DUBLIN – Consumers in Ireland have reduced their spending and increased their savings were the findings of a report released today.
The Nationwide UK (Ireland) / ESRI (Economic and Social Research Institute) Savings Index stated that savings have increased by 23 points in January to bring the Index to 114, the highest level since October last year and six points higher than January 2011.
It is unclear whether the new saving takeup is due to new year resolutions or worries related to austerity; either way, in January 2012 the number of people saving regularly rose by almost 50 per cent.
The percentage of people not saving at all also fell (31 per cent) in January.
According to Nationwide, 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 28 per cent in January 2011. However, the number of people who believe that government policy is activly discouraging saving remains high at 55 per cent. This could be due to the increase in DIRT(Deposit Interest Retention Tax) on savings.
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 as demonstrated by the 23 point increase in the overall index since last month and 6 point increase versus January 2011.
“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,” said Mr Synnott.
As part of the survey consumers were asked what they were saving for. The largest proportion indicates that they are saving with a precautionary motive with 35 per cent of responses indicating saving for unexpected expenses. 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.