Uncommon Truths: Where will we gather new assets?
Key takeaways
Global savings set to double by 2075
The inflation-adjusted annual volume of global savings is projected to more than double by 2075, driven by population growth and rising income per capita.
Regional shifts in savings contributions
Asia, North America and Europe will remain the top regions for savings, though Europe’s share will decline due to aging and stagnant populations. Africa’s role will grow over time.
Top countries for savings remain steady
The US, China and India will continue to lead in savings through 2075. While Africa’s income per capita limits its overall savings potential, Egypt, Ethiopia, South Africa and Tanzania could enter the top 30.
This is the next in a series of papers over the summer about long-term issues. The topic is savings patterns and the link to demographics, development and lifecycle patterns of saving. The conclusions should be of interest to asset managers wondering where to look for clients over the coming decades.
An obvious place to look for savings flows is in countries with lots of savers. The answer will lie somewhere in the intersection between population size, income per head of population, and the share of population that is in the saving phase of life. The latter is on the assumption that we save while working to accumulate wealth that can be used when we retire – the life cycle hypothesis of savings (there is a short selection of suggested reading material about the life cycle hypothesis in the bibliography, for those who are interested). The focus is implicitly on private sector pension-type savings. Public sector funds that perform broadly the same function (sovereign wealth funds, say) could also be considered but they are much easier to identify and are not the topic of this paper.
