Keeping your savings at home rather than depositing them in your bank account or investing them in life insurance is a reflex that has wind in your sails in the current economic context. Explanations.
Geeky cash in the age of contactless and mobile payments? Maybe not! This is shown by the results of a recent opinion poll. (1) produced by Opinionway for AuCoffre. When asked what is the most appropriate way to save money, 27% quote booklet A, 19% real estate investment and 14% keep it at home, a result up 5 points compared to the previous survey carried out in May 2021. Keeping your money under the mattress is a solution that is considered even more interesting than betting on life insurance (13%).
With the war in Ukraine in particular, some are approaching a kind of war economy. It is a rather mechanical attitude linked to a deteriorated context, which gives rise to fears that the institutional model to which the banks belong may be at risk. 48% of opinion polls fear a bank crash. The French have remembered the memory of the crisis in 2008, when the big banks came knocking on the door of the state to be saved. In that context, they are suspicious, analyzes Jean-Franois Faure, president and founder of AuCoffre.
An evolving phenomenon
And to avoid putting all their eggs in one basket, individuals prefer to keep money at home. Although inflation reduces the value of these savings, at least they believe that these savings are safe. Despite the risk of burglary, that is, and despite the fact that the money placed in the bank is guaranteed up to 100,000 euros per person and per company in the event of bankruptcy.
And this so-called phenomenon of hoarding is progressing, as Philippe Crevel notes, since the amount of cash, i.e. the cash held by individuals at home has been reached 275 billion euros the end of June, or 110 billion more than in the same period in 2015. In theory, this share of cash should be reduced because we pay less and less with cash. If the cash is increasing, it is because some are keeping it at home just in case. This is the famous wool stocking, explains Philippe Crevel. A defense mechanism, which can also be explained by the fear of 57% of respondents for the implementation of a tax on their savings. A decision which was notably taken at the end of 2020 by a bank in France with a tax on deposits of over 50,000 euros from its new customers.
A reality of behavior
A recent study published in mid-October also focused on the use of euro banknotes issued by the Banque de France. It seems that 25% used for household purposes. A practice that the French do not have a monopoly on. According to a study by the European Central Bank, 24% of Europeans surveyed in 2016 indicated that they have cash outside their bank account as a safety reserve or as a means of saving. Among the latter, 78% said they had less than 1,000 euros, 12% more than 1,000 euros and 10% refused to answer!
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Store money under your mattress or in the washing machine – as we are used to saying in a figurative way – it is not a vision of the mind, it is a reality of behavior, moreover confirmed in 2019, the director general of the financial services of the Bank of France, Erick Lacourge.
Especially in addition to the parallel economy, where the use of cash is essential, this phenomenon affects older people more, but also those with modest incomes, who have little trust in the banking system. And in a time of uncertainty, have tickets at home, reassuredexclaims Philippe Crevel.
He also sees the extension of the French’s preference for liquidity, money available in the short term and without risk. Like the one up close 550 billion euros deposited by individuals in their non-remunerated current accounts or even 500 billion euros placed on Livret A and Livret de développement durable et solidaire (LDDS) at the end of October.
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(1) OpinionWay survey for AuCoffre conducted on 24 and 25 August 2022 with a sample of 1,008 people, representative of the French population aged 18 and over, formed according to the quota method. The interviews were conducted using a self-administered online questionnaire on the CAWI system.