One of the barometers for consumer sentiment is the savings index and the latest index from Nationwide UK (Ireland) shows an increase in regular savings in December compared to the same time the previous year.

The Savings Index stood at 88 in December, unchanged from November but up from 81 in December 2012.

It showed that the proportion of people who save regularly now stands at 34% compared to 30% a year ago. At the same time the number of people who are not saving at all fell to 40% in December compared to 48% the same time the previous year.

The proportion of people who believe that now is a good time to save is 24%, just above the record low of 23% seen in November. 64% of people feel that current Government policy discourages savings, while just 8% of people believe that it encourages saving.

It also reveals that 48% of people would use any spare funds to pay down debt, down slightly from 49% in December 2012. 10% of people surveyed expressed a preference to spend any spare cash, up from 6% in December the previous year.

The managing director of Nationwide UK (Ireland), Brendan Synnott, said that the conditions for saving remain difficult due to falling interest rates and increased rates of tax on interest earned, which were introduced in the October Budget.

"Looking ahead, 2014 will be an interesting year as increased consumer confidence and preference to spend may well play a bigger role in overall saving behaviour," he added.