The ESRI/Nationwide UK (Ireland) Savings index, which measures overall consumer sentiment towards saving, rose to its highest level in March since the index began in 2010, driven by a surge in the number of people who feel positively about the amount they are able to save.
However, after consecutive increases in recent months, the Savings Environment Index fell this month. The drop in the Environment Index, which asks consumers if they believe government policy encourages saving, may be due to concerns as the political parties continue negotiations over the formation of the next government.
The main index rose to 131 in March from 122 in February – its highest level since the index began in 2010, boosted by a surge in the number of people who said they feel more positive about the amount they could save.
The increase in the Savings Attitude sub-index is largely driven by a surge in those who feel more positive about the amount they could save. The increase is particularly noticeable amongst the under 50s, with a 65 per cent increase in that demographic saying they feel better about their ability to save. The level of people who said they save regularly rose to 42.3 percent from 41 percent the prior month
The fall in the Savings Environment sub-index is largely driven by a drop in those under 50 who believe government policy encourages saving. The level of those under 50 who said government policies encourages savings fell to 122.8 in March, from 160.5 the previous month.
In terms of consumers’ intentions for any surplus money, 40.1 percent said they would use any surplus cash to pay off debts, including their mortgage. That compares with 41.4 further per cent in February. A further 15 per cent said they would spend any surplus money, up from 12.4 per cent who said the same thing in February. Some 10.8 percent said they would invest it.
Commenting on the findings, Brendan Synnott, Managing Director of Nationwide UK (Ireland) said:
“We have seen two key trends in the index in March. The first is the substantial increase in the number of savers who feel positive about the amount they can save. In recent months this figure has been somewhat depressed. One likely reason for the increase is that as we move into the second quarter, savers now have more visibility of their finances. Consumers have started to pay down Christmas debts and we have also seen a fall in unemployment.
“Another interesting aspect of this month’s survey is the drop in those who say government policy encourages saving. Since December we have seen a steady and significant increase in those who think policy is encouraging saving. However, more than a month after the general election was held and with no government yet in place, it is perhaps not too surprising that there has been a dip in those saying official policy is encouraging saving.’’
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