The Russian Ministry of Finance and the Demoscope Research Center have published findings from the first wave of the Consumer Finance Survey (the Study of Financial Behaviours and Savings Habits of the Russian Population); these are summarised in the report Income, Assets, and Liabilities of Russian Households.
The Demoscope survey was conducted in September and October 2013 by Dilyara Ibragimova, Associate Professor of the HSE's Department of Economic Sociology, Olga Kuzina, Professor of the HSE's Department of Economic Sociology, and Mikhail Kosolapov, the Demoscope’s CEO. Its purpose was to examine the financial situation of Russian households and their sources of income, and to assess the income gap between rich and poor. In addition, the sociologists examined the size of household savings and debt, and the value of their financial and non-financial assets.
They surveyed 6,103 households (12,650 people) in 158 cities and rural settlements across 32 Russian regions. The survey sample is representative of the Russian population in its entirety and by different socio-demographic groups. In each household surveyed, a separate questionnaire was administered to collect general information about the household, and each member of the household aged 18 and over responded to an individual questionnaire.
The study found that the average Russian family earns a combined monthly income of 39,300 rubles (15,500 rubles per person), and wealthier Russians make approximately five times more than poor families, i.e. 33,100 vs. 7,670 rubles.
Financial security does not correlate with age, but instead correlates with level of education and place of residence: families living in bigger cities tend to have higher incomes. Thus, the average per capita monthly income is 23,800 rubles in Moscow and St. Petersburg and 11,200 rubles – half as much – in small towns and rural areas.
Most families (65.4%) have two sources of income, salaries being the most common source mentioned by 77.4% of the households surveyed, followed by pensions mentioned by 55.5% of the families.
Almost a third (31.9%) of households reported receiving various subsidies and reliefs, and 21.3% were receiving child allowances, unemployment benefits, and student scholarships.
19.1% of households admitted receiving private financial assistance, often from relatives; 4.6% subsisted on produce from their own garden, and 5.0% earned revenues from the lease of their property.
Poor families are more likely to receive subsidies, while wealthier households are more likely to have income sources such as salaries, rental property, and private transfers.
Only 45.1% of the households reported having savings, and the average balance of current bank accounts stood at 36,900 rubles, while the average amount in deposit accounts stood at 188,100 rubles. The wealthiest categories of surveyed households owned half of all the funds in bank accounts and deposits.
Financial planning horizons are extremely short: 43% of the respondents reported making plans for a month, 25% planned for the next few months, and only 9% of Russians made plans for a year or more in the future.
The purpose of most savings is to serve as a rainy day fund, according to 60.7% of the households, followed by savings as security for old age (26.5%), savings for medical treatment (24.4%), and for vacation, entertainment, and travel (21.5%), with 20.9% of the households saving for real estate.
The amount of savings deemed sufficient to provide for contingencies averages 114,900 rubles in Russia, or one-third of the average household's annual income. In the U.S., the median value of desired contingency funds, according to households, stands at five thousand dollars, which is over three times higher than the corresponding median value for Russia (50,000 rubles). However, given higher incomes in the U.S., the ratio of desired contingency savings to annual income is almost the same between the U.S. and Russia, the study's authors note. In order to build such contingency funds, households need to set aside about one tenth of their annual income, i.e. 10.8% in the U.S. and 13.9% in Russia.
In addition to this, Russians can count on relatives or friends if necessary: 45.6% of the respondents are certain that they can borrow 50,000 rubles from their social circle at any given moment.
Many Russians are still outside of the banking system, with only 55.2% of the respondents having a bank account, and just 9.9% holding deposit accounts at banks. To compare, the 2010 Survey of Consumer Finance found 92.5% of households in the U.S. and 96.4% in the Euro area have a bank account.
More than a third of Russian families (38.2%) keep savings averaging 43,700 rubles at home. However, the proportion of those who have no savings other than a stash under the mattress is quite small at 10.3%.
Financial instruments other than cash deposits are unpopular in Russia. In 2013, only 5.6% of all Russian households held any securities – of these only 4.5% reported holding corporate shares, while public demand for other types of assets was extremely low at 0.6% for savings certificates, 0.5% for shares in mutual funds, and 0.2% for bonds; just one household in the entire sample held bank-managed mutual fund certificates.
It should be mentioned that 41.2% of shareholding families received the stock free of charge as employees of public enterprises undergoing privatisation, and another 24.2% were given the shares as part of Russia's voucher privatisation scheme. Only 2.6% of the surveyed shareholders bought the stock via a brokerage company and another 12.4% purchased the shares directly from the issuing company, usually in what was called 'popular IPOs' including those held by Sberbank, Rosneft, and VTB.
The average total value of securities held by a Russian family who had any stood at 132,600 rubles.
In addition to that, 4.0% of the households reported having e-money accounts, in particular with Yandex Money (51%) and QIWI (43.4%), followed by WebMoney (24.5%) and PayPal (12,5%). For households with e-money accounts, the average balance at the time of the survey stood at 1,863 rubles per household, with a median of 100 rubles.
The survey found just 1.3% respondents (160 people) who were making voluntary contributions to private pension funds, even though anyone can do so irrespective of allocations to the accumulative component of retirement pensions. For those who were making voluntary pension contributions, the average monthly payment stood at 1,066 rubles.
1.4% of the respondents (183 people) participated in the state’s program of co-financed pensions, and their average annual contribution stood at 5,090 rubles in 2012.
0.6% of the respondents (73 people) held pension savings policies with insurance companies, contributing on average 1,651 rubles per month.
Overall, the researchers found slightly more than 15.0% of the households with at least one member consciously managing his or her future pension.
While Russians are behind Europeans and Americans in terms of the value and types of their financial assets, they own plenty of non-financial assets – 88.4% of the surveyed Russian households had some type of valuable property, in particular real estate and cars: 77.5% owned their house or apartment, 38.2% owned a car, and 13.1% owned a garage.
Property ownership makes most Russians – even those without bank accounts – actual millionaires. The median value of a Russian family's primary residence stands at 1.6 million rubles, which is 4.7 times lower than the European median (180,300 euro, or 7,752,900 rubles) and 3.3 times less than the U.S. median (170,000 dollars, or 5,440,000 rubles), except for residents of Moscow and St. Petersburg, where the average family residence costs 7.4 million rubles.
In Russia, 32.3% of the households own a second property in addition to their residence – compared to 23.1% of the European households. However, additional property rarely brings extra income, since only 5% of the families lease their property out, while most use it as a summer house (dacha).
Contrary to prevalent belief, Russians do not take out too many loans, according to the study's authors who did not find any evidence of the dangerous over-indebtedness which is often spoken about.
Only 31,9% of the surveyed Russian households had outstanding debt on one or more loans; to compare, 74.9% of households in the U.S. and 43.7% in western Europe, including 47.4% in Germany, 46.9% in France, 65.7% in the Netherlands, and 59.8% in Finland, had outstanding loan debts in 2010.
22% of Russian households are repaying consumer loans, but only 5.6% of the borrowers (or 1.8% of all households) have more than three outstanding loans, the average being 1.7 loans per family.
Loans taken to finance real estate purchase account for almost half of the outstanding debt volume (46%). The average outstanding debt is 214,200 rubles on all types of loans, and just over 800,000 on loans financing real estate purchase or construction.
The combined household debt to asset (including financial and non-financial assets) ratio is 5.6%, and average monthly repayments do not exceed 25% of the borrowers' total monthly household income.
The study's authors note that according to the European Commission, spending more than half of the family income on loan repayment is a sign of over-indebtedness. Just 9.1% of Russian households with outstanding loans, or 2.6% of the total sample fall in this category.
Almost 20% of the households use credit cards, with an average of 1.37 cards per household. Most respondents find it more convenient to borrow from a bank than from family or friends.
Only one in ten families takes 'payday loans', usually small amounts – the median being 10,000 rubles – from family or friends. However, payday borrowers tend to take loans from more than one source, bringing the total outstanding debt to 50,000 thousand rubles (median).
The amount of outstanding debt correlates with household income, and wealthier families tend to owe larger amounts; thus, the poorest group in the sample usually borrow up to 5,000 rubles, while the wealthiest borrow six times more, up to 30,000 rubles (medians).