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Journalism of Courage
Indian households added to their wealth at a faster clip in 2024, with gross financial assets rising 14.5 per cent during the year — marginally higher than the 14.3 per cent growth seen in 2023 — driven largely by stronger investment in securities, a new report has said.
Securities led the charge with a 28.7 per cent increase, while insurance and pensions — holding a larger portfolio share of 32.5 per cent — grew by 19.7 per cent. Bank deposits, still the dominant asset class at 54 per cent, rose by 8.7 per cent, the Allianz group, one of the world’s largest insurance and asset managers, said in the report.
Adjusted for inflation, financial assets grew a robust 9.4 per cent, lifting purchasing power 40 per cent above pre-pandemic levels, an impressive contrast to Western Europe, where it remains 2.4 per cent below 2019, it said.
India’s expanding middle class continues to reshape global wealth dynamics, contributing significantly to the rise of emerging markets in the global middle wealth segment. Meanwhile, liability growth moderated to 12.1 per cent, in line with long-term averages, though the household debt ratio climbed to 41 per cent, up 8 percentage points over the last decade. Net financial assets advanced by 15.6 per cent, reaching US $ 2,818 per capita, Allianz said.
Over the past two decades, India’s real per capita financial assets have surged fivefold, marking one of the most impressive wealth growth trajectories among emerging markets.
Rich getting richer in India
Wealth inequality remains stark in India despite rapid growth. In 2004, the richest 10% of Indians controlled 58% of the country’s wealth. Two decades later, their share has climbed to 65%, highlighting the growing concentration of riches, the Allianz report indicated. The gap between the average and median wealth has also widened, with the ratio rising from 2.6 to 3.1 over the same period — a sign that prosperity is not evenly distributed.
At the same time, overall wealth has soared. Net financial assets per capita in India are now 13 times higher than they were in 2004, outpacing even China, where wealth rose twelvefold. This surge places India among the world’s fastest wealth-growing nations. Yet, as the Allianz report cautions, reconciling such breathtaking growth with fairness and distributive justice remains a major challenge, it said.
Global savers ride stock boom, India still largely sticks to deposits
Owning securities, particularly stocks, is key for asset growth. In this respect, the last two years have been extremely gratifying for savers. In both 2023 (11.5 per cent) and 2024 (12.0 per cent), securities grew almost twice as fast as the other two asset classes: insurance/pensions (6.7 per cent and 6.9 per cent, respectively) and bank deposits (4.7 per cent and 5.7 per cent, respectively). However, the extent to which savers benefit from rising securities prices varies widely between countries and regions due to differences in portfolio structures.
Notably, it is primarily North American savers who invest in securities, accounting for 59 per cent of portfolios. In Western Europe, for example, this figure stands at around 35 per cent.
In India, it’s just 13 per cent as Indians mostly depend on bank deposits. Price increases, therefore, have less of an impact on overall asset growth. This means that hard savings efforts are required. “You have to work for your money,” says Kathrin Stoffel, co-author of the report.
“It’s smarter to let the money work for you. Like the Americans. Price increases in stock markets are mainly responsible for asset growth in the USA.”
US leads, adding 50 pc to world’s financial asset growth
Over the past 10 years, the financial assets of American households have grown in line with the global average. But in 2024, their growth was even higher. This is in stark contrast to Western Europe and Japan, where growth lagged the global average by over 2 pps (percentage points) and just under 4 pps per year, respectively. “Financial asset growth in the US is simply amazing,” said Ludovic Subran, chief economist of Allianz.
“In 2024, half of the growth in global financial assets was generated in the US alone. Over the last decade, this figure stood at 47 per cent. China, on the other hand, accounted for 20 per cent, while Western Europe accounted for 12 per cent. In terms of financial assets at least, the idea that other countries have taken advantage of the US is unfounded,” Subran said.
