Although economic data in Latvia has shown a rise in household purchasing power since 2024, almost half, or 46%, of the population are not building any savings, a proportion that has remained unchanged over the year. This is according to an analysis of Swedbank data*. At the same time, there has been a slight increase in the share of people who have managed to build a financial safety net of at least three months' salary – this currently stands at 21% of clients, which is one percentage point more than a year ago.
Meanwhile, 3% have both built a safety net of at least three months' salary and regularly invest their spare funds into various investment solutions. This group’s share has also increased by one percentage point over the year. The total number of investors is higher, but only a portion make regular investments.
One of the most widely used long-term savings solutions is the 3rd pillar pension scheme, where accumulated funds are invested in financial markets with the goal of building capital for retirement; almost 20% already make regular contributions to it, while the total number of clients who save in the 3rd pillar is even higher.
“It is positive that over the year, there has been a slight increase in both the share of people who have already built a safety net and those who are regularly building savings. However, almost half still do not save at all, which can, of course, be driven by differences in household income and expenditure, rising prices, and other factors. It is important to remember that one of the decisive factors is regularity. Financial security is built gradually, and you can start with small amounts, purposefully continuing and growing your reserve for unforeseen situations,” notes Karīna Rokjāne, Swedbank Head of Savings Product Line.
Broken down by region, the largest share of the population with a safety net of at least three months' salary is in the Riga region at 22%. In Vidzeme, 19% of clients have such a financial reserve, while in Latgale, Zemgale, and Kurzeme, it is 18%.
Different trends can be observed across the regions over the year. While the proportion of people who have built a safety net has grown by one percentage point in Zemgale and Kurzeme, it has remained unchanged in Latgale, but has fallen by three percentage points in Vidzeme. Meanwhile, in the Riga region, the overall figure has not changed.
The need to strengthen saving habits is particularly pronounced among young people (aged 18-25). Swedbank data shows that 57% of young people do not have any savings, while 32% try to set aside something regularly. Only 5% of young people have already built a safety net of at least three months' salary, and 4% are saving for retirement. Meanwhile, only 1% have both the necessary safety net and additional investments.
Savings and purchasing power trends
To understand trends in building savings, it is essential to evaluate them in the context of citizens' purchasing power. With wages rising faster than price increases, a rise in household purchasing power has been observed since 2024, which theoretically allows for more than just spending, but also saving, without tightening belts. However, recent data from the Central Statistical Bureau (CSP) points to a significant slowdown in wage growth – in the first half of this year, the average net monthly wage was only 4.8% higher than a year earlier, compared to a 10.2% increase last year.
“The slowdown in wage growth is happening at a time when inflation risks have flared up again. In the first half of the year, wage growth was still outpacing inflation, so the average worker's purchasing power continued to increase slightly at the beginning of this year as well. However, with inflation rising towards the end of the year, a further increase in purchasing power is under threat,” points out Līva Zorgenfreija, Swedbank Chief Economist in Latvia.
At the same time, average wage and purchasing power figures do not reflect the financial situation of all citizens. In 2024, the income of the wealthiest households was 6.7 times higher than that of the poorest, while 22% of the population were at risk of poverty. According to CSP data, last year approximately 56% of households admitted that they struggle to make ends meet. Moreover, more than 30% of respondents who fall into the fifth of Latvia's wealthiest households in terms of income level also face such difficulties.
“It must be remembered that the 'average temperature in the hospital' does not show the full picture. Changes in purchasing power do not match the experience of the average wage earner for everyone – not everyone is employed, and even for those who are, wages grow at different rates. Macroeconomic data shows that poverty or low purchasing power is not the only reason why people do not save. Financial planning knowledge, skills, and habits can also play a role,” explains Līva Zorgenfreija.
* Swedbank data compiled for the 2nd quarter of 2026, analyzing the savings and investment habits of the bank's clients. Swedbank has more than a million clients in Latvia, so the data provides an insight into the financial habits of a large portion of the Latvian population.