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SAVINGS FELL TO a record low in December as increased negative sentiment towards the economic environment discouraged saving. The results of the latest Nationwide UK (Ireland)/ ESRI Savings Index show a drop from 98 to 81 last month, the lowest ever level since the index’s inception in April 2010.
The decline in the index is predominantly driven by a 28 point decline in the Savings Environment sub-index which fell from 99 in November to 71 in December. The Savings Environment sub-index measures whether people think that the current period is a good time to save and if they believe government policy is encouraging saving.
Some 60 per cent of people say that government policy discourages saving, up 3 per cent on the previous month with just 7 per cent believing that government policy encourages saving. The index shows that 48 per cent of people are not saving at all with 65 per cent of people saying they are saving less than they should while only 13 per cent are saving more than they should. The one key positive from this month’s Savings Index data is a 2 percentage point increase in the number of people who are saving regularly to 30 per cent.
Commenting on the index, Brendan Synnott, Managing Director of Nationwide UK (Ireland) said, “Clearly the environment for savers has become more negative. During 2012 people have found it increasingly difficult to save while at the same time, deposit interest rates have fallen thereby reducing their return for saving.”
Despite these difficulties, almost 40 per cent of people continue to express a preference to save any spare cash available and this saving is driven by precautionary motives according to Synnott. 45 per cent are saving for unexpected expenses and an additional 7 per cent are saving to offset a fall in income.
Another factor in the drop in savings is the possibility that people have less money.
That’s 48% that won’t vote fg ever again.
I was most worried that around 40% of the present government voted with the motion of no confidence in them,by the time fg serve their term they will be the most hated and won’t see a strong hold in power for another 20years untill the next recession
MVM, that’s what we said about Fianna Fail. And we still have reason to hate Fianna Fail more, but they’re surging in the polls.
MVM.
Fianna Fáil have the worst economic record in Europe, massively corrupt and dishonest as a party. Always party and self before country. A cancer in our society in every way. Nothing good in them and yet …
They are still rising in the polls. There is a large segment of the electorate that has battered wife syndrome and the more they are dumped on, the more they will love someone for it.
@Richard,and fg are not corrupt wake up will you
I’ve never voted FG, never will. Indeed I’m politically opposite to them. I have no doubt that they are corrupt and that they look after the big man only. I also know that FF are many multiples more corrupt than they are. They are among the most corrupt parties in any democracy that I’m aware of.
Less money being saved?
What do you expect when the government are siphoning off billions to pay for the crimes of common criminals?
@ michael Hayes if the money is been spent on basic living then the economy is stagnant it can’t improve and with the extra charges coming on stream it will regress
Is it true that USC will apply to interest from savings next year? DIRT is already 33% from this year. Enough already!!
Thought it was PRSI that was to be applied.If i’m right would a rate of 37.5% on the interest earned make you want to withdraw the principle and squander it on shopping?Can’t see people with savings being that stupid.
That’s true Reg, USC will apply to all “unearned” income
I remember FG & Labour in government in the 80′s we got screwed then & the people haven’t learned!!! We are NOT saving because we have NOT got anything to save at end of pay day :-( & are barely making ends meet! Didn’t vote for either party this time either, & won’t in the future either!
Just like now, in the ’80s FG and Labour took over a bankrupt country after Fianna Fail. Fianna Fail voter by any chance?
Reg you might want to go back and have a look at FG’s economic record in the 80′s.They were every bit as incomptent as FF and still are.They just had fewer chances than FF at destroying the country.
Ah Norman, you’re making assumptions about thinks I never said. You disappoint me. I was simply stating that Labour and FG came into government after Fianna Fail bankrupted the country. I didn’t comment about how good or bad they were at cleaning up the mess.
Reg you implied Breda’s opinion is less valid because she stated she didn’t vote for this government.Yes your correct i don’t know what you think nor did i try to suggest as to what you thought either.
No I didn’t suggest that her opinion is any less valid. He vote counts the same as mine at the end of the day. I was simply reminding her the reasons why we are getting “screwed” as she put it. She suggests that people haven’t learned. She certainly right there, but I am not sure that she knows that she is!
The reasons fg are such a sh1t party are
A.they are liars which noone can deny
B.they have no business sence and roll over easy to the eu.
Ff would have struck a better deal and if they couldn’t they wouldn’t be going around telling everyone they are getting a better deal when the eu specifically said NO
All this “which party is more economically illiterate” is pointless! I think it’s quiet clear to see that in general the ability of Irish politicians is so low that no party is capable of running an economy.
The falloff in savings is a direct result of the interest rate policy of the ECB. Current interest rates net of DIRT are less than the real rate of inflation. So why would you save money and watch it lose it’s value?
Just thinking of the SSIAs from a few years back and the cars, holidays and house extensions they funded makes you chuckle now…
How the Hell can you save . The government . Are slowly killing the economy . People can’t. Buy food. Never mind save
We need to get real and realize this is good. If 48% of people are putting all of their income into the economy, demand levels are being maintained if not increased. Basically, we’ll spend our way out of the recession.
Do you think maybe 48% are spending all their money because they can’t afford to save?
oh dear :(
You missed the point completely there Michael. People have no money to save, its not that people are choosing to spend all their income..
Michael it is not good news that 48% of people are spending all their monthly income and have nothing left to save. What it means is that 48% of the population as of this moment are terrified that some big unexpected bill is going to appear because they don’t have the money to pay for it.
Not spending what I don’t have to turn economy around..
Another one of those statistics that will go whistling over the government’s head.
I’ve been spending my savings as well as my income……
have your say