Wealth in Germany is still relatively unevenly distributed. However, there has been no further increase in inequality over the past four years. This is one of the findings of the study "Panel on Household finances" (PHF), which Bundesbank researchers are presenting in the March Monthly Report.

The PHF study aims to compile and present detailed information on household wealth in Germany. The first survey of this kind was conducted back in 2010. On the whole, around 4,400 households participated in the Bundesbank's current study on their financial situation. Of the surveyed households, 2,191 had already taken part in the 2010 survey. Using the data from both studies, Bundesbank researchers are now also able to analyse changes in the distribution of wealth over time.

Uneven distribution

The study shows that the distribution is relatively stable on the whole: "The persistently low rates of interest on savings and the rise in property prices and share prices in recent years do not appear to have had a particularly strong impact on the distribution of wealth in Germany between 2010 and 2014", the Monthly Report states. According to the findings of the PHF study, wealth in Germany is still relatively unevenly distributed. The share in total wealth held by the wealthiest German households has remained virtually constant: in 2014, the richest 10% of German households accounted for 59.8% of total net wealth, compared with 59.2% in 2010. 

In 2014, average net wealth (gross wealth minus debt) stood at €214,500, compared with €195,200 in 2010. As the study reveals, the net wealth of 74% of German households is lower than the average. This figure stood at 73% in 2010. Average net wealth is calculated by taking the total of all assets in Germany and dividing it by the number of households. These figures are, however, heavily influenced by very high and very low values, the Monthly Report states.

By contrast, the median, which is the value that divides households into a wealthier half and a poorer half, is barely affected by extreme values. In 2014, the household in the middle of the distribution had a net wealth of €60,400. The figure amounted to €51,400 in 2010.

The Gini coefficient, which is a statistical measure for inequality within a distribution, has remained unchanged. As in the previous study, the Gini coefficient stood at 76% and is thus, according to the study, high by international comparison. A value of 0% points to a perfectly even distribution, whereas a Gini coefficient of 100% signifies that the distribution is maximally unequal.

Conservative behaviour with regard to shares

The PHF study also provides insights into the composition of households' wealth and their debt situation. In 2014, non-financial assets, which are held by virtually all households, were much more significant than financial assets. There is also a strong correlation between property ownership and wealth. In 2014, for example, 44% of German households owned their main place of residence. On average, this ownership amounted to €231,400 in gross terms.

According to the findings of the study, the share of households which owns shares is still relatively small. In 2014, the figure stood at 10%, compared with 11% in 2010. The average value of these shares amounted to €39,000. "German households' investment behaviour may therefore be regarded as tending to be conservative on the whole", write the Bundesbank economists in the Monthly Report.

Financial and non-financial assets go hand in hand with debt in many cases. In total, 45% of German households have debts. 21% have at least a mortgage loan, and 33% have unsecured loans, such as student loan debt, consumer loans or credit card debt. In 9% of cases, debt exceeds households' gross wealth.

The next wave of the survey is scheduled for 2017, when just over 5,000 households are again to be asked about their wealth. The PHF study is an integral part of the surveys on household finances in the Eurosystem (Household Finance and Consumption Network, HFCS), which allows comparisons to be made between the individual member states.