A recent analysis by Banco de Portugal (BdP) has highlighted significant disparities in the distribution of household savings across income levels. The central bank’s findings reveal that more than 55% of the nation’s savings are held by the wealthiest 20% of families, underscoring the unequal distribution of financial resources.
The BdP characterized the savings imbalance as “highly unequal,” citing data that shows the top 20% of earners generate the majority of savings. In stark contrast, households in the lowest income decile spend more than they earn, leaving no room for savings. This observation was detailed in the December Economic Bulletin, which analyzed the intersection of savings, income, and age.
The report also noted that savings rates tend to rise with income across all age groups. Within each income decile, it was observed that the highest savings rates are associated with older age brackets, specifically those aged 45–64 and over 64.
Examining the broader distribution of savings, the BdP found that households in the top two deciles of the savings scale are responsible for approximately two-thirds of total savings. Conversely, families in the lowest two deciles exhibit negative average savings, a situation often linked to financing expenses through credit or drawing on accumulated wealth.
The report, authored under the leadership of Mário Centeno, paints a stark picture of financial inequality in Portugal, emphasizing the challenges faced by lower-income households in accumulating savings. This disparity calls for a deeper examination of policies aimed at addressing economic inequities and promoting financial inclusion.
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