Monday 16 December 2019

Rise in number of those who think now is good time to save following USC cut

Picture posed
Picture posed

Charlie Weston, Personal Finance Editor

THERE has been a rise in the number of people who think now is a good time to save.

The Nationwide UK (Ireland) savings index shows those under the age of 50 feel Government policy is encouraging them to save, especially the reduction in the universal social charge (USC).

Younger people are also being encouraged to save by Central Bank rules on the sizes of deposits needed to secure a mortgage, according to Nationwide UK (Ireland) boss Brendan Synnott.

The main index rose to 122 points in January, from 104 points in December - its highest level since September, as the pressures of Christmas spending receded.

The overall increase in savings sentiment was driven by a rise in those who felt better about their ability to save and those who believe that government policy is creating a more positive savings environment.

 The proportion of people who feel now is a good time to save stood at 34pc in January, while the number of people who feel negative about the savings environment was 29.8pc.

In terms of consumers’ intentions for any surplus money, half said they would use extra cash to pay off debts including their mortgage. There was a rise in the numbers who said they would do this since December.

A further 13pc said they would spend the surplus money.

This rise in sentiment was particularly strong in the under-50 age group.

When asked whether they thought Government policy encouraged spending, 13.5pc of respondents in that age group said they did, compared to 8.5 percent the previous month.

 Mr Synnott said: “It seems as though savers are feeling more positive as some of the measures in last October’s budget take effect in 2016.

"For instance, the cut in the rate of the USC has now gone live and will have contributed to a feeling of a more positive environment for savings.”

He added that it was also clear that after some years of low interest rates, the majority of people still feel the savings environment  isn’t as positive as it could be.

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