Thursday 22 February 2018

Consumers let savings habit slip at Christmas

Shoppers on Henry Street. Photo: Mark Condren
Shoppers on Henry Street. Photo: Mark Condren
Charlie Weston

Charlie Weston

Consumers are feeling the most negative about their ability to save in more than a year.

Low interest rates and the spending at Christmas meant that many people, particularly younger age groups, switched off saving last month, according to the latest Nationwide UK (Ireland) savings index.

People also eased up on saving as they have to contend with rising living costs.

The savings index fell to 104 points last month from 116 in November. This was the lowest level the index has reached since November 2014.

The overall fall in sentiment is mainly due to the decrease in the number of people who feel positive about their ability to save and the amount they can put away. For those under the age of 50, the fall in the index was much sharper.

More people said they would use any surplus cash to pay off debt. The number of people who said they would spend surplus cash dropped to only 8pc from almost 13pc the previous month. One in 10 said they would invest it.

The proportion of people who said they would save extra money rose slightly to 35pc last month.

Nationwide UK (Ireland) managing director Brendan Synnott said consumers stopped saving last month as they spent money on the festive period instead.

"It's clear that consumers felt pressurised to spend in the Christmas period and this has had a negative impact on their ability to save surplus cash.

"This trend is particularly noticeable among the younger demographic, who seemingly felt the Christmas squeeze more than older respondents."

The negative view of households to savings comes despite consumer confidence hitting a 10-year high last month.

Irish Independent

Promoted Links

Promoted Links

Business Newsletter

Read the leading stories from the world of Business.

Also in Business