Flourishing years of economic growth and rising incomes have seen people spend almost all of it. The crisis cooled the shopping spree and made people think it might be a good idea to put something away for a rainy day.
Only half of the Russian population has a savings account. The figure was even lower before the financial crisis, but still too few people in the future.
In the past entire life savings were wiped out when a bank collapsed. But the government now has a generous bank insurance system, which guarantees deposits of up to 25 thousand, says Deposit Security Agency Deputy General Director, Andrey Melnikov.
“Deposits are everything. It's obvious from the savings pattern of both, people who earn a little and those who earn a lot. There is a tendency now of investing less in real estate or financial instruments. People have greater faith in bank savings because of the deposit security system.”
The effect of the crisis might last for 2 years as Russians have less money to save or invest. But the fast growing domestic equity markets, which doubled in value last year, are persuading more people to take the risk, says Andrey Babiyan, deputy head of private assets management at Alfa Captial.
“There are 2 types of clients, the one who want to preserve money – their percentage has dropped from 80% to around 40%, the second are the ones who want profits and are ready to take all the risks. They account for around 60% of our new business now. But we are talking about 2% of the country's population who knows what investments are.”
Historically, persuading Russians to save has been difficult. With inflation sometimes in the high teens, the surest way to realize the value of money earned was to spend it. But the economy is changing, inflation is at record lows and average income is rising, so people now have both the means and motive to save.