Concerns about the future of the Eurozone last month saw Irish people increase the amount of savings they stow away, the latest Nationwide UK (Ireland)/ ESRI Savings index out today shows.
Those that are able to save are doing so with a precautionary motive as the ongoing uncertainty continues to have a negative impact on consumer confidence.
In July, the Savings Index increased to 98 from 91 the previous month.
The increase is primarily driven by an 18 point jump in the Savings Environment Index, one of two sub-indices that make-up the Savings Index. The Savings Environment Index measure the impact of events in the wider economic environment on attitudes towards saving. This sub-index now stands at 115, the highest level recorded since October 2011.
The survey shows that 31% of people in July think that now is a good time to save compared to 27% in June. This increase is witnessed in both the over and under 50 age groups. There has also been an increase in the number of people who believe that Government policy encourages saving to 13% in July from 10% in June.
Despite increased positivity towards the idea of saving, major concerns remain about an individuals’ ability to save and there is growing dissatisfaction with the level at which they are able to save.
Only 32% of people are saving regularly which is 4% down on June and 6% down on July last year. 51% feel they are saving less than they think they should, an increase of 2% on the previous month. Half of those surveyed have a precautionary motive for saving while 31% are saving for a specific purpose such as a major purchase, holiday or event.
Commenting on the Index, Brendan Synnott, Managing Director of Nationwide UK (Ireland) said, “Events in the wider economic environment and continuing pressure on personal circumstances are making the prospect of a consumer led recovery less and less likely. The continuing instability in the Euro currency and a lack of clarity on a potential solution is resulting in people continuing to keep a tight rein on their spending and a continued focus on saving for unexpected events in the future.
“Worryingly, a decline in the number of people saving has been apparent since the start of 2012. This month, only 32% of people are saving regularly and our data and other studies support the contention that this is due to an inability to save. While these issues continue to prevail, it is hard to see how a consumer led recovery will emerge.
“When deciding who to open a savings account with, 34% said that the level of protection or guarantee on offer was the most important factor, an increase from 21% in May of this year. A high street presence in the local area was the most important factor for 29% while a further 13% cited the rate on offer as the determining factor,” he said.