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Wednesday 17 September 2014

Households say government policy discourages saving

Sarah Stack

Published 11/08/2014 | 11:53

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Forecastera are predicting growth in the Irish economy
More households saving as sentiment rises

More than six out of ten people believe government policy discourages saving, a survey has found.

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While figures show more households are starting to save regularly again, only a quarter think it’s a good time to put money away.

The Nationwide UK (Ireland)/ESRI savings index found the proportion of people putting money away regularly rose to 41pc last month, up from 35pc.

“The increase in the index this month reflects the improvement in the overall economy,” said Brendan Synnott, managing director of Nationwide UK (Ireland).

“It appears that people have absorbed the impact of the property tax introduced in 2012 and are now rebuilding their personal finances.

“In normal circumstances approximately four out of 10 people will save regularly. This level had fallen to three out of 10 during 2013 with many people simply being unable to save as they would like to.”

The index shows that since January the level of regular saving has gradually improved with figures from July representing a return to the normal and a reversal of a decline which started in autumn 2012.

A sixth said they are happy with the amount they are saving, but more than half still think they should save more.

However only a quarter believe it is a good time to save, down from 26pc last month and 32pc a year ago.

Elsewhere the proportion of people who say that government policy discourages saving increased to 66pc in July, from 65pc last month and 57pc a year ago.

Sentiment towards also rose by seven points last month, the index found.

“This month’s data suggests that personal finances are improving with regular saving increased to normal levels,” Mr Synnott added.

“A further positive dynamic is the change in preferred use for spare funds. Preference to pay down debt is declining while more people say they would spend, which may well translate to an increase in retail sales.”

Four out of ten people would use surplus cash to pay off debts, with 38pc willing to save it and 14pc said they would spend it, up 13pc from June.

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