More and more Irish people are putting money away into savings accounts with the number of people saving regularly during January rising to 48 per cent, up eight per cent on December. This also represents an eight point increase on the figures for January 2011, according to the latest Nationwide UK (Ireland ) / ESRI Savings Index and is the highest level recorded since the index began collating data in January 2010.
The percentage of people not saving at all fell two points to 31 per cent in January, but this is six points higher than the level recorded in January 2011 (25 per cent ).
According to Central Bank figures, Irish households have €91.3bn in savings in banks at the moment, and the payout of tax-free lump sum public sector pensions to almost 8,000 retirement staff is expected to add an additional €630 million to this.
According to the ESRI report, savers have a more optimistic outlook towards the saving environment with 34 per cent believing that now is a good time to save compared with just 27 per cent in December and 28 per cent in January 2011. The percentage of people who believe that now is not a good time to save fell seven points to 41 per cent in January 2012.
The percentage of people who think that government policy discourages saving remains high at 55 per cent, the same level as recorded in January 2011.
Commenting on the index, Brendan Synnott, managing director of Nationwide UK (Ireland ) said, “Overall the data is showing that the savings culture in Ireland remains strong and is growing. However there has also been an increase since this time last year in the percentage of people not saving at all which now stands at 31 per cent. This is a cause for concern if it reflects an inability to save amongst a large proportion of people.
“Although there appears to be a greater degree of optimism among consumers about their ability to save, the proportion of people who believe that government policy discourages saving remains high and at the same level as January 2011.”
When asked their preference as to how they might allocate any money over and above their everyday needs 53 per cent of consumers would use the surplus to pay off debts, including their mortgage, 35 per cent would save the money, nine per cent said they would spend it while three per cent said they would invest it in either a pension or in shares.
When asked what they were saving for, the largest proportion indicated they were saving with a ‘precautionary motive’ with 35 per cent defining them as ‘unexpected expenses’. A further 14 per cent claimed they are saving for education/training, 12 per cent said they were saving for a holiday, 12 per cent are saving in case their income falls, and 11 per cent are saving for a large consumer purchase.
Of those consumers who are able to save occasionally or regularly, 23 per cent save between €26 and €50 a month; a further 23 per cent indicate they are saving between €51 and €100 per month, and 22 per cent are saving between €101 and €200 per month.
