Savings Index declines by 5 points as 64% of people save less than they think they should
Nationwide UK (Ireland)/ESRI Savings Index June 2010
The Nationwide UK (Ireland) Savings Index for June 2010 declined by five points and reveals that 64% of people are saving less than they think they should. There was also an increase in the number of people who believe that it is a bad time to save.
In June, 47% of people stated that it was a bad time to save in the current economic climate compared to 41% in March when the Savings Index was launched. During the same period, there has also been a 10% decline in the number of people who believe the current economic conditions mean it is a good time to save. In June, only 24% of people felt the economic conditions meant it was a good time to save.
These environmental factors are key drivers behind a five point decline in the Savings Index for the month of June.
Attitudes towards savings in general remain strong with almost 65% of people believing that it is personally important to save. In June, there was a 7% increase in the number of people who were saving regularly (45%) and there has been a decrease in the negativity towards government policy on saving from 55% in March to 47% in June.
Commenting on the Index, Brendan Synnott, Managing Director of Nationwide UK (Ireland) said, “Since March we have seen the gap widening between the importance of savings and the savings behaviour of individuals. In June, this is driven mainly by a decline in the ‘Savings Environment index’.
People are increasingly expressing the view that the current economic conditions mean that it is not a good time to save. This may reflect the current low interest rate environment for deposits but there has also been an increase in the percentage of people who say they are not saving as much as they should and this suggests that less disposable income is available for saving.
In broad terms, there remains a need for Irish consumers to increase savings in order to rebalance the economy. So far, the rise in savings has not benefited deposit accounts, as higher savings have mostly taken the form of debt repayment. The low interest rate environment has contributed to making debt repayment more attractive than accumulating deposits. However, over time deposits should benefit from the higher propensity to save that has resulted from the recession and we are already seeing signs of this in that the proportion of Irish consumers reporting that they save regularly has increased to 45% in June from 38% in May ”.
Key Highlights:
- Nationwide UK (Ireland) Savings Index declines by 5 points in June 2010
- 64% of consumers are negative about the amount they are able to save at present
- 47% of consumers do not consider it to be a good time to save given the current economic conditions
- The proportion of consumers reporting that they are regular savers has increased to 45% from 38% in May 2010
Summary Data:
| Jan-10 | 95 | 101 | 107 |
| Feb-10 | 101 | 100 | 94 |
| Mar-10 | 105 | 100 | 99 |
| Apr-10 | 93 | 99 | 99 |
| May-10 | 87 | 100 | 103 |
| June-10 | 82 | 101 | 93 |
The Nationwide UK (Ireland) Savings Index is produced 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.
You can access the full press release here.