Eurozone households continued to set aside a larger portion of their income in the first quarter of 2026 than they did before the pandemic, a restraint that is keeping a lid on consumer spending and economic momentum, ING Economics said in a note dated Friday.
According to ING, consumers in the currency bloc spent €85.74 on goods and services for every €100 of disposable income in Q1 2026. That level edged up only slightly from €85.70 in the fourth quarter of the previous year, leaving the gross savings ratio at 14.26% - a figure the note described as persistently above pre-pandemic norms.
ING contrasted current behaviour with the five years before the pandemic, when the gross savings ratio held steady at about 12.5%. During that period, households typically spent roughly €87.50 out of every €100 of disposable income on goods and services, the note said.
The bank also compared European saving patterns with those in the United States. ING reported that the gross savings ratio in the U.S. was 10.2% in the fourth quarter of 2025 and has declined from levels seen before the pandemic. "Household consumption continues to provide relatively strong support to the U.S. economy amid solid demand for goods and services," ING said, adding that "European households remain more cautious, with higher savings acting as a drag on consumption."
ING highlighted that household spending usually makes up just over half of gross domestic product in Europe. The note set out how a movement in the savings ratio would translate into demand: a fall from Q1 levels to 12.5% would be equivalent to roughly an additional 1% of GDP in demand for goods and services, while a decline to a level similar to the United States would equate to approximately an additional 2% of GDP.
The analysis also allowed for an offsetting mechanism. ING said that if higher savings were redirected into household capital formation - for example, increased investment in new residential construction or renovations - the negative effect on domestic demand could be mitigated.
Finally, ING noted that although Eurozone households remain heavy savers, the composition of those savings is shifting. More of the funds are being channelled into investment products rather than held as bank deposits. The note suggested that this reallocation could, over time, help create conditions for stronger consumption and domestic demand, though it did not assert that such a shift has yet produced a material pickup in spending.
Key points
- Eurozone gross savings ratio was 14.26% in Q1 2026, with households spending €85.74 per €100 of disposable income on goods and services.
- A return of the savings ratio to 12.5% would imply roughly 1% of GDP in extra demand; a fall to U.S. levels would imply about 2% of GDP.
- Savings are increasingly being invested in financial products rather than bank deposits, a trend ING says may support future consumption if it translates into greater domestic demand.
Risks and uncertainties
- Persistently elevated savings could continue to suppress household consumption and weigh on sectors dependent on domestic consumer spending, including retail and services.
- Progress toward normalization of the savings ratio has been limited, leaving uncertainty about the timing and scale of any potential boost to GDP from increased spending.
- Whether the shift from bank deposits to investment products will translate into higher consumer outlays or instead remain as financial accumulation is uncertain.