Poles gathered evidence funds, exceeding PLN 3.5 trillion. This is simply a historical minute that could have been optimistic if it had not been for hard economical data. Unfortunately, more than half of these gigantic savings are seriously threatened. On the 1 hand, the silent killer of the value of our money is inflation, which, despite its declines, inactive remains high. On the another hand, the government plans to introduce fresh burdens which will hit the wallets of Poles erstwhile purchasing the most popular electronics. Analysts are beating the alarm: keeping cash and money on low-interest accounts is now a simple way to real property loss. In the face of rising cost of surviving and a increasing pension perspective, financial inactivity is becoming an increasingly risky strategy.
Recorded PLN 3.5 trillion. How do Poles manage their property?
The National Bank of Poland (NBP) data for the first 4th of this year are clear – the value of financial assets of Polish households has reached historical level 3 trillion PLN 516 billion. We've never had this much capital before. However, the analysis of the structure of these savings reveals a worrying trend that poses a serious threat to the financial stableness of millions of citizens.
It turns out that 51% of this amount, i.e. over PLN 1.79 trillion, are funds held in cash and on low-interest deposits and bank accounts. In a day of persistent inflation, this means that this money is systematically losing value. The purchasing power of these savings is destroyed all day by rising prices and the symbolic interest offered by banks is not able to compensate for this loss. It is simply a financial trap in which most Polish savers are buried.
Fortunately, there's a light in the tunnel. The request for active investment is growing. The share of assets located in instruments with higher growth potential, specified as stock of listed companies, investment fund units or bonds, has already exceeded PLN 816 billion. This represents over 23% of all our assets. How much possible does these instruments have? It is adequate to mention that only in the first 4th of this year the value of shares held by Poles increased by more than 10%. At the same time, the bank deposit yielded close to zero after inflation.
Inflation won't let go. Why is our money losing value?
July figures of the Central Statistical Office (GUS) brought seemingly good news – inflation declined. The price index of consumer goods and services (CPI) was 3.1% annually, which is simply a noticeable drop compared to a June reading of 4.1%. This indicator is besides within the advanced limits of the NBP inflation mark (2.5% +/- 1 pp). However, joy is premature due to the fact that economists expected a much better result, below the 3% threshold.
The fall in price dynamics is mostly a statistical effect, so-called. high base effect. A year ago, in July, the government partially defrosted energy prices, which rapidly conquered inflation. By comparing today's prices to those advanced levels, we get a lower growth rate. This does not change the fact that prices are inactive rising at a rate that actually depletes our savings. Detailed data show that food has increased by 4.9% year-on-year and energy carriers by 2.4%. The only consolation is the drop in fuel prices by 6.8%.
What does this mean in practice for our wallets? Having PLN 10,000 in a savings account with a 1% interest rate, after 1 year the real value of this money, with inflation 3.1%, will fall by over PLN 200. The money that was expected to be safe is actually melting.
The government is preparing a fresh tax. Prices of smartphones and laptops will go up
As if advanced inflation was not adequate concern, the Ministry of Culture plans to grow the so-called. reprographic fee for modern electronics. This fee, intended to compensate artists for losses for legal copying of works for private use, has been in force for more than 30 years, but the list of the products covered has not been updated since 2008. It's about to change.
According to the draft amendment, the fee will include the most popular equipment, specified as:
- Smartphones
- Tablets
- Computers and laptops
- TVs with Smart TV
The rate is expected to be 1% of the retail price of the product. This means that erstwhile buying a smartphone for 4000 PLN, we will pay an additional 40 PLN tax. Although formally charged by the importer, it is almost certain that the final cost will be full passed on to consumers. The Ministry estimates that the changes will increase yearly revenues from this increase from 36 million to as much as 200 million PLN. The public consultation on this issue continues until the end of August, and the fresh rules are to enter into force from next year.
We live longer and this is simply a financial challenge for everyone
The affirmative trend is that Poles live longer and longer. According to GUS data, the average life expectancy of men in Poland is almost 75 yearsand women over 82 years. This is simply a crucial advance compared to 1990, erstwhile these values were respective years lower. Nevertheless, we are inactive below the European average.
But longer life is not only a reason for joy, but besides a immense financial challenge. In combination with a low birth rate, this means expanding force on the pension system. Future benefits may not be adequate to keep a decent standard of surviving for 20 or 30 years after the end of professional activity. This is another key argument for starting to build private capital as early as possible, utilizing instruments that can overcome inflation.
The current economical situation puts Poles in a clear choice. We can passively watch our hard-earned savings lose value, eaten by inflation and fresh taxes. An alternate is to make informed financial decisions – diversifying the portfolio and transferring at least part of the funds from interest-free accounts to investments that give a chance for real wealth growth. NBP data shows that more and more people are choosing the other, smarter way.
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Poles have evidence savings. Experts warn, most are at risk
