Fundación Mutualidad Abogacía and the IE Foundation launch The Household Savings Observatory
- Both organisations sign an agreement to jointly analyse the savings and financial planning situation of Spanish families
- The Observatory was created with the aim of raising awareness in society and providing knowledge to institutions to help them take the necessary measures to promote the culture of saving
- The symbolic act of virtual signature of the agreement was led by Gonzalo Garland, Executive Vice President of the IE Foundation and Enrique Sanz Fernández-Lomana, President of the Fundación Mutualidad de la Abogacía
- Laura Núñez, Director of the Insurance Research Center at IE Business School will lead the Household Savings Observatory project
- The "Fundación Mutualidad Abogacía" scholarship for doctoral or post-doctoral research is created to develop the research work
Fundación Mutualidad Abogacía and Fundación IE have created the Household Savings Observatory, with the aim of carrying out pioneering research with a social impact in areas related to household savings and financial planning (motivations and barriers that encourage or hinder savings, behavioural biases, financial education, chosen savings instruments, best practices in different countries, micro and macroeconomic consequences of the distribution of savings, household consumption vs. savings, financial investment vs. property investment, household finance, etc.). Its intention is to provide a solid base of knowledge and disaggregated indicators or indices on household savings, which will improve the quality of the debate on the best economic, tax, monetary, etc., policies to promote savings, and ways to raise society's awareness of its importance.
The worldwide Covid-19 pandemic has pushed many families to examine their household savings in a different way. Over the last decade, a lot of emphases has been placed on the need to encourage individuals to save money to better face their retirement stage, due to the progressive aging of the population, the low birth rates, and the huge deficits and public debt volumes borne by developed societies as a result of the latest financial crisis. However, the unprecedented situation we are experiencing worldwide highlights the importance of saving not only to face the stage of retirement but throughout life, as a mechanism of precaution and financial stability.
While families are becoming aware of the importance to assess their short and mid-term financial stability, it is wise that we all remember the unquestionable relevance of household savings at the macro and microeconomic levels. Through financial intermediaries, household savings –which take the form of bonds, shares, deposits, funds, ETFs, etc.– fuel business investment through its financing, contributing to the growth of industries, job creation, research and development, and, ultimately, to the creation of wealth in the regions, which in turn benefits population. At the microeconomic level, household savings are also fundamental, as they constitute an important backstop to deal with unforeseen events (loss of employment, illness, etc.) and to level out income and expenditure throughout life (children’s education, retirement period, etc.).
In this sense, it is relevant, not only the savings volume of the economies at the aggregate level, but also the distribution of these savings across the different individuals or families who make up society. The economic and social consequences will be very different if savings are concentrated in a small number of families rather than being widely distributed across different strata of society. It is therefore necessary not only to encourage savings at the aggregate level, but even more so to promote a balanced distribution of savings, ensuring that all households have the knowledge and capacity to save. Small savings rates sustained over time by households generate huge differences in their wealth. Similarly, it is essential that such savings are materialized and diversified through appropriate financial instruments, ensuring that families maintain an adequate level of both liquid assets and medium-long-term assets, according to the phase in their life cycle in which they are.
Do families living in large cities save the same as those living in more rural environments or smaller cities? What role do financial knowledge, education, gender, age, or profession play in savings decisions? How does savings distribution across households impact economic growth and social welfare? What financial instruments do families use to save and, above all, why do they choose them? What set of good practices emerge from comparative studies?
Shedding light on this, so that the financial authorities and responsible bodies can take appropriate action, will be our modest contribution to society.
About Fundación Mutualidad Abogacía
The Fundación Mutualidad Abogacía was created in 2003 as a solidarity instrument by legal professionals to improve the services that the Mutualidad de la Abogacía offers to its associates, their families and other vulnerable groups. As a fundamental axis of the social work of Mutualidad de la Abogacía, its Foundation aims to take the concept of mutualism even further and become an agent for change that helps to develop the necessary competencies to make informed financial decisions that will enable legal professionals, and society in general, to improve their quality of life through the values of innovation, collaboration, transparency and closeness.
The Foundation's programmes help its associates and other beneficiaries to improve their savings capacity, thrive as lawyers and entrepreneurs, be more sensitive towards social and environmental challenges and, finally, be better prepared for their transition to retirement with the best health conditions and utmost dignity.
About IE Foundation
The IE Foundation is a non-profit organisation that works from a global perspective to improve the social impact of the IE University with the support of its donors and through collaboration with strategic partners. Its mission is to contribute to the improvement of society, promoting the values of Diversity and Inclusion, Entrepreneurship, Humanities, Sustainability and Innovation, through the promotion and participation in initiatives aimed at improving the quality of education and the development of talent, as well as through applied research and disclosure of the state of the art. The IE Foundation makes available to the community its bibliographic collections, all research by its centres and chairs, as well as other publications of eminently practical inspiration, through its open online library.
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