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What will make Russians make savings in the long run?

As part of the survey conducted in March among Russians by the Rabota.ru service, 30% of respondents save money for the future, despite the fact that earlier about 64% of respondents have announced their intention to save money in 2021, writes RBC.
What will make Russians make savings in the long run?

There is definitely a trend towards the growing popularity of savings instruments alternative to bank deposits in the Russian Federation, and the deposit system is experiencing problems due to inflation and low interest rates, say experts interviewed by RBC+. In 2020, about half of Russian banks recorded a decrease in the volume of attracting this category of the resource base, according to the April report of the ACRA rating agency. It also says that this year the process may continue, and “acceleration of inflation may lead to a decrease in the real profitability of deposits”.

It is possible to stimulate interest in long-term savings by increasing the level of financial literacy of the population and popularizing ready-made products and solutions that do not require special knowledge or time from people. In particular, we are talking about individual pension plans (IPP), which allow form a pension of the desired size through self-contributions and investment income.

The potential of such long-term savings instruments as investment (ILI) and universal (ILI) life insurance is far from being revealed. However, according to statistics, the endowment segment is growing quite dynamically. According to the Bank of Russia, in 2020 alone, the volume of premiums on endowment increased by 25% compared to the previous year to 136.9 billion rubles. According to Evgeny Gurevich, General Director of Kapital Life Insurance, over ten years the segment has grown tenfold and is now the driver of the life insurance market with a 30% share.  On the contrary, the amount of contributions in the private housing sector dropped by 7.4% last year to 182.9 billion rubles. Despite the fact that the volume of the entire insurance market (premiums) has exceeded 1.5 million rubles last year and grown by 4.1%, it is still several times less than the bank deposit market.

Among the obstacles for the long-term instrument development, experts name legislative restrictions.

Source: https://plus.rbc.ru/news/60846e3c7a8aa9f1d906ae99

Photos are from open sources.

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