Wealth: Half of the German population hardly has any money on hand

People with little wealth are at a structural disadvantage when it comes to investing and can hardly overcome this on their own. This is shown by a study by Finanzwende Research, funded by the trade union-affiliated Hans Böckler Foundation.

“Different returns and, above all, the lower starting capital of people with few assets ensure that the gap between wealth groups continues to grow,” says Moritz Czygan, co-author of the study and speaker at Finanzwende Research, a non-profit subsidiary of the citizens’ movement Finanzwende.

Anyone who only has a few thousand euros needs an iron reserve, for example in case the washing machine breaks down, said Britta Langenberg, head of consumer protection at Finanzwende Research. Investing in stocks would hardly be an option for them.

For the study in collaboration with the Institute for Socioeconomics at the University of Duisburg-Essen, the assets of adults were collected and analyzed using a survey based on the socio-economic panel from 2019: The first group was the wealth-poor half of the population with an average gross wealth of 6000 euros; Debts were not taken into account. This was followed by the wealthier middle class with a share of 40 percent and an average gross assets of 149,000 euros. The top 10 percent received an average of 925,000 euros.

Average asset portfolios were created for the groups and linked to long-term return data from the Bundesbank. From this, a poverty disadvantage was calculated: According to the study, it was 525 euros in 2024. It quantifies how much money the approximately 35 million adults in the lower half of wealth miss out on annually compared to those in the middle. 280 euros of this arise because the portfolios of people with poor assets have lower returns. In addition, they have higher product costs because the costs for a checking account or life insurance, for example, are more noticeable when assets are lower.

By far the most important possession of the wealth-poor half is their own car, which loses value over the years, the authors wrote. There are also safe but low-return investments such as savings deposits or life insurance.

For middle-income people, on the other hand, their own property makes up the majority of their wealth – and owners have benefited from the long real estate boom. The wealth middle therefore achieves an average return of 5.9 percent per year, while the property of the wealth poor only grew by 1.9 percent.

The wealth-poor half of the population therefore includes a particularly large number of East Germans, people with a migration background and single parents. The perspective of people with little money plays no role in the public discussion, criticized Langenberg. “People don’t talk about money in Germany, especially not a lot of money.” Better consumer protection and more financial education are needed.