The Nationwide UK (Ireland) Savings Index, which measures overall consumer sentiment towards saving, fell in October as the Budget disappointed and concerns over Brexit remain. The index fell by ten points to 115, its biggest monthly drop since June.
The fall in sentiment was led by a drop in the Savings Environment Index, which asks people whether now is a good time to save and whether government policies encourage saving. The index fell by 29 points to 98 point in October, its biggest monthly fall since October 2011, during the depth of the recession.
The level of people who said government policies encouraged saving plunged by more than a quarter, to 72.4 points in October from 106.4 points the previous month. The fall in the level of people who believed government policy encourage them to save was evident in both the under-50s and over 50s age group.
The level of people who felt it was a good time to save dropped by 23.1 points in October from the previous month, the biggest monthly decrease in three years.
The Savings Attitude Index, which asks people how they feel about their ability to save, rose in October to 131 points, up 8 points from the previous month.
This increase was largely driven by an increase in how consumers assess the amount they can save. There was an increase of 6.7 points in the level people who felt they could save about what they should and a rise in the level of people who said they were saving more than they should.
Commenting on the survey’s findings, Brendan Synnott, Managing Director of Nationwide UK (Ireland), said:
“The report points toward consumers and savers being disappointed in the Budget. While there were some positive measures, they were modest. The gradual reduction in the DIRT rate over the next four years is a missed opportunity for the Government to give savers a meaningful incentive.”
The share of respondents who said they would use any surplus money to pay off debts, including their mortgage, stood at 42.6% in October. Some 36.4% of people said they intended to increase their savings in the October survey, up marginally from the previous month.
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