Sweden has encouraged 3.8 million households to start investing through a tax-friendly savings plan. Industry voices are calling on Europe to follow the Swedish example to help channel the 1,400 billion euro in household savings into investments.
Banks, asset managers, and fund providers across Europe are grappling with how to persuade savers to invest. Governments, too, are looking for ways to put dormant capital to more productive use.
The Swedish model of the Investeringssparkonto (ISK) — a tax-advantaged account where capital gains and dividends are not taxed — is seen as a solution by both the European Commission and industry association Dufas.
Within its new Savings and Investments Union, the European Commission is developing a blueprint for a pan-European Savings and Investment Account (SIA). By offering tax incentives, Brussels aims to encourage European savers to invest more.
The Dutch industry association Dufas supports this EU-wide SIA model. “Tax benefits and simplicity make investing more attractive,” said director Jeroen van Wijngaarden. “To raise awareness among savers, governments should also actively campaign,” he added.
Wealth in equities
Swedes invest in equities to a far greater extent than other Europeans. More than half of Swedish household financial wealth is invested in stocks, compared with just 23 percent in the Netherlands and 21 percent in Germany.
Direct and indirect household equity ownership
In 2024, Swedish national wealth climbed to 40,170 billion kronor, the highest level ever recorded. According to economist Dunia Malezai of Statistics Sweden, this surge is mainly due to strong appreciation in financial assets. Wealth in financial holdings—such as stocks, deposits, and owner-occupied apartments—rose from 88,031 billion to 95,584 billion kronor.
Best practices
Simplicity and accessibility are crucial to encouraging households to invest, says Dufas. “The ISK model in Sweden has shown that clear tax incentives and ease of use can drive broad participation, particularly among younger and first-time investors,” said Van Wijngaarden. “The model has also proven itself elsewhere, such as in the United Kingdom, where 22.3 million adults use the Individual Savings Account (ISA) to invest.”
Europe offers several successful examples. In the Netherlands, automatic pension savings have resulted in one of the largest pension funds in Europe. In Germany, periodic investing through the ETF-Spärplan, with minimum contributions starting at 1 euro, is rapidly gaining popularity: the number of plans rose from January 2014 to December 2024 to nearly 5 million.
Number of ETF-Spärpläne in Germany
“Sweden, Germany, and the United Kingdom provide best practices. The knowledge is there, but what we need now is a Europe-wide rollout,” said Van Wijngaarden.
Not about new products
A European savings plan should offer a broad range of products, including individual stocks, Ucits, Eltifs, ETFs, and retail funds. While a key goal of the Savings and Investments Union is to provide more financing for European companies, Dufas considers it undesirable to require participants to focus primarily on European firms.
The organization questions the geographic restriction tied to the “Finance Europe” investment label, which would direct participants mainly into European companies. Such a limitation, it argues, could conflict with proper diversification and risk-adjusted returns. Dufas also sees the mandatory five-year investment horizon as an obstacle: many retail investors find it inflexible, while flexibility is precisely what makes long-term investing appealing.
“Dutch investors are already shifting more toward European assets. The extra geographic restriction to fund the European economy is politically understandable, but the question is whether it is necessary and in the investor’s interest. The focus should be on activating savers to start investing, not on creating even more products,” said Van Wijngaarden.