Tuesday 26 September 2017

'Low confidence' sees savings near €100bn

Cash in Irish bank accounts increased by €1bn in June to stand at €99.5bn. Photo: Brian Lawless/PA Wire
Cash in Irish bank accounts increased by €1bn in June to stand at €99.5bn. Photo: Brian Lawless/PA Wire
Charlie Weston

Charlie Weston

Consumers are continuing to put money aside for emergencies despite the economy growing strongly.

Households stuffed another €1bn into savings accounts in banks, to take the total for June close to €100bn.

The last time households had €100bn in banks was seven years ago, in January 2010.

The current surge in savings is despite the interest paid on savings being at a record low.

Cash in Irish bank accounts increased by €1bn in June to stand at €99.5bn.

This reversed a move in May where householders pulled €657m out of the banks.

Householders are net funders of the banks, as banks now hold €8bn more in deposits than they have loaned out.

The continuing surge in savings reflects the fact that households lack confidence despite a rise in disposable income, according to David Kerr, of price comparison site Bonkers.ie.

"The amount of money in deposit accounts in banks has been creeping up year after year. It reflects the fact that people still have cash available but confidence is still low.

"This points to an increase in disposable income but people have no confidence because they still want access to their money at short notice."

People do not have confidence to lock away their money for 12 months, which would ensure they get a better interest rate on their savings.

Personal finance expert Frank Conway said consumers remain cautious when it comes to their money on the back of the worst recession in living memory.

Irish Independent

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