Saving and borrowing in Finland

Spring 2009

Survey

• Coverage: 2,400 persons (aged 15 to 74)

• Time of interviews:January 2009

• Interviewed by:IRO Research Oy

Savings and investments

37

46

51

52

52

55

58

0 10 20 30 40 50 60

2003

2004

2005

2006

2007

2008

2009

Q: Do you hold savings or investments at the moment?

% of respondents

Yes

Saving and investment vehicles

25

19

10

9

4

6

26

15

14

6

11

27

27

19

13

6

9

22

25

17

12

6

9

27

31

19

12

6

10

26

34

17

13

6

9

26

0 10 20 30 40

Current account

Savings, deposit orother bank account

Mutual fund units

Listed shares

Endowment policies

Voluntary personalpension policies

2003 2004 2006 2007 2008 2009

% of respondents (n=2,393 in 2009)

Which of the following vehicles do you hold?

Holders of savings, investment, or other bank accounts broken down by age

27 2832

2521

34 3436

29

36 3735

2527

32 33 3431

3335

40

46

3935

0

5

10

15

20

25

30

35

40

45

50

15-19 20-24 25-28 29-34 35-39 40-44 45-49 50-54 55-59 60-64 65-69 70-74

2008 2009

Do you hold savings or other assets at the moment?

% of respondents (n=2,393 in 2009)

Saving and investment intentions

39

43

44

48

0 20 40 60

2006

2007

2008

2009

% of respondentsYes

Q: Do you intend to save or invest during the next 12 months?

Saving and investment intentions

7

4

6

2

16

12

4

4

2

10

16

13

5

5

1

10

22

10

4

5

2

12

26

8

5

5

2

9

0 10 20 30

Current account

Savings, investment orother account

Mutual fund units

Listed shares

Personal pensioninsurance

Endowment insurance

2004 2006 2007 2008 2009

Q: In which of the following vehicles do you plan to save or invest?

% of respondents

For what purpose are you saving or investing money

% of present or potential savers/investors (n=1,645 in 2009)

Q: For what purpose are you going to use the money saved or invested?

2

3

4

6

15

19

23

54

0 10 20 30 40 50 60

Studies

Renovation

Holiday trip

Inheritance

Home purchase

Retirement

Consumer goods

For a rainy day

Saving and investment criteria

73 74 76 74 76 7262 60

47 47 52 51 51 44

24 28 28 29

19 21 18 21 20 2231 30

38 39 36 38 3943

3838 40 37

5 2 4 4 3 4 5 8 13 12 9 8 8 11

34 31 29 31

0 %

10 %

20 %

30 %

40 %

50 %

60 %

70 %

80 %

90 %

100 %

04 05 06 07 08 09 08 09 04 05 06 07 08 09 06 07 08 09

Very much Somewhat Not at all Cannot say

Security Return

How much was your choice of savings or investment vehicle impacted by the following factors?% of respondents

Provision for retirement

Free of risk

Credit situation

48 4651 52 50 51 51 51 50

24 23 2528 29 29 31 30 3028 30

33 34 34 33 32 3228

12 11 116 6 7 6 6 5

0

10

20

30

40

50

60

1999 2001 2003 2004 2005 2006 2007 2008 2009

Loan Housing loan Consumer credit Student loan

Q: Do you hold a loan or credit at the moment?

% of respondents

18

11

6

7

5

18

11

6

6

4

16

10

4

6

4

17

11

5

5

3

2

17

9

2

3

2

2

0 5 10 15 20

Consumer loan from bank

Overdraft account

Loyal customer card credit from store

Other card credit with grace up to 2 mos

Store hire-purchase credit

Raised fast cash in past 12 months

2005 2006 2007 2008 2009

Consumer credit types

% of respondents (n=2,393 in 2009)

Do you currently hold loans other than home loan?Have you borrowed fast cash in the past 12 months?

Breakdown by age of consumer credit holders

32

4

25

41 4146

41 42 40

2824

17

28

2

2630

37 37 38 3732

29

21

15

0

10

20

30

40

50

60

All 15-19 20-24 25-28 29-34 35-39 40-44 45-49 50-54 55-59 60-64 65-74

2008 2009

Q: Do you hold a loan or credit at the moment?

% of respondents (n=2,393 in 2009)

2,1 2,1

5,1

1,02,2

1,4

0

2

4

6

8

All Under 20 20-28 29-39 40-49 Over 50

age of respondent, yrs

Fast cash borrowed in past 12 monthsQ: Have you borrowed fast cash in the past 12 months, ie small cash loan raised for

a short time by eg text message?

% of respondents (n=2,393 in 2009), yes replies

Borrowing plans

13

12

12

11

10

9

0 5 10 15 20

2004

2005

2006

2007

2008

2009

% of respondentsYes

Q: Are you planning to take a new loan or credit during the next 12 months?

Borrowing plans broken down by type of credit

4

1

5

5

1

1

6

3

1

1

4

4

1

1

5

3

1

1

6

0 5 10 15 20

Housing loan

Consumer creditfrom a bank

Other consumercredit *)

Student loan

2004 2005 2007 2008 2009

Q: Which of the following credits are you planning to take?

% of respondents

*) Other consumer credit = Bank account with credit facility, loyal customer card credit of a store, other card credit (term of payment over 2 months) or hire purchase credits

Housing loan repayment period, 2009

63

153

94

233

223

61

0 5 10 15 20 25

1 - 5 years6 - 9 years

10 years11 - 14 years

15 years16 - 19 years

20 years21 - 24 years

25 years26-29 years

30 years40 years

% of housing loans taken during the last two years (n=239)

Q: What was the original repayment period of your housing loan?

Average repayment period in: 1998, 11 years 2005, 16 years 2006, 17 years 2007, 18 years 2008, 19 years 2009, 19 years

(17 in 2008)

(25 in 2008)

10 (10 in 2008)

Average home loansQ: How big is your home loan at the moment?

20,300

30,20035,800

42,00044,900

58,30065,300

71,50076,500

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

1999 2001 2003 2004 2005 2006 2007 2008 2009

(% of respondents who hold a home loan, n=717 in 2009)€

Average amount of new housing loans

Q: How big a housing loan did you take last?

€

February 2007n=268, %

January 2008n=247, %

January 2009n=221, %

Less than 10,000 1.2 2.7 2.4

10,001–20,000 9.8 4.1 4.6

20,001–40,000 10.5 10.5 9.7

40,001–60,000 17.1 14.0 7.6

60,001–80,000 16.3 15.1 11.8

80,001–100,000 13.8 16.1 16.3

100,001–150,000 19.2 19.5 26.4

Over 150,000 12.1 18.0 21.2

On average, € 85,300 96,200 107,500

(% of respondents with housing loans raised in the past two years)

31 38 48

Ratio of debt service costs to disposable income

22 23 22 22 22 2225

27 28 28 28 28

0

10

20

30

40

2004 2005 2006 2007 2008 2009

Loan Housing loan

%, covers those who have loan of any kind (n=1,187 in 2009) or home loan (n=717 in 2009)

Q: Approximately how many per cent of your monthly net income is used for installments and interest on loans?

Ratio of debt service costs to disposable income

3

6

10

22

18

31

2

6

10

20

20

28

0 10 20 30 40

Over 50 %

41 - 50 %

31 - 40 %

21 - 30 %

11 - 20 %

Less than 10 %

2009 2008

% of all borrowers (n=1,187 in 2009)

Q: How many per cent of your take-home pay is spent on interest and loan repayments?

Changes in repayment plans

76

7

10

74

11

10

77

10

9

76

10

7

0 20 40 60 80 100

Repaid according to plan

Repaid sooner

Repaid later

2006 2007 2008 2009

Q: Have you repaid the loans according to the original plan or have you made changes to the original repayment plan?

% of respondents who hold a loan or credit (n=1,187 in 2009)

Risk factors in personal finances

% of respondents (n=2,393 in 2009)

Q: Which of the following risk factors do you see as a threat to your financial situation?

10

13

16

23

32

57

42

0 10 20 30 40 50 60

Value of home falls

Savings or investments lose value

Temporary layoff

Unemployment

Loss of personal or household income (eg illness, disabilityfor work, divorce, death of family member)

Breakdown of individual risks (n=1,364):

Some risks seen as threat

No risks seen as threat

Preparing for risks in personal finances

% of those who felt risks are looming and were prepared for the risks (n=742 in 2009)

Q: What is your way to prepare for risk factors in your personal finances?

2

2

2

3

4

4

8

9

10

57

0 10 20 30 40 50 60

Rescheduling loan payments

Selling assets

Taking care of own health

Just watching developments

Working harder

Relying on trade union/Unemployment fund

Investments

Frugal living

Insurance

Savings

Risks affecting home loans

% of those who see risks that may affect their home loan (n=119 in 2009)

Q: What risks do you think may affect your home loan?

4

6

7

12

12

25

40

0 10 20 30 40 50

Loss of income

Loss in value of home/ Changes in property prices

Financial problems in household

Global situation, recession

Health factors, illness, death

Interest rate rises

Work-related factors

17% of mortgage holders see risks, 83% do not

Interest rate cap

23

30

40

21

30

43

0 20 40 60

Loan protected by interest ratecap

Home loans raised less than ayear ago

Planning to cap interest rate

2008 2009

Q: Do you have an interest rate cap on your loan to ensure interest payments stay within agreed limit?Are you going to have your interest rate capped to protect against rate

rises above agreed?

% of holders of home loan or consumer credit from bank (n=962 in 2009)% of those who are planning to raise a home loan or consumer loan from bank (n=185 in 2009)

Loans covered by loan insurance

20 2226 26 27 28 28 28

34 36 37 37 37 37

05

1015202530354045

2001 2003 2004 2005 2006 2007 2008 2009

Loan Housing loan

Q: Are any of your loans covered by payment protection insurance which secures repayment of the loan?

% of respondents who have a loan (n=1,187 in 2009) or housing loan (n=717 in 2009)

Preparing for interest rate rises

% of respondents who have a housing loan (n=717 in 2009)

Q: Are you prepared for possible interest rate rises which would raise the cost of servicing your housing loan?

767168

32

59

70

70

77

72

0 20 40 60 80 100

All

Less than €10,000

€10,001-€20,000

€20,001 - €40,000

€40,001 - €80,000

Over €80,000

2006 20072008 2009

Why are you not prepared for interest rate rises

20

8

10

11

4

4

23

15

8

7

5

2

14

11

8

14

4

6

0 5 10 15 20 25

Small loan / Much of the loan already repaid

No need

No problem, believes is able to repay, earns agood income

Does not believe rate will rise much / Considersrate is steady

Fixed interest rate

Constant payment loan, paymentshave remained unchanged

2007 2008 2009

% of respondents who are not prepared for interest rate rises (n=230 in 2009)

Q: Are you prepared for interest rate rises and resulting rise in debt service costs? If you are not prepared, why not?

15

8

7

7

15

7

5

3

0 5 10 15 20

By saving in advance

Rises taken into account on application / Monthly repayment moderate

Extending repayment

Choosing fixed interest rate

Negotiating interest rate with bank

2008 2009

Preparing for interest rate rises

% of mortgage holders who are prepared for interest rate rises (n=487 in 2009)

Q: How are you prepared for interest rate rises

Typical ways of paying bills

4

16

9

30

39

40

16

23

14

34

17

66

13

11

3

12

6

3

75

7

10

4

3

20

29

10

13

16

39

10

12

34

5

9

68

0 10 20 30 40 50 60 70 80

1994 1999 2001 2003 2006 2008 2009

Q: What is the most typical way you pay your bills?

% of respondents

Internet (via PC)

ATM

Direct debit

Payment service with service envelope

At branch

Most common ways of paying bills in different age groups in 2009

" Q: What is the most typical way you pay your bills?

% of respondents

56

09

92

0 1

96

2 1

88

4 1

77

93

59

18

5

37 33

5

0

20

40

60

80

100

Internet (via PC) Direct debit At branch

15-17 (n=121) 18-24 (n=275) 25-34 (n=404) 35-44 (n=401)45-54 (n=461) 55-64 (n=452) 65-74 (n=279)

Paying for daily shopping

% of respondents

Q: How do you pay for your daily shopping normally?

71

17

3

2

21

3

30

2

3

43

45

7

2

1

5

2

35

45

10

8

1

2

6558

1

8

49

37

0 10 20 30 40 50 60 70 80

Cash

Bank card

Visa Electron card

Credit card

Retailer'spayment/credit card

1999 2001 2003 2006 2008 2009