Portugal’s Families Boost Spending and Upgrade Homes as Savings Slide

Households across the euro area have begun dipping a little deeper into their wallets. Latest Eurostat data show that families are saving less and investing only marginally in the months immediately before the 2025-26 winter. While neither shift is dramatic, the figures mark a clear departure from the pandemic-era tendency to stockpile cash and hold off on large purchases.

Consumption picks up speed

An important takeaway from the third-quarter numbers is that consumer spending is now rising faster than disposable income. Individual consumption jumped 0.9 %, while household income inched up 0.6 %. That pushed the euro-area saving rate down to 15.1 %, compared with 15.4 % one quarter earlier – still high by historical standards, but heading south.

Portugal versus its neighbours

Portuguese households are firmly in the middle of the pack. The national saving rate stood at 12.5 % of disposable income, noticeably below Germany’s 19.6 % but safely above Spain’s 11.97 %. The investment picture is similar: Germany continues to channel money into residential upgrades, while Italian families – buoyed by generous tax credits – record the bloc’s highest 10.77 % investment rate. Portugal, with its long-running housing squeeze, remains closer to the euro-area average.

Housing still drives household investment

Family investment across the single currency zone held at 9 % of income, essentially flat quarter-on-quarter. That stability hides a minor 0.7 % dip in actual capital formation, a reminder that renovation and property purchases – the bulk of household investment – are highly sensitive to mortgage costs. With the European Central Bank signalling that policy rates have peaked, real-estate agents from Lisbon to Lyon expect a modest revival in 2026.

Outlook from Brussels, Frankfurt and Paris

📌 The ECB forecasts a gradual slide in the saving rate over the next three years as real wages recover and precautionary cushions shrink.📌 The OECD shares that view, citing resilient labour markets across the continent.📌 Private forecasters such as Trading Economics see the euro-area saving rate hovering near 14 % by 2027.Economists agree on one driver: higher real income growth should unlock pent-up consumption, especially for durable goods postponed during the inflation spike of 2022-23.

Why it matters for Portuguese families

• Mortgage repricing: Any ECB rate cuts in 2026 will filter quickly into Portuguese variable-rate loans, freeing cash for consumption.

• Energy bills: Lower gas and electricity prices are already relieving household budgets, a trend that could accelerate the fall in the saving rate.

• Government incentives: Lisbon’s refurbishment subsidies mean investment in home upgrades may outpace the euro-area average next year.

Key figures in one glance

• 15.1 % euro-area saving rate, Q3 2025

• 0.9 % rise in household spending

• 9 % euro-area investment rate

• 12.5 % Portuguese saving rate

• 19.6 % German saving rate (highest)

• 10.77 % Italian investment rate (highest)

Bottom line

The euro-area consumer is edging back toward pre-pandemic habits: spending a bit more, squirrelling away a bit less. For Portugal, where household finances were long constrained by low wages and expensive housing, the turning point is welcome but fragile. The shape of 2026 will depend on how quickly wages outpace prices – and on whether central-bank relief translates into lower monthly repayments for the country’s heavily indebted homeowners.