„Financial Freedom Report 2023: Positive Perception Despite Economic Challenges. LV 1871 Warns Against Neglecting Financial Independence in the Shadow of Other Crisis Scenarios“
Despite the ongoing economic challenges and persistently high inflation, the Financial Freedom Report 2023 reveals a more optimistic outlook regarding personal financial situations compared to the previous year. However, LV 1871 cautions against losing sight of financial independence, retirement planning, and security. In the third Financial Freedom Report, LV 1871 surveyed approximately 2,500 people in Germany in August 2023, seeking their views on financial freedom.
„The majority of Germans perceive their personal financial situation more positively than the previous year, despite the tense economic situation and high inflation. This trend is reflected in the Financial Freedom Index. However, we must not be deceived by appearances, as the risks endangering people’s financial independence persist or even worsen, particularly in the current environment,“ says Hermann Schrögenauer, LV 1871 Board Member.
Financial Freedom Index 2023: Fewer Worries about Personal Finances
In 2023, respondents expressed less worry about their private finances, with 36.9% feeling neutral or positive about their financial situation, marking a 9.7% increase from the previous year. Despite prevailing concerns about inflation and the current economic situation (59.8%), other issues like the Ukraine conflict (70.5%) and fear of societal division (62.5%) seem to overshadow the actual threats to the economic downturn.
This is also evident in the Financial Freedom Index, which increased from 40.6% in 2022 to 44.8% in 2023. However, the average respondents still fall within the financial normalcy range, indicating a transition to the next level of financial control has not yet occurred. Financial normalcy allows people to sustain their livelihood through their own income, yet dependence on a single income source jeopardizes this seemingly secure state.
Financial Independence – Clear Perspectives for Gen Y
Even in times of crisis, financial independence remains an essential aspect of freedom for the majority (63%) for the third consecutive year. Women, in particular, place significant value on financial freedom (almost 70%) compared to men (55.7%). When it comes to specific perceptions of financial freedom, the majority of respondents (58%) prioritize financial independence in all aspects of life. Other aspects like realizing financial dreams (13.7%), emancipation from work (11.5%), and a fixed salary (5.1%) remain at relatively low levels in 2023.
The age group of 30-39, representing Generation Y, stands out. While in the previous year (2022), over 70% of millennials associated financial freedom with being financially independent in all aspects of life, only 55.1% agree with this now. Their understanding of financial freedom expands to include being able to „financially fulfill dreams“ (20.8%) and „not having to work“ (18.6%), both of which have doubled in percentage points compared to 2022.
Financial Knowledge as an Emancipation Factor for Financial Freedom
One increasingly crucial factor for financial independence is individual financial knowledge. Exactly 7.0% of respondents state that they have continued to educate themselves about finances since the previous year. Investments in stocks, funds, and ETFs have slightly increased, rising from 7.6% in 2022 to 10.3% in 2023. However, a significant gender gap is evident: 15.6% of male respondents are increasingly investing their private assets in stocks, funds, or ETFs, compared to only 4.9% of female respondents. Furthermore, with the ongoing discourse on climate and the environment, more people want to know the specifics of their insurance and savings products. For the first time, six percent mention that they pay more attention to sustainable financial products since the previous year. This underscores the integration of these aspects into insurance offerings and guidance by brokers as the new standard.
LV 1871 Financial Freedom Report 2023
In the representative survey on Financial Freedom by LV 1871, conducted by Civey in August 2023, 2,500 individuals in Germany aged 18 and above participated. The participants answered questions about their understanding of (financial) freedom and their feelings and concerns regarding finances, retirement planning, and security.
Quelle:presseportal
