More than four in 10 Irish people do not save a penny, according to a new survey.
The latest Nationwide UK (Ireland)/ESRI Savings Index for June published today indicated that 43% of Irish people are not saving at all.
It is the highest level of non-saving recorded since 2010, and an increase of 35% on last year.
Among the under 50s, 30% of people are not saving, and among the over-50s 49% said they are not putting any money away.
“The overall household deposits market has stabilised over the past year and now amounts to €92bn, however a number of factors are now combining to make saving either less appealing or more difficult for a growing number of Irish people,” said Brendan Synnott, Managing Director of Nationwide UK (Ireland).
“The economic environment has become less favourable towards saving as evidenced by reductions in deposit interest rates by numerous institutions, including ourselves.
“The deposit interest rates being paid in the market are not sustainable and it is likely that interest rates will fall further over the next year.”
Mr Synnott also said that the level of tax on savings has increased during the year making the return from savings less attractive.
“At the same time, the majority of people who have spare funds available are using them to pay down debt, possibly because there is less credit available,” he added.
The Nationwide /ESRI Savings Index also asked people what they’d do with extra money – and only 8% percent said they would spend it – with the rest allocating it to pay debts or save.
“On a more positive note, people now seem to be less fearful about what the future holds and their ability to save in the future,” Mr Synnnott added.
Some 78% of people expect to maintain their level of saving over the next six months, an increase from 63% in June 2011, according to the Index.