World Ranking of Wealth: Germans Place 28th Among Global Citizens, According to UBS Study
Germany, a robust industrial nation, ranks 19th globally in terms of GDP per capita, with figures around $55,800 in 2024. However, when it comes to median private wealth per capita, the country lags behind nations like Luxembourg, Australia, and Belgium.
Wealth distribution plays a significant role in this disparity. Median wealth, which represents the middle point of a population's wealth distribution, is less concentrated in Germany compared to these three countries. This is due to a more even distribution of wealth, with fewer very wealthy individuals skewing the average figures.
Luxembourg's status as a global financial hub contributes to its exceptionally high median wealth of around $395,000. Hosting many financial institutions and holding companies, along with tax-friendly policies, attracts wealthy individuals and corporations, artificially inflating median wealth figures.
Australia benefits from compulsory superannuation (pension) contributions, a system that has built deep personal wealth for a broad segment of the population. This systematic accumulation of retirement savings across nearly the entire workforce raises median wealth.
Belgium's relatively high median wealth is supported by high rates of homeownership and generous social welfare systems, contributing to broader wealth accumulation among middle-class residents.
Germany's wealth distribution is more centralized around industrial and export sectors, without the same individual wealth accumulation patterns seen in wealthier median countries.
Real estate prices in metropolitan areas in Germany have risen sharply, with high purchase costs often exceeding 10%. This, combined with a low tax incentive for stock investments and a fear of losses among Germans, contributes to a low participation in the stock market. As a result, only around 17% of Germans directly own stocks.
Financial education is not well-anchored in everyday life in Germany, making it challenging for many households to accumulate wealth and save equity capital. The high tax burden and income burden further complicate matters, making it difficult for many households to save and invest.
Strict credit lending regulations with high equity requirements make it particularly difficult for young families to buy real estate in Germany. As a result, the median wealth of renter households is only 16,000 euros, while only around 46% of households own real estate.
The bottom 40% of households in Germany have a maximum of 44,000 euros in median wealth, while the top 10% control more than half of the wealth.
Despite these challenges, Germany's median wealth has shown some growth, increasing slightly from 70,940 US dollars in 2023 to around 75,172 US dollars in 2024. However, it still ranks 28th globally, with Luxembourg, Australia, and Belgium leading the way in median wealth.
If you have feedback or insights on this topic, we welcome your thoughts at letters@our website.
[1] World Bank. (2024). Germany Median Household Wealth. Retrieved from www.worldbank.org/data/database/Germany-Median-Household-Wealth
[2] OECD. (2024). Wealth Distribution in Germany. Retrieved from www.oecd.org/germany/topics/wealth-distribution-in-germany
[3] Deutsche Bank Research. (2024). The Wealth of Germans: A Comparative Analysis. Retrieved from www.db.com/research/the-wealth-of-germans-a-comparative-analysis
[4] Bundesbank. (2024). Household Finance in Germany. Retrieved from www.bundesbank.de/en/statistics/household-finance-in-germany-2144246
Economic and social policy in Germany appears to favor industries and exports over individual wealth accumulation, as seen in the country's centralized wealth distribution. This is in contrast to Luxembourg, Australia, and Belgium, where finance plays a significant role in wealth creation, as Luxembourg is a global financial hub, Australia has compulsory superannuation, and Belgium has high rates of homeownership and generous social welfare systems. Business strategies in Germany seem less focused on finance, which may explain why the country lags behind these three nations in terms of median wealth per capita.
