Cost-of-living squeeze forces Irish households to spend more and save less

CSO figures show household savings rate fell below 10 per cent in the third quarter of this year

Irish households have reverted to pre-pandemic saving patterns as ongoing cost-of-living pressures force them to spend more.

Central Statistics Office (CSO) data show the household savings rate fell from 11 per cent to 9.6 per cent (or €3.6 billion) in the third quarter of this year.

“At 9.58 per cent this quarter, this is the first time it has fallen below 10 per cent in three years but leaves it at a similar level to pre-pandemic savings in 2019,” the CSO said.

The savings rate is the proportion of disposable income that is saved rather than spent.


Before the pandemic, households saved on average 10 per cent of their disposable income, with consumer spending making up the other 90 per cent.

However, during the pandemic so-called lockdown savings soared as households here spent less on things like transport, childcare, holidays and eating out. An additional €16 billion was placed on deposit in 2020.

“In current prices, both income and consumption rose, with a decline in savings due to consumption increasing more than disposable income,” it said.

In 2021, the CSO drew a parallel between the additional billions being placed on deposit in 2020 – so-called lockdown savings accruing from households not being able to spend – and the €12 billion added at the height of the SSIA incentive in 2006.

Back in 2006/2007, the SSIA money added to existing overheating pressures in the economy. The turbo-charged growth of 2021 and 2022 was linked to a rapid resurgence in consumer spending, which was in turn linked to the unwinding of excess savings built up during the pandemic.

SSIAs were introduced in 2001 by former minister for finance Charlie McCreevy to incentivise household saving. As part of the scheme, the government topped up savings in SSIAs by 25 per cent of the amount saved each month over a five-year period. The scheme attracted about 1.1 million subscribers and saw the accumulation of an estimated €16 billion in savings.

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Eoin Burke-Kennedy

Eoin Burke-Kennedy

Eoin Burke-Kennedy is Economics Correspondent of The Irish Times