Fidelity: Behavioral change could free up €4.8 tn for the European economy
A new report from New Financial, a European think tank, developed in partnership with Fidelity International, unveils a bold vision to transform the EU’s financial landscape and unlock up to €4.8 trillion in long-term capital over the next 10 years.
Titled “Designing Savings and Investment Accounts in the EU”, the report draws on international best practices to offer a 10-point blueprint for policymakers across the EU.
The publication comes as the European Commission advances its “Savings and Investments Union” (SIU) strategy, which aims to encourage households to shift funds from low-yielding cash deposits into more productive long-term investments, and coincides with the announcement of a "Finance Europe" label for savings products which aims to funnel more savings into the continent’s economy.
With nearly €11 trillion held in cash across the EU in 2023, the report argues that even modest changes in savings behaviour could have a significant economic impact.
The report finds that the EU’s long-term capital pools, currently at 239% of GDP, are significantly smaller than those in the US and UK. It highlights that only a few EU member states currently offer dedicated savings and investment accounts and draws on a comparative analysis of 25 global frameworks to identify the factors that contribute to their success.
Among these, Sweden’s ISK account stands out as a model of success, with assets equivalent to 29% of Sweden’s GDP just a decade after launch. This success is attributed to the account’s simplicity, flexibility, and clear tax incentives.
New Financial estimates that if similar accounts were adopted across the EU and saw take-up in line with the most successful accounts in the report’s sample, they could collectively attract between €1.5 trillion and €4.8 trillion in investment over the next decade.
Blueprint for reform:
The report outlines 10 recommendations for designing effective savings and investment accounts, including:
- Simplicity: Ensure accounts are easy to open, manage, and understand, with automated tax reporting and broad investment options.
- Attractive tax incentives: Offer clear and equitable tax benefits to encourage participation.
- High or no deposit ceilings: Avoid restrictive limits that could deter meaningful investment.
- No withdrawal restrictions: Build trust and flexibility by allowing savers to access funds without penalties.
- Transparency on European investment: Encourage, but do not mandate, investment in EU assets to support the broader economy.
It also calls for public awareness campaigns, junior investment accounts to foster early financial literacy and limiting changes to build trust.
Christian Staub, Head of EMEA and Global Client Propositions at Fidelity International, said: “This report underscores the urgent need for innovative savings frameworks that empower individuals and strengthen Europe’s financial future. The findings show that with the right design -simple, flexible, and supported by smart tax incentives - savings accounts can become a powerful tool for both personal financial security and economic growth. We are proud to support this initiative and its call for bold, practical reforms that can deliver real impact across the EU.”
Maximilian Bierbaum, Head of Research at New Financial and lead author of the report, added: “Europeans are great savers, but not always great investors. Too much capital is sitting idle in cash, eroding in value and missing the opportunity to support long-term prosperity. This report shows that with the right policy tools, we can change that. The ISK in Sweden, the TFSA in Canada, and the ISA in the UK all demonstrate how well-designed accounts can shift behaviour at scale. Our blueprint offers a practical path forward for EU policymakers to unlock this potential.”