Consumers increasingly wary of saving in current climate

Irish consumers are more reluctant to save than at any time in the past 17 months due to dissatisfaction with Government policies and concern over the impact of the Brexit result, according to a new survey.

The Nationwide UK (Ireland) Savings Index, which measures consumer sentiment towards saving, increased to 114 points from 103 points last month. However, the savings environment subindex, which asks people if they feel it is a good time to save, fell to 95 points, the lowest level since February 2015.

The subindex has lost close to 30 percentage points this year, having fallen for five consecutive months on the back of dissatisfaction with official policies on spending.

Among those aged under 50, there was a drop of more than 30 per cent in support for policies on saving.

Significant decline

"It is clear that people don't feel official government policies are doing enough to stimulate and encourage savings behaviour. Since the general election was held in February we've seen significant decline in support for government policy among both the under-50s and over-50s age groups," said Brendan Synnott, managing director of Nationwide UK (Ireland).

The savings attitude subindex, which asks respondents about their saving behaviour and how they feel about the amount they can save, rose to 134 points last month as against 103 points in June.

The share of survey respondents who said they would use any surplus money they gained to pay off debts rose in July to 46.6 per cent from 40.9 per cent the previous month. Some 10.6 per cent of respondents indicated they would spend the surplus money, down from 12.1 per cent in June, while 9.3 per cent said they would invest it.

The proportion of respondents who said they would save surplus money, over and above their everyday needs, fell in July to 33.5 per cent from to 37.2 per cent in June.