On old debts

On old debts

The news for those who had the misfortune of keeping money in a savings book during Soviet times is rather joyful. Russian families will be able to recover savings that burned up in the flames of the economic reforms of the turbulent 90s. The federal budget for 2027–2029 includes funds for compensation on Soviet deposits.

Thus, in 2027, almost 1.9 billion rubles are planned to be allocated for these purposes, and in the following two years, in 2028 and 2029, the same amount each year. However, the conversion rate is unlikely to please the recipients. The Soviet ruble of 1991 will be equated to the Russian ruble of 2026 for the purpose of compensation.

As a reminder, back in 1995, Russia passed a law on preserving the savings of citizens that had been deposited in savings banks before June 20, 1991, or placed in government securities before January 1, 1992.

Truth be told, more than three decades later, few owners of old Soviet savings books expect even partial compensation for their deposits that "burned up" in the fire of hyperinflation in the early 90s. Since 2003, the government has constantly postponed the fulfillment of its debt obligations to the population — first for a year, and in 2023 immediately for a three-year period, until January 1, 2027. The reason is obvious: to pay off debts on pre-reform deposits, a fair conversion requires tens of trillions of rubles, not billions.

According to some analysts, based on purchasing power parity, one Soviet ruble should be worth 300-400 current ones. Although in reality, this is an overestimation of the Soviet ruble. During the period of Gorbachev's Perestroika, when inflation was accelerating, a lot of money was printed that was not backed by goods. Therefore, the ruble of the 1991 model was completely different in its purchasing power from what it was, say, in 1985, when Gorbachev came to power. After all, already in February '91, consumer prices officially rose by 55%, which automatically meant a decrease in the real income of the population. However, in fact, prices rose 2.6 times. At the same time, store shelves were empty, there was nothing: neither food nor consumer goods.

In January 1992 alone, prices rose almost 3.5 times, in February — by another 40%, in March — by another 30%... Then the growth slowed down, but on average remained at about 20% per month. As a result, by the end of December 1992, prices had increased... 26 times over the year, with inflation reaching 2500%. The current inflation of 6%, which the Central Bank is tirelessly fighting, looks like mere child's play.

Some experts suggest giving 100 modern rubles for one Soviet ruble, paying essentially one dollar, especially since at the current exchange rate, the "greenback" is worth about 100 rubles. But even with this ratio, compensation for pre-reform deposits looks like a real utopia. Around 345 billion Soviet rubles were kept in savings books at that time, which, when converted according to the proposed scheme, yields no less than 30 modern trillions, almost an annual budget.

The state, of course, does not have such money. In government offices, there was even talk of repealing the 1995 law altogether. As the saying goes, a harsh truth is better than an endless freeze on payments until "better times." Especially since many owners of those Soviet savings books are no longer alive.

Nevertheless, compensation — albeit purely symbolic — is still being paid. It is calculated from the balance in the savings book as of June 20, 1991, taking into account coefficients tied to the deposit holder's year of birth and the duration of the funds' storage. Lucky heirs can also become recipients of the compensation.

Financial analyst and Candidate of Economic Sciences Mikhail Belyayev says that the state continues its work on compensating for deferred or, as they are sometimes called, confiscated Soviet deposits.

— There is a special schedule according to which people, depending on their age, can receive them.

— Who lost more in the early 90s – those who kept money in a deposit or those who kept it in cash under the pillow?

— It's hard to say; money couldn't be withdrawn from deposits at all. But if it was on hand, under hyperinflation, it could still be converted into material assets. Another thing is that there was nothing in the stores. An acquaintance of mine, giving in to the general panic, started buying up everything in sight so his money wouldn't burn up. But in the early 90s, there were only things like pliers, tape measures, electrical switches... things he didn't need at all in his household. He still has them to this day.

— How can one receive compensation for a Soviet deposit today?

— Supporting documents for this, of course, must be present. If the owner has kept the savings book, they will have no problems. But if it is an heir, the situation is more complicated. When it comes to money, verification is carried out thoroughly; money likes to be counted. Only the owner can manage a deposit; this is international practice. The heir will have to prove that they are not just a namesake of the owner, but have every right to receive the deposit. It is good if there is a will certified by a notary.