Indian household debt rises 14.3%, financial assets grow 9% in 2025: Report | Personal Finance

Indian households added financial assets in 2025, but their liabilities grew considerably faster, putting pressure on the pace of wealth accumulation. Household liabilities rose 14.3 per cent during the year, compared with 9 per cent growth in gross financial assets, according to the Allianz Global Wealth Report 2026.

 

The divergence means that while households continued to build savings and investments, the increase in borrowing absorbed a larger part of the gain. As a result, net financial assets rose by only 6.8 per cent in 2025, slower than the growth in gross financial assets.

 

Financial assets cross $5 trillion

Gross financial assets held by Indian households increased 9 per cent in 2025 to $5.3 trillion, Allianz said. The growth was slightly ahead of the global average of 8.6 per cent, although it was below the 9.8 per cent average for the Asian economies covered by the report, excluding Japan and China.

  

The growth was not evenly distributed across different financial products. Insurance and pensions recorded the fastest increase at 11.4 per cent, followed by deposits at 9.8 per cent and securities at 6.1 per cent.

 

Deposits, however, remained the largest component of Indian household financial assets, accounting for 40.2 per cent of the portfolio. Securities made up 32.7 per cent, while life insurance and pension assets accounted for 26.7 per cent.

 

This makes India’s portfolio structure different from markets where households have much greater exposure to shares and other market-linked assets.

 

Debt growth is eating into wealth gains

Household liabilities increased 14.3 per cent to $1.59 trillion in 2025, according to Allianz. That was substantially faster than the 9 per cent increase in financial assets.

 

Net financial wealth is calculated after deducting liabilities from financial assets. Consequently, India’s net financial assets increased 6.8 per cent during the year.

 

The contrast with the global picture is notable. Worldwide, household financial assets increased 8.6 per cent in 2025, while liabilities rose only 3.4 per cent to EUR56.9 trillion. This pushed global net financial assets up 10.1 per cent to EUR211.5 trillion.

 

India therefore saw the opposite balance-sheet pattern in 2025: liabilities grew faster than assets.

 

The report does not break India’s 14.3 per cent liability growth down by individual loan categories. Therefore, the figure alone cannot establish how much of the increase came from various kinds of loans.

 

Real wealth has still grown sharply since 2019

 

The one-year slowdown in net wealth growth needs to be viewed against India’s longer-term performance.

 

After adjusting for inflation, Indian households’ financial assets were 57 per cent higher in 2025 than in 2019. This compares with real growth of 39.6 per cent for the Asian countries covered by Allianz, excluding Japan and China, and 22.9 per cent globally.

 

In 2025 alone, nominal financial-asset growth of 9 per cent translated into real growth of 6.7 per cent after accounting for inflation.

 

So, despite the faster increase in liabilities, Indian households have built a substantially larger pool of financial assets over the past six years.

 

Deposits remain central to household wealth

 

The data also shows why the composition of savings matters.

 

Globally, securities such as shares, bonds and investment funds increased 12.4 per cent in 2025, compared with 5.7 per cent growth in deposits and 5 per cent in insurance and pension assets. Securities accounted for a record 46.9 per cent of global financial assets.

 

Markets accounted for about four-fifths of the increase in global financial wealth in 2025, while fresh savings declined 5.4 per cent to EUR4.1 trillion.

 

India’s lower securities growth of 6.1 per cent and high 40.2 per cent allocation to deposits mean Indian households were less directly exposed to the global stock-market gains that drove much of the increase in wealth elsewhere.

 

Wealth remains concentrated

 

The report also points to a significant concentration of financial wealth in India. The richest 10 per cent of Indian households held 65 per cent of net financial assets in 2025. Their share increased by 6.8 percentage points between 2005 and 2025.

 

India’s net financial assets per capita stood at $2,539 in 2025, up 6.8 per cent from the previous year. The country ranked 49th in Allianz’s ranking of countries by net financial assets per capita, unchanged from a year earlier.

 

This means the headline growth in household wealth does not translate evenly across households. The pace at which assets are accumulated, the amount of debt taken on and access to market-linked investments can all influence the eventual increase in net wealth.

 

What the numbers mean for households

 

For Indian savers, the report highlights three separate trends rather than a simple increase in wealth.

 

First, financial assets are continuing to grow, and their real value has increased substantially since 2019. Second, borrowing is growing much faster than those assets, which is slowing the increase in net financial wealth. Third, deposits continue to account for a large share of household portfolios even as insurance, pensions and market-linked investments expand.

 

Allianz’s India analysis therefore puts greater emphasis on the household balance sheet rather than gross savings alone. Ritu Arora, country head, India, Allianz Services, said the 2025 figures show that asset accumulation alone is not a complete measure of household financial progress and highlighted diversification, risk protection and long-term wealth creation.

 

The broader global report also expects financial assets to grow by around 9 per cent in 2026, although it warns that future gains will depend increasingly on market performance, corporate earnings and the uncertain impact of artificial intelligence. Over the medium term, Allianz expects global financial-asset growth to settle at around 5-6 per cent a year.