Strong franc bites into savings
Most people pay loan installments from their savings – that have decreased significantly over the last few years. More than half of the families in Hungary can save up less money than they did five years ago, as a recent study published by insurance company Aviva reveals.
The majority of Hungarian families is forced to live up their financial reserves, and even if they consider saving up money, they typically chose investments with less than five years of maturity. More than half, 56%, of the queried in Aviva’s research said that they are able save up smaller amounts now than they were five years ago. To the question why not putting aside more money, 44% of the respondents said that they had loans to pay.
“Due to the volatile movements of the Swiss franc/forint exchange rate, the majority of the Hungarian population is forced to tap their reserves and pay their increased monthly installments,” said Aviva president-CEO János Bartók. However, he emphasized the importance of long-term self-care. “If families had notable reserves, the strong Swiss franc would not have affected them so drastically,” he noted.
As for the aim of their savings, Hungarians usually consider specific short-term options. Only one-fifth of the population plans investments longer than 10 years. The research also reveals that, especially in case of short-term savings, people have definite ideas of what the money they want to spend on.
“Most people are cautious about long-term commitments, because they think the current economic situation is unpredictable,” Bartók explained, drawing the attention to the so-called unit-linked products where long-term self-care is in the focus.
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