The proportion of Irish consumers who felt that July was a good time to save fell to its lowest level in 17 months, as satisfaction with government policies on spending plunged and concerns over the impact of Brexit on the Irish economy persisted.
The Savings Environment index, which asks people if they feel it is a good time to save and whether government policies encourage saving, dipped to 95 points, its lowest level since February 2015. The Savings Environment index has lost nearly 30 percentage points this year, decreasing for five straight months.
Amongst under-50s the level of people who felt government policies encourage saving plunged by almost a third in July. The reading of those who felt the government was introducing policies to encourage saving fell to 66.2 in July from 99.7 points in June. Among that age group there has been a 57 per cent fall in satisfaction with government policies on saving since the general election was held in February.
Amongst the over-50s age group satisfaction with government measures on spending was largely unchanged this month. However, that still reflects a 43 per cent drop in satisfaction since February, when the measure stood at 102 points.
Overall the main Savings Index, which measures sentiment towards saving, rose to 114 points in July from 103 points in June, driven by a surge in those who felt good about the amount they could save. The Savings Attitude Index, which asks respondents about their saving behaviour and how they feel about the amount they can save, rose to 134 points last month from 103 points in June.
Commenting on the survey’s findings, Brendan Synnott, Managing Director of Nationwide UK (Ireland), said:
“It is clear that people don’t feel official government policies are doing enough to stimulate and encourage savings behaviour. Since the general election was held in February we’ve seen significant decline in support for government policy among both the under-50s and over-50s age groups.
“As we enter a period of government recess, it will be interesting to see what new policies emerge in September that will give support to savers and will encourage saving.
“On the other hand, it is positive to see a rise in the proportion of people who feel good about the amount they can save. This is partly due to consumers adapting to the ‘new normal’ of rising house prices and a more volatile macro-political climate and adjusting their spending and savings behavior accordingly. This chimes with what we know of Irish consumers, who have a strong track record of saving.”
The share of respondents that said they would use any surplus money to pay off debts, including their mortgage, rose in July to 46.6 per cent from 40.9 per cent the previous month. Some 10.6 per cent of respondents indicated they would spend the surplus money, down from 12.1 per cent in June, while 9.3 per cent said they would invest it. The proportion of respondents who said they would save surplus money, over and above their everyday needs, fell in July to 33.5 percent from to 37.2 per cent in June.
About the Savings Index
The Savings Index is constructed from monthly research on the attitudes of Irish consumers towards saving.
The Index measures peoples’ responses to questions on their attitudes and behaviour towards saving (The Savings Attitude Index) and conditions in the wider environment (Savings Environment Index).
The Nationwide UK (Ireland) Savings Index is produced monthly from a minimum sample of 800 consumers over 15 years of age. The ESRI carries out the Savings Index research to ensure the indices represent a national sample.
Note: Prior to January 2011 the Nationwide (UK) Ireland Savings Index was constructed using quarter one, 2010 as its base period. From January 2011, The Index has been rebased using the year 2010 as the base period. The method for calculating the savings attitudes sub-index has been altered to reduce short-term volatility as the impact of small changes in the number of responses was being overstated when the number of respondents in a category was low.
The ESRI works towards a national vision of ‘Informed policy for a better Ireland’. This means producing high-quality analysis to provide robust evidence for policymaking, with the goals of research excellence and policy impact.
The ESRI produces research that contributes to understanding economic and social change in the new international context and that informs public policymaking and civil society in Ireland.