Permanent TSB says savers have risen 162pc since 2008
UNCERTAINTY about the prospects for the economy and job insecurity have prompted a surge in the numbers of people saving every month, Permanent TSB said yesterday.
The bank said it has seen a 162pc rise in the numbers of regular savers it has since 2008.
Regular or monthly savers tend to be under 35 and generally do not own their own homes.
Almost 53,000 people are stashing away money with the bank every month, up from just 20,000 in 2008 before the recession began to bite hard. The average amount being saved is now €250 a month.
Those people who opened new accounts last year were saving an average of €200 a month, but accounts opened this year have an average of €360 going into them every month. Half of those with a regular savings account are under the age of 35, while three-quarters of them do not own their own home.
Head of business strategy with Permanent TSB Niall O'Grady said many of these were likely to be saving for a deposit for a house.
It is thought that thousands of people under the age of 35 are saving hard for a deposit but will only buy once they are confident that house prices have stopped falling.
The bank, which also produces a house price index in conjunction with the Economic and Social Research Institute, said it expected property prices to have fallen by 36pc from the peak in 2007 by the time the next index is published at the end of April.
But further falls are expected after that to take prices down by 40pc from their peak, Permanent TSB chief executive David Guinane said.
Across all the banks and deposit takers in the market there are some 2.25 million retail savings accounts with a total of €104bn on deposit.
Half of these are regular savings accounts, while more than a third are lump sum or fixed-rate accounts.
Three institutions pay 4pc a year on regular savings accounts -- Permanent TSB, Bank of Ireland and EBS Building Society. Up to €1,000 a month can be put into these accounts.
Mr O'Grady said those with a lump sum to put on deposit with Permanent TSB tended to be older.
The average amount put on deposit in a fixed-rate, or long-term, account with Permanent TSB is €60,000, the bank said.
Those who choose to put their money into a fixed-term account are now more inclined to put the money away for a longer period than they were in the past two years. Permanent TSB, which is giving away 50,000 free copies of a guide to saving, said it had almost 10pc of the overall savings market with €10bn in deposits.
It denied it was planning to cut any of its rates. Deposit rates have come down across the market since 2008.
Banks, including Permanent TSB and AIB, have claimed that deposit rates were too high in the market compared with the rates for mortgages.
Mr Guinane said Permanent TSB's domestic competitors that were putting loans into the National Asset Management Agency (NAMA) might ease off on the rates they paid on deposits once they received bonds from NAMA.