Saving index hits lowest point in 10 months

The number of people putting money aside for a rainy day fell to its lowest level in 10 months in October, driven by negative consumer sentiment towards water charges.

The Nationwide UK (Ireland)/ESRI Savings Index, which measures overall sentiment towards saving, decreased to 94 in October, down 20 points on September. The Savings Attitude sub-index, which asks respondents about their saving behaviour and how they feel about the amount they save, decreased to 107 in October from 126 in September.

The proportion of people saving regularly decreased to 32 per cent from 37 per cent last month, the lowest level recorded since August 2013.

The decline is most apparent among the over 50’s with 51 per cent of these groups not saving at all in October, up from 43 per cent in September.

However, optimism for the future remains strong with 94 per cent of people saying that in six months’ time, they expect to be able to save the same amount or more than they do at present.

Brendan Synnott, managing director of Nationwide UK (Ireland), said the planned introduction of water charges, which has dominated the news recently is reflected in negative sentiment on government policy towards saving, which in turn has driven the decline in the Savings Index.

“It is also concerning that preference to spend, which had been at or above 10 per cent during the year has fallen back to 9 per cent this month despite economic indicators continue to improve. This may suggest that the water charges issue could have a negative impact on overall consumer confidence until such time as clarity is provided on the new structure and extent of the charges to be introduced,” he added.