Trend for saving continued in 2011
HOUSEHOLDS HAVE continued to save a large proportion of their incomes in the third quarter of 2011, according to new figures published by the Central Statistics Office.
Gross saving by households stood at €3.9 billion during the three-month period, or 17.3 per cent of their aggregate incomes.
This is broadly in line with amounts saved since the recession began but marks a continuation of the slight downward trend in evidence for almost three years.
Before the recession began, households saved much less and instead consumed a larger proportion of their incomes. Much of the increase in household savings is being used to pay down debt.
As the chart below shows, a gap has opened up between the disposable income of households and the amount they spend. Although both have declined since the bursting of the property bubble, spending has fallen by considerably more than incomes, as households save more.
In the third quarter of 2011, the aggregate gross disposable income of households was 16 per cent lower than the all-time peak, reached in early 2008.
Total quarterly spending by all households fell by more than 24 per cent between the third quarter of 2011 and the record high, reached at the end of 2007.
The figures are not adjusted for inflation or seasonality. As incomes are lower in the final quarter of each year (as tax payments fall due) and spending is higher (owing to Christmas), the unadjusted figures are volatile.
Yesterday’s figures also provided data on companies, financial institutions and the Government.