Financial literacy 2018: Household savings have grown nearly by a billion, with a number of members of third pillar pension scheme more than 300 thousand

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Summarizing the annual results of the implementation of the National Strategy for Financial Literacy in Latvia for 2014–2020, the Financial and Capital Market Commission (FCMC) concludes that overall in 2018 the indicators of the achievement of the financial literacy strategic goals demonstrate the desired progress, with some ratios even exceeding the expected. Trends of the last year – a healthier credit deposit ratio (71/100), growing confidence in service providers – 51%; however, an increase in savings is disproportionate to the GDP growth, showing signs of overheating of the economy.

In assessing the fulfilment of the strategic objective Planning Finances and Savings Tradition, it can be seen that at the economic growth phase tradition has been strengthening, as in 2018 total Latvian households savings have increased nearly by a billion euro (i.e. total deposits in Latvian commercial banks, the funds in the second pillar and third pillar pension schemes and in financial instruments), totalling 11.2 billion euro (10.4 billion in 2017).

The FCMC experts estimate that more so-called safety cushions covering a variety of financial services should be built in the near future for ensuring the financial sustainability of households, since last year the savings, although increased, but less than GDP that could be regarded as a sign of overheating of the economy.

FCMC Senior Financial Market Analyst Agris Rozentāls: Households’ financial well-being has improved over recent years, but the indicators show increasing signs of overheating of the economy. With optimism reinforcing, spending of the population has increased, but savings are growing more slowly than the gross domestic product, which is characteristic of the periods of overheating economy. Due to possible adjustments in the next economic cycle, excessive indebtedness by some households, in particular disproportionally expensive short-term loans may create unbearable debt burden.

More about sustainability indicators:


According to the performance indicators of the second strategic objective Financial Service Environment and Integrity the number of members of third pillar pension scheme (private pension funds) increased by 17 342 persons last year, a total of 303 849 persons, 1 442 new endowment life insurance contracts were re-entered, as well as Latvian residents increasingly insured their risks: 211 euro per person on average (compared to 168 euro in 2017). Overall, confidence in financial service providers had increased – 51% (44% in 2017), the highest confidence rate was observed in the insurance sector: 73% (62% in 2017).

Past due loans in the banking sector reduced to 2.7% and was below the planned strategic target level (the highest level of the banking sector arrears was in 2011, 19.6%). The number of problematic mortgage loans (past due by more than 90 days) also decreased significantly: down to 2 598 loans in amount of 88 million euro (in 2017: 3 276 credit agreements in amount of 121 million euro). Last year, commercial banks issued 10 861 new loans to households amounting to 390 million euro (in 2017: 423 million euro). In total, 4 216 loans in amount of 540 million euro were granted to domestic micro, small and medium-sized enterprises by the commercial banks.

The sound domestic economic situation, as well as low interest rates in the euro area provide for Latvian households’ financial well-being and some optimism in relation to the third financial literacy objective Sustainability of Public Finances and Future Developments. Gross domestic product (GDP) per capita has grown to 15 328 (in 2017: 13 855). In 2018, the household loans to deposits ratio in the commercial banks was 0.71, the ratio of household loans to GDP was 16% (in 2017: 19%). The total deposit balance of domestic customers (households and corporations) in the commercial banks was 13 billion euro at the end of 2018 (in 2017: 12 billion euro).

Further information:
Ieva Upleja
FCMC Communications Division
Phone: + 371 67774807; e-mail:


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