The quiet wealth drain plaguing European savers: is your money really safe?
Published on 17/02/2026 – 7:00 GMT+1
Saving spare cash in a bank account remains the default for most Europeans, especially when compared with Americans, leaving money idle and gradually eroded by inflation. But how big is the hurdle of nudging savings into investments across generations across the continent?
Tanguy van der Werve, director general of the European Fund and Asset Management Association (EFAMA), laid out the scale of the challenge to Euronews’ Business Editor Angela Barnes on Friday, highlighting striking figures.
“Only about 26% of EU households report owning an investment product such as funds, stocks, or bonds (Eurobarometer 509). In contrast, over the last three decades, more than 50% of US households have reported stock market investments (Gallup poll).” He noted that if you look at a typical diversified fund portfolio, it could have grown by more than 50% from 2014–2023 (ESMA), significantly outpacing inflation. That means a substantial amount of potential European wealth is sitting on the table.
Financial literacy and other factors
Van der Werve pointed to several reasons Europeans may prefer saving to investing, including taxation, financial literacy, risk tolerance, and pension structures.
“A lack of meaningful tax incentives is a key divider between countries with high investment activity and those without. Additionally, many EU countries suffer from low financial literacy and an underdeveloped investment culture. Generations of Europeans have grown up expecting the State to handle retirement, a reliance that can no longer be the default.”
He added that this false sense of security discourages people from taking control of their financial future and looking beyond bank deposits. Workplace and private pensions remain underdeveloped in many EU nations, which further reduces retail participation in capital markets.
Emerging patterns in 2025–2026
On notable shifts in retail investment behavior and risk tolerance across EU countries, EFAMA’s chief pointed to the rising popularity of ETFs and diversified index-tracker funds, along with digital brokerage platforms, which have made investing more accessible in recent years.
“Together, these trends simplify, reduce cost, and make investing more approachable for many households. Social media’s impact is particularly strong among younger investors, who can be drawn toward higher-risk assets like crypto. This underscores the importance of financial education from an early age,” he observed.
Why is Europe lagging in participation?
Addressing why fewer Europeans are moving their money into investments and letting inflation erode it instead of benefiting from compound growth, Van der Werve suggests inertia is a bigger driver than pure choice.
“People worry that making the wrong move could wipe out their savings, so they do nothing and leave funds in bank accounts that feel safe. Better financial education would illuminate the opportunity cost of not investing. Long-term, well-diversified portfolios tend to deliver steadier returns and help shield wealth from inflation. In many EU countries, money is still a taboo topic within families, which certainly doesn’t help the situation.”
He emphasised that financial education should start at home. The best investment an individual can make is in their own financial literacy. Improving literacy helps build trust and dispel common myths (for example, the belief that you need to be wealthy to invest). The perceived complexity of investing also drives people toward bank deposits, he concluded.
