Trend not to spend as confidence dips
Published 15/09/2010 | 05:00
MORE people are saving any spare cash they have as confidence in the economy continues to decline, according to the latest savings index.
The Nationwide UK (Ireland) Savings Index for August continues to be driven by a marked rise in the number of people who think that now is a good time to save.
The ongoing economic uncertainty is also prompting those who have money to stick it into a savings account, the research shows.
One in four people think now is a good time to save, with a fall in the numbers who feel it is a bad time to save.
But only 11pc of people think that government policy encourages saving, while the number of people who believe government policy discourages saving increased 6pc to 55pc in August.
The number of people who stated that they would spend surplus money to pay off debts, including mortgages remained high at 53pc, while 30pc of people said they would save any surplus cash.
Just 13pc of people said they would spend the money if they had spare cash.
Managing director of Nationwide UK (Ireland) Brendan Synnott said precautionary savings was on the rise.
"The continued upward trend in the index suggests that people are becoming more uncertain about the economic environment and, as a result, are adopting the precautionary savings approach observed during 2009 and early 2010.
"There is now increasing evidence that some of the consumer optimism that was evident in the spring has given way to a more conservative approach," he said.