Household savings are the main domestic source of
funds to finance capital investment, which is a major driver of long-term economic
In the national accounts, household savings are
estimated by subtracting household consumption expenditure from household disposable
income and by adding the change in net equity of households in pension funds (since
this component is also a determinant of household disposable income but with an
Household disposable income consists essentially of
income from employment and from the operation of unincorporated enterprises, plus
receipts of interests, dividends and social benefits minus payments of income taxes,
interest and social security contributions. Enterprise income includes imputed rents
paid by owner-occupiers of dwellings.
Household consumption expenditure consists mainly of
cash outlays for consumer goods and services. It also includes the imputed
expenditures that owner occupiers pay, as occupiers, to themselves as owners of their
dwellings and the production of goods such as agricultural products for own-final use.
Household saving rates may be measured on either a
net or a gross basis. The net saving rates shown here are measured after deducting
consumption of fixed capital (depreciation), in respect of assets used in enterprises
operated by households and in respect of owner-occupied dwellings. This consumption of
fixed capital is deducted from both savings and the disposable income of households.
Households include households plus non-profit
institutions serving households. The household saving rate is calculated as the ratio
of household savings to household disposable income (plus the change in net equity of
households in pension funds).
Data are compiled according to the 1993 System of National Accounts (SNA).
Because savings are a residual between two large aggregates (household
disposable income and household consumption expenditure), both of which are subject to
estimation errors, measures of household savings are also subject to large errors and
to revisions over time.
Data for Australia (which are compiled according to
the 2008 SNA) and New Zealand refer to fiscal years.
Household saving rates differ significantly
across countries. In 2010 or the most recent available year (2009 in most cases),
saving rates of above 10% were recorded in Austria, Belgium, France, Germany,
Ireland, Slovenia, Spain, Sweden, Switzerland and the Russian Federation. Savings
rates were negative in Denmark, Greece, New Zealand, and South Africa. Of the 29
countries where data is available for 2009, 23 countries saw increases in their
savings rate compared to 2008.
These differences are partly due to
institutional differences between countries. These include the extent to which
old-age pensions are funded by government rather than through personal savings,
and the extent to which governments provide insurance against sickness and
unemployment. The age composition of the population is also relevant, as the
elderly tend to run down financial assets acquired during their working life. This
implies that a country with a high share of retired persons will usually have a
low household saving rate.
Over the last 10-15 years covered in the graph,
household saving rates have decreased markedly in Japan and, to a much lesser
extent, in Canada. Rates have remained broadly stable in Germany and France. The
United States saw its household saving rate fall from 1996 to around 2006; after
that year, the household saving rate started to pick up and is now above its 1996