Statistics Explained

Households - statistics on disposable income, saving and investment


Data extracted in June 2022.

Planned update: June 2023.

Highlights

Wages accounted for 35.6 % of the EU’s household disposable income in 2020, and social benefits for 26.9 %.

In 2020, the household saving rate was 18.3 % in the EU and 19.4 % in the euro area.

The EU’s household investment rate was 8.4 % in 2020, with double-digit rates recorded in Germany, Luxembourg, the Netherlands, Finland and Cyprus.

[[File:Households - statistics on disposable income saving and investment-interactive_NA2022_I.xlsx]]

Gross household saving rate, 2010–2020

This article focuses on disposable income, saving and investment for households in the European Union (EU) and the euro area; note that there are complementary articles that provide information for financial assets and liabilities for households, for financial assets and liabilities of non-financial corporations and the distribution of profits and investment for non-financial corporations.

This article presents Eurostat statistics derived from European sector accounts, which form part of the European system of national and regional accounts (ESA 2010). Data are provided for the EU and the euro area, as well as for individual EU Member States, EFTA countries and Serbia for the latest reference year available and for developments over the previous 10 years.

The time period covered by the analyses in this article is 2010 to 2020. When looking at developments during this period, it should be remembered that the global financial and economic crisis had a major impact on economies and societies in 2008 and 2009. As such, the starting point for the time series that are presented is a year with a relatively low level of economic activity, as some signs of recovery were observed. Equally, the time series ends at the onset of the COVID-19 pandemic, which also had a major impact on economies and societies.

Full article

General overview

This article provides a range of analyses of issues that impact on people’s everyday lives, detailing levels of gross household adjusted disposable income that is available for households to manage their budget. Overall household spending and/or saving are closely linked to general macroeconomic developments, including among other factors, real wage growth, inflation and the risk of unemployment. Note that data presented in this article cover both the household sector and non-profit institutions serving households (NPISH); the latter form a relatively small institutional sector that includes charities, trade unions, religious and political groups.

Gross disposable income is the result of all current transactions before consumption, excluding exceptional resources/uses such as capital transfers, holding gains/losses and the consequences of natural disasters. It reflects the net resources, earned during the period, which are available for consumption and/or saving; in this article – unless otherwise stated – it is adjusted to take account of social transfers in kind. Adjusted gross disposable income includes the flows corresponding to the use of individual services which households receive free of charge from the government; these mainly include education, health and social security services, as well as housing, cultural or recreational services.

Gross household adjusted disposable income

The EU’s gross household adjusted disposable income was valued at €10 270 billion in 2020, which was equivalent to just over three quarters (76.8 %) of the value of gross domestic product (GDP). Germany accounted for the highest share of the EU’s gross household adjusted disposable income, 25.7 % of the total, followed by France (18.8 %) and Italy (13.2 %).

Figure 1 shows information for gross household adjusted disposable income per inhabitant during the period 2010 to 2020. Note that the series has been adjusted for changes in population numbers from one year to the next (as a result of natural change and change that may be linked to migration). The most striking aspect of Figure 1 is the reduction in gross household adjusted disposable income per inhabitant as a result of the global financial and economic crisis. This was especially apparent in real terms over several years: changes in the standard of living enjoyed by many people living in the EU and the euro area remained negative during 2010, 2011, 2012 and 2013. Thereafter, there was an upturn in economic fortunes in both the EU and the euro area, with gross household adjusted disposable income per inhabitant increasing in both nominal and real terms. In 2020, the first year of the COVID-19 crisis, the rates of change remained positive, although considerably lower than in recent years: the real rate of change for the EU dropped from an increase of 2.0 % in 2019 to an increase of 0.4 % in 2020.

Figure 1: Developments for gross household adjusted disposable income per inhabitant, 2010–2020
(%)
Source: Eurostat (nasa_10_ki)

Gross household adjusted disposable income per inhabitant in Luxembourg was 2.3 times as high as in Croatia

To compare gross household adjusted disposable income per inhabitant across countries effectively, an adjustment should be made to take account of price level differences. To do so, data are converted into purchasing power standards (PPS).The presentation in Figure 2 is based on data in PPS, but with the values then converted to a ratio between the values for each EU Member State and the EU average, with the ratio for the EU average set to equal 100. Figure 2 shows that, in 2020, gross household adjusted disposable income per inhabitant varied substantially between Member States. In Luxembourg, the average level of gross household adjusted disposable income per inhabitant was 2.3 times as high as that recorded in Croatia (no data are available for Bulgaria, Malta or Romania). Note however that a similar comparison for 2010 – just 10 years earlier – reveals that gross household adjusted disposable income per inhabitant in Luxembourg had been 2.9 times as high as in Latvia (see Table 2 in the annex). Note that, for comparability, this ratio for 2010 was compiled for the same Member States for which 2020 data are available; if Bulgaria is included, for which 2010 data are available, the ratio between the highest (still Luxembourg) and lowest (Bulgaria) values was 3.7.

In 2020, the highest level of gross household adjusted disposable income per inhabitant was recorded in Luxembourg (51.4 % above the EU average having taken account of price level differences), while Germany (28.9 %) was the only other EU Member State (no information available for Bulgaria, Malta or Romania) to report a level of gross household adjusted disposable income per inhabitant that was more than one fifth above the EU average; this was also the case for Switzerland and Norway.

By contrast, there were seven EU Member States where the average level of gross household adjusted disposable income per inhabitant was more than 20 % below the EU average. Among these Member States, the lowest levels of gross household adjusted disposable income per inhabitant in 2020 were recorded in Hungary (68.7 % of the EU average), Latvia (68.4 %), Slovakia (66.1 %), Greece (65.3 %) and Croatia (64.7 %).

Figure 2: Gross household adjusted disposable income per inhabitant, 2020
(EU = 100, based on data in PPS)
Source: Eurostat (nasa_10_nf_tr)

The share of net wages in the EU’s gross household adjusted disposable income fell to 35.6 % in 2020, down from a peak of 36.8 % in 2019

Figure 3 provides an analysis over time as to the different contributions that were made by the various components that together make up gross household adjusted disposable income. In the EU, net wages (which consist of wages and salaries received by employees before tax, excluding social contributions paid by employers and employees) consistently accounted for the highest share of gross household adjusted disposable income between 2010 and 2020. The share of net wages was just over one third (within the range of 34.1 % to 36.8 %). The relative share of net wages in gross household adjusted disposable income was at its lowest level, as may be expected, during the financial and economic crisis in 2010 and peaked in 2019. The share increased almost every year during the period shown, the only notable fall being in 2020, impacted by the COVID-19 crisis.

Mixed income of households relates to the profits of unincorporated enterprises and represents remuneration for work that is carried out by self-employed persons or members of their family; gross operating surplus accrues from renting or owning a dwelling. As with net wages, the contribution from these components to EU gross household adjusted disposable income fell during the global financial and economic crisis. This share remained low in 2010 and increased slightly in 2011 to reach 20.7 %, before stabilising in a range of 20.2 % to 20.6 % for several years. In 2019, the share dipped to 20.0 % and then fell to 19.4 % in 2020, the lowest share for this component throughout the period studied.

The second largest contribution to gross household adjusted disposable income was from social benefits (other than social transfers in kind). These include the following: payments from social security funds (such as pensions or child support); social assistance from government or non-profit institutions serving households; privately-funded social benefits such as those made by insurance companies. The share of social benefits in EU gross household adjusted disposable income rose from 24.5 % in 2010 to 25.3 % in 2013, 2014 and 2015. Thereafter, the contribution of social benefits to EU gross household adjusted disposable income fell back modestly and was 24.9 % in 2019. The impact of the COVID-19 crisis can again be seen, as this share rose to 26.9 % in 2020, the highest share for this component throughout the period studied.

In the years following the global financial and economic crisis, the share of social benefits in kind drifted up from 17.3 % in 2011 to 17.8% in 2016 and then stayed around this level. Impacted by the COVID-19 crisis, the share rose from 17.8 % in 2019 to 18.3 % in 2020.

Unlike the other components which add to gross household adjusted disposable income, the level of income is reduced by taxes paid; for this reason taxes are shown as negative values in Figures 3 and 4. The negative share of EU gross household adjusted disposable income that was accounted for by taxes fell during the global financial and economic crisis. Thereafter it increased steadily, expanding from -13.0 % of income in 2010 to -14.9 % by 2019. In 2020, the negative share accounted for by taxes fell, reflecting the fall in net wages during the first year of the COVID-19 crisis.

Figure 3: Contribution to gross household adjusted disposable income, EU, 2010–2020
(%)
Source: Eurostat (nasa_10_nf_tr)

A similar analysis is presented in Figure 4 which details the contributions of the various components to gross household adjusted disposable income in the EU Member States and some non-member countries, focusing on 2020.

Net wages and gross operating surplus and mixed income together accounted for 55.1 % of gross household disposable income in the EU in 2020, while the combined share of social benefits and social transfers in kind was 45.3 %. Looking in more detail at the individual EU Member States, there were considerable variations in terms of the contributions made by each component to gross household adjusted disposable income. In 2020, net wages and gross operating surplus and mixed income together accounted for 74.7 % of disposable income in Denmark, 68.5 % in Latvia and 67.5 % in Ireland. By contrast, this share was less than half of the total in Germany (48.7 %) and was just over half (50.8 %) in the Netherlands. Net wages were valued 7.7 times as high as the gross operating surplus and mixed income in Sweden, 5.9 times as high in Estonia and 5.4 times as high in Denmark. By contrast, in Italy, Poland and most notably in Greece, the value of the gross operating surplus and mixed income was greater than the value of net wages.

With the exception of Italy, Hungary and Latvia, the relative weight of social benefits in gross household adjusted disposable income in 2020 ranged from 19.5 % to 29.5 %. In Latvia (17.0 %) and Hungary (17.1 %) the share was somewhat lower, while in Italy it was higher (31.6 %); it was higher still in Switzerland (32.8 %).

Social transfers in kind accounted for 12.4 % of gross household adjusted disposable income in Latvia in 2020, the lowest share among the EU Member States; a slightly lower share was reported in Serbia and a much lower one in Switzerland. Shares below the EU average were reported in all of the other eastern, southern and Baltic Member States, as well as in Austria and Germany. Above average shares were observed in the remaining western and Nordic Member States, the share exceeding 25.0 % in the Netherlands, Denmark and Sweden.

Figure 4: Contribution of the components to gross household adjusted disposable income, 2020
(%)
Source: Eurostat (nasa_10_nf_tr)

Figure 5 shows the contribution from a number of different components to the overall change in gross household adjusted disposable income between 2010 and 2020; note these changes are based on information in current prices. On this basis, EU gross household adjusted disposable income rose overall by 22.7 % during the most recent decade for which data are available. The largest contributions were made by net wages (contributing 9.6 percentage points of the overall change), social benefits (8.5 percentage points of the overall change), social transfers in kind (5.0 percentage points of the overall change) and gross operating surplus and mixed income (3.5 percentage points of the overall change); taxes made the largest negative contribution (-4.7 percentage points of the overall change).

In a majority of EU Member States (incomplete data for Bulgaria, Malta and Romania), the main contributing factor to the development of their gross household adjusted disposable income was net wages. In Belgium, Spain, France, Italy and Poland, the main factor was the increase in gross social benefits; this was also the case in Norway and Switzerland. In Cyprus, the largest contributing factor was the change in the gross operating surplus and mixed income. Greece was an exception, in that the overall change in gross household adjusted disposable income was negative, as was the case for all of the components. The largest negative contribution to Greece’s overall negative change was gross operating surplus and mixed income.

Figure 5: Contribution of the components to the change in gross household adjusted disposable income, 2010–2020
(%)
Source: Eurostat (nasa_10_nf_tr)

Household saving rate

During periods of economic uncertainty, household saving rates may be expected to increase, as households tend to save more when the risk of losing a job rises and they may defer expenditure on some or many non-essential goods and services (for example, the purchase of a new motor vehicle or a family holiday) until the economic situation improves. The household saving rate is defined as gross household saving divided by gross disposable income, with the latter being adjusted for changes in net equity of households in pension fund reserves.

Households in the EU saved close to one fifth of their disposable income

Figure 6 reveals that the EU household saving rate was 18.3 % in 2020, while the rate for the euro area was higher, at 19.4 %. In 2020, the highest gross saving rate among the EU Member States (no data available for Bulgaria, Malta or Romania) was recorded in Ireland (25.2 %), followed by the Netherlands (24.0 %), Germany (23.4 %) and Luxembourg (23.3 %). There were three Member States which recorded saving rates below 10.0 %, among which the lowest was 2.6 % in Greece. As such, none of the Member States recorded a negative saving rate: negative rates indicate that households spend more than their gross household disposable income and are therefore either using accumulated savings from previous periods or are borrowing to finance their expenditure.

Figure 6: Gross household saving rate, 2020
(%, ratio of gross saving to gross disposable income)
Source: Eurostat (nasa_10_ki)

Developments for household saving rates during the period 2010 to 2020 are presented in Figure 7. The EU saving rate declined from 12.6 % in 2010 and 12.1 % in 2011 to a level between 11.5 % and 11.7 % from 2012 to 2018. It then increased to 12.2 % in 2019 before jumping to 18.3 % in 2020, as the COVID-19 crisis took hold. Savings increased during the COVID-19 crisis as some opportunities for consumption expenditure were restricted, for example concerning the purchase of hospitality, entertainment and travel services.

Figure 7 also shows developments for the saving rates of the four largest EU economies. The household saving rate in Germany was the highest during the period studied and remained within the range of 16.7 % to 18.7 % until the sharp increase in 2020 brought it to 23.4 %. The household saving rate in France was the second highest among these four large economies. It fell from 15.6 % in 2010 to 13.6 % in 2016 before increasing to 14.7 % by 2019; in 2020 it increased to 21.0 %. Throughout this period, the rates in Germany and France were above the EU average. By contrast, in Italy and Spain the rates were consistently below the EU average, with the rate in Spain lower than that in Italy. The Italian rate fell from a level of 11.1 % in 2010 to 9.3 % in 2012 before bouncing back to 11.3 % by 2014. Thereafter the rate steadily declined to 10.0 % in 2019. The 7.4 percentage point increase in Italy in 2020 was the largest increase among these economies, bringing the Italian rate to 17.4 %. In Spain, the development was more volatile than in the other large EU economies, but with a relatively clear overall downward development. The rate was 9.5 % in 2010 and dropped to 5.6 % in 2018. The increase to 8.3 % in 2019 was followed by a further increase of 6.7 percentage points in 2020, bringing the rate to 15.0 %.

Figure 7: Gross household saving rate, 2010–2020
(%, ratio of gross saving to gross disposable income)
Source: Eurostat (nasa_10_ki)

The final analysis in this section divides the latest 10-year period into two periods to analyse changes in household saving. The EU household saving rate decreased by 0.5 percentage points between 2010 and 2019 and then increased by 6.1 percentage points in 2020 (compared with 2019) – see Figure 8. No overall difference was observed between the beginning and end of the first of these periods for the euro area’s household saving rate, but this was followed by an increase of 6.3 points in 2020.

Sweden, Hungary and Slovakia were the only EU Member States which observed a larger increase in their household saving rate between 2010 and 2019 than in 2020; complete datasets are not available for Bulgaria, Malta and Romania. Sweden recorded the largest overall increase between 2010 and 2019, up 5.5 percentage points. The next highest increases were 4.0 points in the Netherlands and 3.5 points in Estonia and Hungary. There were 11 Member States where the household saving rate decreased between 2010 and 2019. The largest decrease was in Greece, where the household saving rate fell by 8.3 points during the period under consideration. In 2020, all Member States for which data are available reported an increase in the household saving rate. The smallest increases, 1.0 points or less, were in Hungary and Slovakia. By contrast, the rate increased by 9.5 points in Luxembourg and 15.1 points in Ireland.

Figure 8: Changes in gross household saving rate, 2010–2019 and 2019–2020
(percentage points, based on ratio of gross saving to gross disposable income)
Source: Eurostat (nasa_10_ki)

Household investment rate

Household investment mainly consists of the purchase and renovation of dwellings; expenditure on consumer durables (such as passenger cars) is not considered part of this component (and is included in final consumption) nor are financial investments. Note also that the investment statistics that are presented in this section also include investments made by unincorporated enterprises (principally sole proprietors). The household investment rate is defined as gross fixed capital formation (mainly dwellings) divided by gross disposable income, with the latter being adjusted for changes in net equity of households in pension fund reserves. Among other uses, this indicator provides a means of analysing the crash experienced in housing markets – linked to the subprime mortgage and credit crisis – during the global financial and economic crisis.

Household investment rates were at least 10.0 % in Germany, Luxembourg, the Netherlands, Finland and Cyprus in 2020

Across the EU, households invested 8.4 % of their gross household disposable income in 2020; this figure was slightly lower than the rate recorded in the euro area (8.6 %). Household investment rates in the EU Member States ranged from a high of 12.5 % in Cyprus, and double-digit rates in Finland, the Netherlands, Luxembourg and Germany down to just below 5.0 % in Poland and Ireland and to 2.7 % in Greece.

Figure 9: Gross household investment rate, 2020
(%, ratio of gross fixed capital formation to gross disposable income)
Source: Eurostat (nasa_10_ki)

Figure 10 shows the development of investment rates between 2010 and 2020. In the EU, the impact of the aftermath of the global financial and economic crisis was apparent, with the household investment rate falling at a fairly rapid pace from 9.1 % in 2010 to 8.0 % in 2015. This development was reversed in 2016, with the rate increasing each year to reach 8.6 % by 2019. Another change in the trend was observed with a fall in 2020. The rates in Spain and Italy followed a less stable development than the EU average. In Italy, the rate fell from being the highest among the four large economies in 2010 to a level below the EU average by 2014. From 2015 to 2019, the Italian household investment rate was relatively stable, but fell in 2020 to 7.2 %. In Spain, the development was initially similar to that in Italy, but with a larger fall in the household investment rate: from 9.7 % in 2010, the rate fell below the French, German and EU average rates in 2011 and dropped to 4.6 % in 2015 and 2016. The rate did increase thereafter, reaching 5.4 % in 2018 and 2019 and recording only a quite small increase (up to 5.5 %) in 2020. By contrast, the household investment rates for Germany and France were relatively stable, particularly between 2011 and 2019. The German rate increased from 8.7 % in 2010 to 9.5 % in 2011 and remained in the range of 9.3 % to 9.7 % until an increase to 10.0 % in 2020. In France, the rate ranged from 8.9 % to 9.6 % between 2010 and 2019 but fell below this range in 2020, due to a fall of 1.0 percentage points.

Figure 10: Gross household investment rate, 2010–2020
(%, ratio of gross fixed capital formation to gross disposable income)
Source: Eurostat (nasa_10_ki)

A closer analysis of the results for individual EU Member States reveals that in some of them the global financial and economic crisis had a particularly strong impact on the household investment rate. For example, with the sovereign debt crisis following on from the global financial and economic crisis, household investment rates in Cyprus, Greece, Spain and Italy fell 7.1, 6.4, 5.1 and 2.8 percentage points respectively between 2010 and 2015. Note that there are no data available for Bulgaria, Malta or Romania.

A comparison of changes for the household investment rate between the two periods covered in Figure 11 reveals that – with a few exceptions among the EU Member States – between 2015 and 2020 investment rates were rising at a faster pace (or falling at a slower pace) than had been the case between 2010 and 2015. The exceptions were the following:

  • Latvia and Lithuania recorded a smaller increase between 2015 and 2020 than between 2010 and 2015;
  • Luxembourg recorded an increase between 2010 and 2015 but a decrease between 2015 and 2020;
  • Poland recorded no change in the first period and a fall between 2015 and 2020:
  • Germany recorded the same increase (up 0.6 percentage points) in both periods.

Norway and Switzerland were also exceptions to this general pattern, with Norway’s rising rate slowing and Switzerland’s falling rate accelerating.

Figure 11: Changes in gross household investment rate, 2010–2015 and 2015–2020
(percentage points, based on ratio of gross fixed capital formation to gross disposable income)
Source: Eurostat (nasa_10_ki)

Data sources

The compilation of sector accounts follows the European system of accounts (ESA 2010). It provides the basis for all of the data for the EU Member States, EFTA countries and enlargement countries, as collected by the European Central Bank (ECB) and Eurostat. Together they publish integrated non-financial and financial accounts, including financial balance sheets, for the euro area; Eurostat also publishes the non-financial accounts of the EU.

The non-financial accounts

Sector accounts by institutional sector provide a systematic description of the different stages of the economic process: production, generation and distribution, use and accumulation of income. Each of the accounts ends with a balancing item: value added, operating surplus, primary income, disposable income, saving, net lending/borrowing.

The household sector

Institutional sectors within national accounts bring together economic units with broadly similar characteristics and behaviour. The household sector – which for the purpose of this article also includes non-profit institutions serving households (NPISH) – is one of four sectors along with non-financial corporations, financial corporations and general government: together they make up the domestic economy.

The household sector consists of individuals or groups of individuals as consumers, as entrepreneurs (producing market goods, non-financial and financial services) and as producers of goods and non-financial services exclusively for their own final use. In general, sole proprietorships and most partnerships that do not have an independent legal status are considered to be part of the household sector, rather than as corporations (financial or non-financial). However, there are sometimes practical difficulties in delineating ‘quasi-corporations’ (unincorporated businesses with the characteristics of companies) between corporations on one hand and the household sector on the other; this may influence the scope and comparability of the data presented as well as the internal consistency of the full set of accounts.

As stated above, data for the household sector in this article are shown including information on the sector of non-profit institutions serving households. The latter is relatively small and includes, for example, charities, relief and aid organisations, religious groups, consumer associations, sports and recreational clubs, professional societies, trade unions and political parties. These institutions provide goods or services to households for free or at considerably reduced prices. Their main resources are derived from voluntary contributions in cash or in kind from households (in their capacity as consumers), payments made by general government, or property income.

Indicator definitions

Gross disposable income is the result of all current transactions before consumption. It excludes exceptional resources/uses such as capital transfers, holding gains/losses and the consequences of natural disasters. It reflects the net resources, earned during the period, which are available for consumption and/or saving. The information presented in this article concerns household disposable income adjusted to take account of social transfers in kind. The aggregate therefore consists of: net wages, the gross operating surplus and mixed income, net property income (note that financial intermediation services indirectly measured (FISIM) is a component reallocated from property income to consumption within national accounts), social benefits, social transfers in kind, and other transfers, reduced by any taxes paid and pension contributions. In other words, it is the total amount of resources that a household has left available to spend or save once income taxes and pension contributions have been subtracted.

The gross household saving rate is the ratio of gross saving to gross disposable income, the latter adjusted for the change in net equity of households in pension fund reserves to offset their impact on cross-country comparisons.

The gross household investment rate is the ratio of gross investment (gross fixed capital formation) to gross disposable income, the latter adjusted for the change in net equity of households in pension fund reserves.

Context

In most developed world economies, an expectation of rising living standards has become common. However, since the turn of the millennium a continuous increase in living standards has become less clear-cut in some countries for a number of reasons. Housing costs (for rent or for purchase) have taken an increasing share of disposable income, with a particular impact on younger generations, many of whom may find it increasingly difficult to afford to leave the family home when they move into the labour market. Various crises – such as the global financial and economic crisis that started in 2007 and 2008, the related European sovereign debt crisis in 2008 and 2009, and subsequent recession, or the ongoing COVID-19 crisis – have disturbed economic and social developments. Among other impacts, these have often led to a slowdown in economic activity, sluggish real wage growth, higher levels of unemployment and more precarious employment conditions.

Gross household adjusted disposable income provides a measure of the financial resources that are available to households, after taxes and other deductions have been made. This information is used as a building block within national accounts to develop a range of derived indicators to look in more detail at issues such as discretionary income, gross household saving rates and gross household investment rates.

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Adjusted gross disposable income of households per capita in PPS (tec00113)
Household saving rate (tec00131)
Household investment rate (tec00098)
Key indicators - annual data (nasa_10_ki)
Non-financial transactions - annual data (nasa_10_nf_tr)