More people saving regularly - Nationwide index

Tuesday 12 August 2014 10.49
Concerns remain about whether it is a good time to save and whether Government policy encourages people to save
Concerns remain about whether it is a good time to save and whether Government policy encourages people to save

The proportion of people who say they are saving money regularly rose from 35% to 41% in July, according to the latest Nationwide UK (Ireland)/ESRI Savings Index.

The level of regular saver has gradually improved since January.

Nationwide said today's index shows a return to the normal long-term level of saving among consumers and a reversal of the decline which started in the Autumn of 2012.

But major concerns remain about whether it is a good time to save and whether Government policy encourages people to save. 

The proportion of people who think that it is a good time to save fell to 25% in July from 32% a year ago, while the amount of people of believe that Government policy actually discourages people to save rose to 66% from 57% a year ago. 

When asked about how they would allocate any additional cash over and above their everyday needs, 40% of Irish consumers said they would save it. This is down from 46% in June.

14% of consumers said they would spend the extra cash, up from 13% the previous month.

"The increase in the index this month reflects the improvement in the overall economy. It appears that people have absorbed the impact of the property tax introduced in 2012 and are now rebuilding their personal finances," commented 
Brendan Synnott, managing director of Nationwide UK (Ireland).

He said that in normal circumstances about four out of ten people will save regularly, but this level had fallen to three out of ten in 2013 with many people simply being unable to save as they would like to. 

"This month's data suggests that personal finances are improving with regular saving increased to normal levels. A further positive dynamic is the change in preferred use for spare funds. Preference to pay down debt is declining while more people say they would spend, which may well translate to an increase in retail sales," Mr Synnott added.