Number of people saving regularly increases in March

Irish consumers are putting more money away for a rainy day with many believing that now is a good time to save, a new survey shows.

According to the latest Nationwide UK (Ireland)/ ESRI Savings Index, the proportion of people saving regularly rose to 40 per cent last month, up 5 per cent from February. The share of those dissatisfied with the amount they save also increased, rising from 55 per cent to 57.5 per cent.

The index, which measures overall sentiment towards saving, increased to 117 in March from 105 a month earlier. The three-month moving average rose from 108 in February to 111 this month.

The rise in sentiment was largely due to a jump in the Savings Environment index, one of two sub-indices that make-up the Savings Index. This index, which asks if people believe that now is a good time to save, rose to 105 in March, from 89 in February.

Meanwhile, the Savings Attitude index, which asks people about their saving behaviour and how they feel about the amount they save, rose from 120 to 129, with the three-month moving averge up marginally from 122 to 123 in March.

"This month the index has followed the underlying trend observed throughout 2014 with more people saving regularly, but there is evidence of some discontent with the amount being saved," said Brendan Synnott, managing director of Nationwide UK (Ireland).

“There are also improvements in economic indicators with increases in household net worth, overall economic growth, increased numbers in employment, and a reduction in numbers unemployed. This means that more people will have disposable income available and so will be in a position to choose between spending and saving,” he added.

According to the latest index, 33 per cent respondents believe now is a good time to save, the highest level recorded since May 2014.

The number of respondents who felt that now is a bad time to put money aside also rose however, climbing from 33 per cent to 35 per cent this month. The proportion who believe government policy encourages saving increased substantially to 9.2 per cent in March, from 5.4 per cent in February.

The index also shows that the share of respondents who said they would use any surplus funds to pay off debts, including their mortgage, remained steady at 40 per cent in March. A further 10 per cent said they would spend any additional money, while 9 per cent said they would invest it.