What is the marginal propensity to save?

Savings rate - definition and development in Germany

Savings rate

Definition of the savings rate

The savings rate is defined as the ratio of savings to income. This results in a distinction between a household saving rate and an economic saving rate. The definitions of both savings rates are as follows:

Savings rate
of private households
=Savings / disposable household income
economic savings rate=Savings of all economic agents / gross domestic product

Average or marginal savings rate?

Just as there are two definitions of the savings rate at the microeconomic and macroeconomic level, there are also two ways of calculating the savings rate: the average and the marginal savings rate.

The average savings rate indicates what proportion of the available (household) income the economic agents put aside.

Example: with an available household income of 50,000 euros, a private household sets aside 10,000 euros per year. The average savings rate in this case is 20 percent.

The marginal savings rate however, indicates the percentage that is saved additionally or less in the event of a change in income.

Example: Thanks to a wage increase in the new year, our household has an available household income of 52,500 euros and is now setting aside 11,000 euros. The average savings rate is now 20.95 percent. The marginal savings rate, on the other hand, is the quotient of the additional income and the increase in savings. In our example that would be 2,500 euros more income and 1,000 euros more savings. This results in a marginal savings rate of 40 percent.

Which factors influence the savings rate?

Several factors influence the savings rate. Some can be derived directly from the definition, others from external incentives.

The definition of the savings rate shows that the disposable household income has a direct influence. The lower it is, the less money is available to households or economic agents after deducting running costs, the lower the savings rate.

Of course, other factors also have an indirect effect on the savings rate. One of them is the interest rate level or the interest rate development: The lower the interest on overnight money, fixed deposits, savings books or other interest products, the less motivation there is to save. Other influencing factors are the economic outlook and the perceived security of current income. If the economic agents assess the economic development negatively, they will try to save more money. If, on the other hand, they think their current income is secure, they will consume more and save less.

The savings rate in Germany

Development of the savings rate in Germany by federal state

The following statistics show how different the savings rates are within the individual federal states:

Operating note: Individual data series can be hidden and shown again by clicking on the relevant heading.


How much money do savers save per federal state and year?

The savings rate is a variable that does not really say much in and of itself. Only when you put it in relation to available income, for example, does a meaningful indicator of absolute savings behavior emerge. We did that and multiplied the savings rate for each state by the disposable income per consumer per year. The result is the amount that each saver puts aside on average per year and state:

Operating note: Individual data series can be hidden and shown again by clicking on the relevant heading.


Ranking of the federal states according to savings per inhabitant

rankfederal stateSavings amount in EUR per year
7North Rhine-Westphalia2.340,87
10Lower Saxony2.198,80
15Mecklenburg-Western Pomerania1.323,96
Germany as a whole2.518,89

Change in savings over time:

federal stateSavings amount in EUR per yearChange since 1995Change since 2005
Mecklenburg-Western Pomerania424,561.033,721.104,331.323,96+28,08%+19,89%
Lower Saxony1.675,741.597,341.666,072.198,80+37,65%+31,98%
North Rhine-Westphalia1.855,631.748,421.896,722.340,87+33,89%+23,42%
Germany as a whole1.620,241.668,621.891,892.518,89+50,96%+33,14%

Savings rate in Germany - year-on-year and quarterly comparison

The development of the savings rate in Germany since 1991 can be found below (data per year):

Operating note: Individual data series can be hidden and shown again by clicking on the relevant heading.


Below you will find the quarterly savings rate in Germany:

Operating note: Individual data series can be hidden and shown again by clicking on the relevant heading.


Savings rate and interest rate level

Does the savings rate decrease with increasing interest rates or does it increase with decreasing interest rates? We pursued this question in our last statistic:

Operating note: Individual data series can be hidden and shown again by clicking on the relevant heading.


You can see the current interest rates on overnight deposits and fixed deposits from our current interest rate comparisons: