The Nationwide UK (Ireland) Savings Index, which measures overall consumer sentiment towards saving, rose in September, led by a surge in the number of people who felt it was a good time to save as the budget approaches and uncertainty continues over the UK’s Brexit decision.
The main index rose to 125 points in September from 122 in August, the highest reading since March.
The overall rise in savings sentiment was driven by the surge in the Savings Environment sub-index. Within this category, the under-50 age group were largely responsible for the upturn. A record level of under-50s said it was a good time to save in September, posting a reading of 175.6, a jump of 26 points from the previous month. The level of under-50s who believe government policy encourages spending stood at 120.4 points in September, which is almost double the July reading of 69.2 points.
There was also an increase in the level of over-50s who said it was a good time to save in September and that government policy encouraged saving.
However, there was a drop in the level of under-50s who felt good about the amount they can save. In September there was a rise in the number of that age group who said they were able to save a little less than they should. Those aged over-50 were also more negative in relation to how much they can save.
Commenting on the survey’s findings, Brendan Synnott, Managing Director of Nationwide UK (Ireland), said:
“Again we are seeing a rise in the number of people in Ireland who feel it is a good time to save. This is a reaction not only to the ongoing uncertainty around Brexit, but about what the upcoming budget will mean for household finances.
“So far the government has signaled that there will be no significant financial improvements for households in October’s budget, which isn’t what most will want to hear after a long period of austerity and cuts to income in real terms.
It will be interesting to see how the measures contained in next week’s budget impact on the survey and people’s perceptions in the next survey.”
The share of respondents who said they would use any surplus money to pay off debts, including their mortgage, increased in September to 40.7 per cent from 38.5 per cent the previous month. Some 11.2 per cent of respondents indicated they would spend the surplus money, down from 12.4 per cent in August, while 7.5 per cent said they would invest it. The proportion of respondents who said they would save surplus money, over and above their everyday needs, increased in September to 40.6 per cent in September from 37.2 per cent in August.
Savings Index data
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