Consumers Show First Signs of Increased Preference to Spend

Nationwide UK (Ireland)/ESRI Savings Index Declines in April

The Nationwide UK (Ireland)/ESRI Savings Index decreased by five points to 103 in April, reflecting continued concern among consumers about the current savings environment.

The proportion of consumers who think that now is a good time to save weakened to 28% in April from 31% last month, while those saving regularly also declined from 39% to 36%.

The April data shows significant changes in consumers’ intentions as to how they might allocate any money available to them over and above their everyday needs. While paying down debt remains the most preferred option at 42%, preference to spend has increased considerably from 6% in March to 16% in April, the highest level recorded since January 2010. Preference to spend is even higher amongst the over 50s age bracket with 18% of this group now prepared to spend any spare cash.

The latest data also examined motives for saving and the average amount saved per month. When asked about their reasons for saving, the largest proportion of respondents cited precautionary motives, with 42% indicating that they save for unexpected expenses. The second most popular reason for saving is for holidays at 14%. Of those consumers who are able to save occasionally or regularly, the largest proportion (34%) save between €51 and €100 euro a month.

Commenting on the Index, Brendan Synnott, managing director at Nationwide UK (Ireland) said, “While the Savings Index this month shows only a small decline, there are a number of findings in the data overall that may indicate the emergence of a more positive outlook amongst consumers.

“The perceived importance of saving has declined in each of the past two months while the preference to use any excess funds to pay down debt has declined to its lowest level since we started recording data in January 2010. April has also seen a significant increase in preference to spend. Taken together, these findings, albeit based on one month only, may indicate the first signs of a more positive consumer outlook and a return to a normal saving and spending pattern.”

Highlights:

  • Overall the Savings Index decreased by 5 points to 103 in April.
  • The decrease in the Index is driven by a decline in the Environmental sub-Index which decreased by 7 points to 117.
  • The percentage of people who think now is a good time to save declined to 28% in April from 31% last month.
  • The Savings Attitude sub-Index also declined by 2 points to 89 as the percentage of people saving regularly declined to 36% in April from 39% last month.
  • For those with excess money over and above their everyday needs, paying down debt is the most preferred option at 42%, but this is the lowest recorded score on this measure since the Index began in January 2010 and compares with a high of 59% in November 2010.
  • Preference to spend excess money has increased from 6% in March to 16% in April.
  • 14% of people expect to be able to save more in the future than at present and the trend in this measure is up from 9% in February.

 

 
Savings Index
Savings Attitude Index
Savings Environment Index
Importance of Savings Index
Jan-10 106 98 114 103
Feb-10 117 132 103 103
Mar-10 121 136 107 102
Apr-10 105 104 106 101
May-10 97 85 110 102
Jun-10 90 81 99 104
Jul-10 97 99 95 99
Aug-10 101 99 102 98
Sep-10 82 82 82 97
Oct-10 94 96 92 97
Nov-10 100 91 109 95
Dec-10 89 97 80 99
Jan-11 108 119 98 97
Feb-11 97 94 100 101
Mar-11 108 91 124 99
Apr-11 103 89 117 96

The Savings Index is constructed from monthly research on the attitudes of Irish consumers towards savings.

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 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 1, 2010 as its base period. From January 2011, the Index has been rebased using the year 2010 as the base period.

For media queries or interview opportunities, please contact:

David O’Síocháin, Pembroke Communications
Tel: 01 649 6322 / 087 9362440
E: david@pembrokecomms.ie

Nikki Latchford, Pembroke Communications
Tel: 01 6496428 / 086 1026811
E: nikki@pembrokecomms.ie

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