Decline in Savings Index Could Indicate Positive Move Toward Consumer Save/Spend Balance

Nationwide UK (Ireland)/ESRI Savings Index Results for August

The Nationwide UK (Ireland)/ESRI Savings Index declined by six points in August to 105 as divergent concerns temper attitudes towards saving.

Divergent attitudes of the over and under 50 age groups are apparent and driving the decline of the Savings Index in August.

The Savings Attitude sub-index declined by five points in August to 94. This was primarily driven by the over 50 age group who showed a more negative attitude towards the amount that they are currently able to save.

The overall percentage of people who feel they are saving less than they think they should rose by four percentage points to 56%, however this overall position includes a ten percentage point increase among over 50s compared to no change among the under 50s.

Regular saving has increased among the under 50s from 38% in July to 43% in August, while no similar increase has been recorded among over 50s. Only 49% of the over 50s group think that it is personally important to save compared with 70% of the under 50s.

The Savings Environment sub-index also declined by seven points in August to 117. A six percentage point decline in the number of people who think that now is a good time to save is being primarily driven by those aged under 50. At the same time, 53% of under 50s believe that government policy is discouraging saving compared with 47% of over 50s.

Commenting on the Index, Brendan Synnott, Managing Director of Nationwide UK (Ireland) said: “The decline in the Index this month is welcome from a wider economic perspective. It provides some evidence that the anxiety amongst consumers which was apparent earlier in the year has eased somewhat. The Index is still trending above 2010 levels so there is a long way to go before we get back to normal saving and spending patterns.

“The emerging differences between the concerns of those aged under and over 50 also provide some insight to the requirements of different consumers. Those aged over 50, who are more likely to have accumulated savings, have a heightened concern about the impact of the wider economic environment on these hard earned resources. There is also obvious concern about potential future taxes on savings.

“Those aged under 50 seem to be under pressure from all sides, they are more likely to have to save regularly for things like children’s education or to make provision in the event of losing their jobs. These people need reassurance from government and more signs that things are at least stabilising, since it is still too early to think about an improvement in economic conditions.”

When asked what they are saving for, the highest proportion of people surveyed, 41%, indicated that they are saving for unexpected expense with a further 12 % saving for education/training.

When asked what they would use any surplus funds for, 47% said they would pay off debts, including mortgages; 40% would save; only 7% would spend spare cash with a further 7% preferring to invest in a pension or shares.

25% of consumers save between €51 and €100 a month while 24% save between €101 and €200 per month.

Full Savings Index information is available at www.nationwideuk.ie

Highlights:

  • Savings Index declines by six points in August
  • Savings Attitude Sub-index declines by five points
  • Savings Environment sub-index declines by seven points
  • Divergent attitudes of over and under 50s driving the decline

Index data summary

Month
Savings Index
Savings Attitudes 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
May-11 128 121 136 97
Jun-11 98 90 105 99
Jul-11 112 99 124 97
Aug-11 105 94 117 99

About the Savings Index

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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