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Opinion
Stuart Trow

The More You Save, The Poorer Everyone Else Feels

Retirees aren’t putting their hard-earned savings to work. That’s a problem. 

Pile it up.

Pile it up.

Source: Bloomberg

Savings have soared during the pandemic, particular among older Europeans. Barclays Plc estimates that seniors amassed excess savings of 600 billion euros ($722 billion). This would surely provide a boost to Europe’s economy if unleashed upon the high streets. Yet most observers believe much of the cash will remain unspent.

What’s behind this hoarding? The region’s negative interest rates are supposed to deter saving and encourage spending and investment. For older savers, however, things look a bit different. Understanding how they respond when rates are so low is essential to encouraging them to put their cash to work.