More of us are saving money than was the case a year ago but many of us are still using any surplus cash to pay down debt, according to the latest Nationwide UK Ireland Savings index.
The monthly measure of attitudes towards savings shows 37% of Irish consumers now describe themselves as regular savers, up 5 points compared to October. The survey also shows that the proportion of people not saving is down from 41% to 33% over the past year. The index shows the substantial pressure on any disposable income that many are still feeling, however, with 44% saying they would use any surplus cash to pay down debt (up from 43% last year) and just 11% saying they would spend it, down from 13%.
Brendan Synnott, managing director of Nationwide UK (Ireland), says that 2014 was a very good year for the savings community. The year saw positive trends - along with the odd blip - and optimism is strong for the future months. Mr Synnott says that the uncertainty about the water charges and the pending income tax reductions, which become effective from January, has eased.
On the Central Bank proposal which would see potential mortgagees having to come up with 20% of the value of a property to put down as a deposit, Mr Synnott said the 20% deposit was a very big ask, especially for first time buyers. He says that while the excesses that lead to the property boom and boost just be avoided, he believes a cap on income is a much better way to manage the situation.
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MORNING BRIEFS - Tesco has issued yet another profit warning, its fourth of 2014. The supermarket chain said actions it is taking to revamp its offer and win back lost market share, including hiring new staff, will impact its full year profit. Analysts were expecting Tesco to post a full year profit of £1.9 billion but, the company said today that its profit will not now exceed £1.4 billion.
*** Changing consumer tastes are hurting fast-food chain McDonalds in the US. Overnight results show McDonalds suffered a 4.6% drop in same-store sales during November. That is a metric which excludes the impact of new outlets opening during the year and is closely watched by analysts and investors. In addition McDonalds sales fell by 2% in Europe and were down 4% in Asia-Pacific and the Middle East. McDonalds plans to change menus and roll out innovations such as customisable burgers to more shops to win back consumers who are either drifting to competing chains with a different offering or shunning fast food altogether on health grounds.
*** The special liquidators of IBRC, what remains of the former Anglo Irish Bank, have said that various claims from state entities rank ahead of any claims from junior bondholders in the event of any dividend being paid out of the liquidation. In a statement, the special liquidators said it will be some time before it is clear whether any money will be available. Creditors have until May of next year to make claims. The liquidators are adjudicating on claims received to date including €1.2 billion worth from state entities which would include, for instance, fees due on foot of the government guarantee. "This claim ranks ahead of any creditor claims made by holders of subordinated debts," the statement said.
