GfK market research group said on Tuesday its forward-looking consumer sentiment indicator, based on a survey of around 2,000 Germans, rose to 6.2 going into May, up from a revised 6.0 in April.

That beat even the highest forecast in a Reuters poll of 26 economists, in which the median was for 5.9, unchanged from the originally reported figure for April.

GfK said the rise was prompted by income expectations and the willingness to buy components edging up from an already "very good level".

"Another factor behind the upward trend in the consumer climate is the low propensity to save in Germany, which dropped to a historical low in April," GfK's Rolf Buerkl. "The mandatory levy in Cyprus has therefore also shattered the trust of German savers in the safety of their deposits."

GfK does not provide an individual reading for the propensity to save component.

Policymakers agreed a 10 billion euro (8 billion pounds) aid package for Cyprus last month, and depositors over 100,000 euros of some Cyprus banks will contribute additional funds, raising fears of similar action in future among savers in other countries.

Despite seeing no risk to their own economic situation, German consumers turned more pessimistic about the overall economic outlook for the first time after three months of improvements.

"The news that the euro zone will remain in recession again this year is clearly curbing economic optimism in Germany as well," Buerkl said.

"Increasingly, consumers seem to be under the impression that the moderate recovery forecast for the German economy this year will tend to be rather sluggish, if it materialises at all."

The euro zone is facing a difficult road out of recession and has seen a souring of the mood among companies and consumers since March, with morale in the 17-country bloc slipping 1.5 percentage points in March.

Some pessimism has set in even in Germany, which has performed better than others during the crisis.

German DIY retailer Praktiker said earlier this month it expected the coming months to make up for the downturn experienced due to harsh winter weather.

(Reporting by Annika Breidthardt; editing by Ron Askew)

By Annika Breidthardt