A recent study by the National Institute of Statistics and Economic Studies (STATEC) reveals that Luxembourg’s savings rate is gradually declining after peaking during the Covid-19 pandemic. Projections for 2025 suggest that residents will save an average of 18.6% of their income, down from the record highs seen in 2020.
During the pandemic, widespread lockdowns and the closure of many services led to a surge in savings, with Luxembourg residents setting aside 26.9% of their income in 2020–a significant increase compared to the 15.6% saved in 2019.
However, since then, the savings rate has been steadily decreasing, though it remains higher than pre-pandemic levels.
In 2023, the average disposable income per household stood at €7,662 per month, meaning residents could save approximately €1,425 monthly based on the projected 2025 rate.
However, this average masks significant disparities. According to STATEC, the wealthiest households are driving the figure upward, as they are expected to save nearly 40% of their income this year. In contrast, the least well-off households are expected to dip into their savings by around 10%.
The start of 2025 has brought some relief for lower-income earners, with an increase in the minimum wage and a tax-free allowance for workers earning the unskilled minimum social wage. Additionally, a new wage indexation is anticipated in the spring, which could further impact disposable income and savings trends.
