Tuesday 21 November 2017

Low interest rates and taxes putting consumers off saving

Sarah McCabe

Sarah McCabe

THE AMOUNT of people who think now is a good time to save is at the lowest levels since records began, according to an influential index.

The latest Nationwide/ESRI Savings Index found that just 23pc of respondents surveyed in November believed now is a good time to save, the lowest score recorded since the index started in January 2010.

A decline in sentiment was particularly prevalent among the over 50s age group, with just 19pc saying now was a good time to save compared with 31pc in October.

Consumer negativity towards government policy on saving also increased, rising to 66pc in November from 55pc in October.

Savers have taken a raft of hits in recent years. The government is set to raise the state tax on savings (Deposit Interest Retention Tax) even further from the start of the new year, to 41pc from 33pc, as part of Budget 2014.

And people putting money into a savings account in a bank are now getting interest rates that now average less than 1pc, recently-released figures from the Central Bank showed.

“Consumers are now responding negatively to government policy and the general savings environment” said Nationwide UK (Ireland) managing director Brendan Synnott.

“However their fundamental attitude to saving and preference to save any spare money available remains strong. These responses are most apparent amongst those aged over 50 who are more likely to have money to save and who are therefore more likely to be impacted by the increase in Deposit Interest Retention Tax (DIRT) from January 2014.”





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