Survey shows: Pension provision is no longer a top priority: Swiss savers are increasingly investing in emergency reserves

This situation emerges from a representative research on “savings and investment” conducted by the market research institute Intervista on behalf of Migros Bank. The results are available only to Blick. As in the last survey in 2021, the third most important reason for saving is home ownership.

The time horizon when it comes to savings has shortened significantly. The priority is to make reserves available quickly in the face of increasing costs and global uncertainties. This is also reflected in the fact that savings accounts are becoming more important in Swiss households. Risky investments (e.g. cryptocurrencies such as Bitcoin) have become significantly less attractive despite their current high levels.

The increasing importance of a financial cushion shows that many people are worried about the future. The Swiss are becoming increasingly pessimistic about the country’s economic development. In 2019, 29 percent thought the economy was quite bleak, but by the fall of 2023, this figure had already increased to 39 percent. 27 percent say their financial situation has worsened in the last two years. “Savings are more important than ever for the population. “People are arming themselves with an emergency fund for an uncertain environment,” says Manuel Kunzelmann (49), CEO of Migros Bank.

“Savings are essential”

In fact, despite increasing cost pressures, six in seven respondents say they regularly put things away. Kunzelmann: “Switzerland is a country of savings.” According to the survey, 60 percent of those who put something aside have no more than 1,000 francs a month. The largest share, 27 percent, consists of contributions between 100 and 500 francs. The survey does not answer definitively whether it is generally possible to save less due to cost pressures. However, Kunzelmann says it has been noticed that smaller sums of up to 100 francs are increasingly being paid.

Pascal Pfister (47), Managing Director of Debt Advice Switzerland, assumes that the Swiss have been able to save less lately. He is not as positive as the bank boss, who said that despite cost pressures, six in seven respondents still regularly set aside money: “If one in seven people’s income is just enough to cover their monthly expenses, this is not true but a good sign.” “Saving for unexpected expenses is so important—people shouldn’t have to pay dental bills or deductibles with a loan,” Pfister continued.

So-called consumer loans are quite common in Switzerland: 125,000 such loans with a total amount of over 4.5 billion francs were issued in 2022 alone, SRF reported this week. Since the interest on such freely available consumer loans is currently around eight percent, borrowers incur correspondingly high additional costs.

Pfister predicts that even more people will fall into debt in the coming years due to the high cost of living. «It’s a good thing that unemployment is low right now. Otherwise the debt risk will increase significantly,” says the managing director of Debt Advice Switzerland.

The financial pressure on the population becomes visible in the Swiss budget consultancy. Requests for personal advice have increased significantly, says managing director Philipp Frei. Advisory teams have already reached capacity and long waiting lists must be maintained.

The belt is tightening

“Investigations are becoming more emotional because many people cannot help it if they fall into financial difficulties: the spending behavior is the same, but because prices are rising, they end up with less money in their wallets,” says Frei. The human fate that can be seen behind the requests for advice is close to the advice teams: “We now encounter desperate people who cannot afford the costs of their daughter’s birthday party or their rent.”

According to Frei, budget advisors don’t just consult needy, low-income people. In particular, as query statistics show, online quotation with budget calculator is increasingly used by medium-sized businesses. “Even for people with good wages, optimizations are now needed so that there is a reserve at the end of the month,” says Frei. According to him, sensitivity towards conscious use of available resources is generally increasing.

Migros Bank CEO also observes this. “We are paying even more attention to our finances, especially when the overall situation seems uncertain.”

It is therefore understandable that the survey shows that savings are still seen as important. “The Swiss are ready to tighten their belts when it comes to consumer spending,” says Kunzelmann.