The European Fund and Asset Management Association has published the third edition of its report on household participation in capital markets, finding that European households still keep a large share of their financial wealth in bank deposits even as the case for long-term investment strengthens. The report links that pattern to growing pressure on retirement income, with the overall European Union public pension replacement rate projected to fall from 46% in 2026 to 38% by 2070, increasing the need for private savings. At the same time, it points to tentative changes in behaviour, including a record 14% allocation to investment funds in 2025 and a reduced share of new household financial acquisitions going into deposits after 2020. Deposits accounted for 40% of household financial assets in 2025, up from 37% in 2015, after peaking at 42% in 2022. EFAMA estimates that keeping EUR 10,000 in deposits rather than investing it in funds over 2014 to 2025 carried an opportunity cost of about EUR 5,131. The report identifies several policy levers to increase household participation in capital markets, including pension design such as auto-enrolment, savings and investment accounts, tax incentives, financial literacy and simpler products. It notes that only five European countries currently have auto-enrolment, 14 have implemented savings and investment accounts, Poland and Slovenia introduced such accounts during 2026, and another is expected in Ireland in 2027.
European Fund and Asset Management Association2026-07-09
European Fund and Asset Management Association report shows modest shift in household savings toward investment funds as Europe’s pension gap widens
The European Fund and Asset Management Association’s latest household participation report says European savers still hold too much wealth in deposits even as public pension replacement rates are set to decline. It finds some improvement in retail behaviour, with investment fund allocations reaching 14% in 2025 and the share of new money going into deposits falling after 2020. The report highlights auto-enrolment, savings and investment accounts, tax incentives, financial literacy and lower complexity as the main levers to shift households toward capital market investment.