Fewer Irish people saving as austerity erodes disposable income

Fewer Irish people are saving money because of the ongoing pressure on disposable income caused by austerity and recent hikes in Dirt tax.

According to the Nationwide UK (Ireland)/ESRI Savings Index, regular saving has declined across all age groups with only 32 per cent of people putting money aside regularly compared with 36 per cent a year ago.

The proportion of people who are not saving at all increased to 46 per cent in June from 43 per cent a year ago.

The overall index remained flat at 86 in June but was down 15 points on the same month last year on account of “increasing negativity about the amount being saved and the environment for saving”.

The report suggested negativity towards saving, however, was different for each age group.

People under 50 are concerned with the amounts they are currently saving, with 68 per cent saving less then they think they should and only 12 per cent happy with the amount they are saving, the report revealed.

In contrast, those over 50 are more concerned with the savings environment as 62 per cent believe that Government policy discourages saving, an increase from 53 per cent a year ago.

Managing director of Nationwide UK (Ireland) Brendan Synnott said: “In the past year sentiment towards saving has decreased considerably as people continue to manage their way through austerity.

“We are now seeing clearly diverging opinions being expressed by those aged under 50s compared to those aged over 50.”

“The younger consumer is clearly not satisfied with their ability to save, presumably due to their on-going day to day expenses and reduced disposable income.”

“The over 50s are the traditional saver in the economy and this group has seen the return on their savings reduced as Dirt tax has increased and savings rates for the most part have decreased.”

"Despite these immediate concerns around saving, the fact that 37 per cent of people would save any spare cash available is a positive indicator about the overall savings culture in Ireland. "