarter released by Rosstat last week. The majority of respondents in the Rosstat survey said they have shelved plans for major purchases, indicating that most Russians have become rather apprehensive about likely changes in the economy. A gloomy outlook on the economy might have fueled the tendency to save for the rainy day, analysts say.
But plenty of other factors may have been feeding this trend as well. Wages have been rising and many Russians now say they receive various state allowances, such as basic and extended child allowances and unemployment benefits that were not available previously. About 15 percent of the Russian populace now identify themselves as middle class up from 11 percent in 2009 with incomes ranging from $20,000 to $30,000 per annum, according to a study published on Monday by the Center for Strategic Studies (CSS). Last year, 15 million households or 29 percent of the population, reported an income of about $20,000, giving them extra incentive to save, the study showed.
Keywords: Russia, Economy, Banks - Russian News - Russia
After earning a reputation as impulsive buyers and Europe's biggest spenders, a growing number of Russians are proving they have learned important lessons regarding savings, investing and preparing for retirement. The recent economic recession has changed not only the spending habits, but also the saving habits of millions of Russians, a new survey found. Russians are saving en-masse a far cry from just a few years ago, when many consciously embraced a lavish lifestyle to compensate for the pent-up demand that existed in the Soviet era.
For the first time in 20 years, a majority of Russians about 70 percent said they have cultivated the habit of saving to secure their future, according to a March survey by Romir, a market research firm. Among residents of cities with over a million people, 86 percent said they had savings, while 72 percent of those living in villages and 62 percent of residents in cities with a population of 100,000 to 500,000 people said they had money stashed away. "The result can be explained as an objective indication of an improvement in the economic situation in the country, as well as psychological changes in behavior," Romir researchers said in their report. They added "it is no longer fashionable to complain about one's difficult material conditions like two to six years ago."
Only 33 percent of Russians with low per capita income, 23 percent in the middle income group and 14 percent in the high income bracket said they had no savings at all. "A lack of savings in some households with high levels of per capita income can be attributed to the recent expenses on high ticket items such as real estate, home improvements, or luxury cars," said the researchers. About 35 percent of respondents said they favor the purchase of real estate as a means of saving compared with 50 to 60 percent four to ten years ago, Romir said. However, a more credible explanation may be that high-income households prefer to save their money abroad, Kommersant Daily wrote on Tuesday. Last year, Russian citizens pulled out $18 billion from private bank accounts in Russia, according to the Central Bank.
However, Romir's findings run counter to recent figures released by the Central Bank and the Federal State Statistics Service that indicate that the propensity to save among Russians is declining. While Russian households saved 10.9 percent of their incomes in January, only 7.1 percent did so in February, figures from Rosstat and the Central Bank showed. Economists said the official figures appear to confirm a growing tendency to save even while the amount being saved by individual households is shrinking.
The number of Russians with savings in rubles has also gone up to 60 percent from 30 percent in 2004. Russians basically lost confidence in the ruble after Russia defaulted on its debt in 1998, sending the national currency into a nosedive. But the findings also contradicted figures from the Central Bank, which showed that the share of the ruble in total bank deposits dropped from 26 percent at the beginning of 2010 to 18 percent at the beginning of 2012.
Though savings are on the rise, Russian consumers are still cautious. Consumer confidence is relatively low compared to the global average, but ranks among the highest in Europe. About 25 percent of Russians said that their financial situation has worsened over the past several months, according to a consumer confidence index for the first quarter released by Rosstat last week. The majority of respondents in the Rosstat survey said they have shelved plans for major purchases, indicating that most Russians have become rather apprehensive about likely changes in the economy. A gloomy outlook on the economy might have fueled the tendency to save for the rainy day, analysts say.
But plenty of other factors may have been feeding this trend as well. Wages have been rising and many Russians now say they receive various state allowances, such as basic and extended child allowances and unemployment benefits that were not available previously. About 15 percent of the Russian populace now identify themselves as middle class up from 11 percent in 2009 with incomes ranging from $20,000 to $30,000 per annum, according to a study published on Monday by the Center for Strategic Studies (CSS). Last year, 15 million households or 29 percent of the population, reported an income of about $20,000, giving them extra incentive to save, the study showed.