Study warns savings lose value without investment

Four in five people in Styria say saving is important, but money left in current accounts or held as cash can lose value to inflation, a savings study reported by ORF on Tuesday says. People in the Austrian state save an average of €296 a month.

Savings accounts and passbooks remain the most popular ways to put money aside, despite the range of investment options. The study found that 92% of people save for emergencies and 78% for financial security. Larger purchases and travel are also common goals.

Oliver Kröpfl, a board member of Steiermärkische Sparkasse, said money kept without earning interest was losing value. He estimated that a sum in the tens of billions of euros in Styria was held in bank current accounts or as cash at home.

With World Savings Week approaching, the bank’s chief executive, Georg Bucher, said the campaign would be used to highlight investment in securities. He also called for greater emphasis on financial education in schools.

According to Bucher, 37% of people in Styria already invest in shares or investment funds to build long-term wealth, particularly for retirement. He said regular investments of €70 a month by people aged 20 to 25 could grow to six-figure sums over 20 to 30 years. He said equity funds and mixed bond funds could deliver returns above inflation.