Monday 23 October 2017

Low savings blamed on high taxes

Charlie Weston Personal Finance Editor

HIGHER tax on savings and the upcoming property tax have been blamed for discouraging people from putting money aside.

A survey commissioned by Nationwide UK (Ireland) shows six out of 10 people now believe government policies are a disincentive to savers.

Deposit interest retention tax (DIRT) went up from 30pc to 33pc on any interest earned on savings from the first day of this year.

Nationwide UK (Ireland) managing director Brendan Synnott said: "Since December there has been a marked increase in negative sentiment towards government policy on saving, and this is the main reason for the overall index trending downwards.

"The increase in deposit interest retention tax to 33pc, combined with the pending household and water charges, are clear reasons for these results."

Mr Synnott said that over the coming months we will find out whether this increased negative sentiment is temporary or becoming the new base level of opinion for policy on saving.

The research found an increase in the percentage of people who would spend surplus cash – 12pc said they would part with it, the highest level recorded since April 2011.

However, the majority continue to say they would use surplus cash to pay off debts including their mortgage.

According to the latest index data, more than a quarter of people are saving regularly, which is down slightly from January.

There has been a slight increase – up to 29pc – in the number of people who "occasionally" put money aside. Those not saving at all fell slightly last month to 45pc.

Irish Independent

Also in Business