As part of a new monthly series, The Journal and Red C ask readers questions about their daily lives and the issues that really matter to them.
ONE YEAR INTO the pandemic, an overwhelming majority of Irish people say they are saving more and spending less, according to the results of a new poll by Red C.
Some 68% of the 1,000 people surveyed by the research and insights company on behalf of The Journal in March say they have been able to squirrel away their cash rather than spending it.
Meanwhile, 22% of people say they have lost income as a result of the pandemic. That compares with 65% who say that their income has remained the same and just 13% who say their lot has improved over the past year.
The savings figures chime with recent Central Bank of Ireland statistics that revealed that in the 12 months to the end of January 2021, Irish household deposits had grown by 13.5% to a record €126.5 billion. With limited opportunities to spend their money, households have deposited an extra €15.1 billion over the past year and €1.9 billion in January alone.
Economists expect the unwinding of these built-up savings to contribute to a consumer boom towards the end of 2021 and into 2022, which could be a key factor in Ireland’s economic recovery.
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Asked if the length of the current lockdown period could impede a big uptick in spending in the second half of the year, Professor Kieran McQuinn said, “The longer we are in lockdown then the more adversely affected the recovery will be this year.
“It also means that scarring effects particularly for SMEs are likely to be greater and this would further impede their recovery. I think the big issue, however, is how successful the vaccinations are in restricting the impact of the virus. If the virus is well and truly suppressed by the vaccination then I think we can expect a strong recovery in the latter half of 2021 and into 2022.”
Part-time workers
Bucking the overall trend of the survey, people with dependant children say they are actually spending more than they were at the start of the pandemic and saving less money as a result.
With school-aged children being stuck at home for large chunks of time over the 12 months, the cost of running a household has increased. Over half of parents surveyed said their outgoings have increased and nearly 30% say they have lost income in the past year.
But while 65% of respondents say their income has remained static over the past year, the cohort most likely to say they have lost money as a result of the pandemic is part-time workers.
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Some 31% said their lot has disimproved over the past year, compared to just 22% of respondents overall.
The ESRI noted last year that sectors of the economy that rely heavily on part-time, low-paid workers like hospitality and food services were the most-impacted by pandemic-related public health measures since March 2020. Workers in these sectors have been among the most likely to rely on government emergency supports such as the Pandemic Unemployment Payment and the wage subsidy schemes.
House price inflation
Meanwhile, a relatively high number of 18-34-year-olds (66%) say they have curtailed their spending habits and saved money since the start of the pandemic.
It compares with just 51% of 35-54-year-olds and 70% of those aged 55 and above.
Some 22% of survey respondents in the 18-34 age cohort said their income has actually increased in the past 12 months, compared to just 10% of 35-54-year-olds and 8% of those aged 55 and above.
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“This is quite interesting as one of the key questions for the recovery is whether those that are now saving are more inclined to spend that money on goods and services or on housing,” said McQuinn.
“If a relatively large share of the 18-34 age category is saving, it means that some of that money may go towards the property market which may in turn lead to a pick-up in house price inflation.”
Despite the pandemic, house prices grew 2.2% across the country last year, according to the Residential Property Price Index published by the Central Statistics Office in February.
Red C interviewed a random sample of 1000+ adults online between 4 and 10 March 2021. Interviews were conducted across the country and the results weighted to the profile of all adults. Panellists were chosen at random to complete the poll, with quotas set and weights allocated on age, gender, class, region, education level and working status to ensure a nationally representative sample.
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