Irish households’ disposable income increased by 2.2 per cent or €480 million in the second quarter of 2012, compared to the same period last year.

The increase is mainly due to a €473 million rise in profits for the self-employed, according to quarterly institutional sector accounts published yesterday by the Central Statistics Office.

Household savings increased by €700 million over the same quarter as consumers continued to rein in spending. Consumer spending fell throughout the second quarter, maintaining a four-year falling trend.

Household savings are primarily used to pay down debt and fund property investment, according to the CSO.

Household spending fell by €206 million in the second quarter when compared with the same period last year.

The Institutional Sector Accounts – Non-financial and Financial 2011, which brings together information on the activities of households, businesses and the Government sector, shows gross savings of Irish households, which stood at €10.7 billion in 2010, decreased to €9.3 billion in 2011.

Expressing household savings as a proportion of the gross disposable incomes of households, the derived savings ratio fell from 12 per cent in 2010 to 10.7 per cent in 2011, according to the CSO. The EU savings ratio fell during the same period from 11.7 per cent to 11.1 per cent.