Savings Index Maintains Momentum in January

The Nationwide UK (Ireland) / ESRI Savings Index, which measures overall sentiment towards saving in Ireland, increased in January to 111 from 107 in December. The January increase maintains the momentum from previous months and the three-month moving average rose from 102 in December to 107 in January.

The overall increase is driven by the Savings Environment sub-index, which asks if people believe that the current period is a good time to save and whether they think government policy encourages people to save.  In January, the Savings Environment Index jumped to 100 from 90 in December. This continues the trend in previous periods with the three-month moving average also rising from 84 in December to 90 in January.

The share of respondents who believe now is a good time to save increased moderately to 28 per cent in January from 26 per cent in December.  There has also been a decrease in the proportion of respondents who believe now is a bad time to save from 39.2 per cent in December to 37.1 per cent in January. While still low, the proportion of respondents who view government policy as encouraging of saving also increased to 10 per cent from 9 per cent in December.

Meanwhile, the Savings Attitude sub-index asks respondents about their saving behaviour and how they feel about the amount they save.  In January, the sub-index decreased to 121 from 125 in December. However, the three-month moving average rose to 124 in January from 120 in December. The proportion of those who save either regularly or occasionally rose to 65 per cent, from 61 per cent in December. The share of those dissatisfied with the amount they save rose to 59 per cent, from 54.3 per cent in December.

Consumers are also asked about their preference as to how they might allocate any money remaining once they have met their everyday needs. The share of respondents who report that they would use the surplus to pay off debts, including their mortgage, rose to 48 per cent from 41 per cent in December. A further 10 per cent said they would spend it while 7 per cent said they would invest it.