More people are saving but sums are smaller - study

THE NUMBER of people putting money aside in banks or building societies has risen over the past year, but most individuals are saving smaller sums.

The latest Postbank Quarterly Savings Index, published today, shows that 80 per cent of people are now saving either on a regular or lump sum basis, up 7 per cent compared to a year earlier.

However, the average amount of savings is €305 per month, down 12 per cent from the €344 recorded in 2008.

Perhaps not surprisingly, the Postbank index reveals that 25 per cent of those surveyed expect to put less money aside during the fourth quarter.

However, the amount spent by consumers during the festive season is forecast to be way down on previous years, with over half of survey respondents saying they will be spending under €500.

A separate study from Deloitte also confirms the spendthrift trend, with consumers expected to spend 22 per cent this Christmas.

This year, Irish consumers say they intend to spend nearly 30 per cent less on gifts, 6 per cent less on food and nearly 22 per cent less on socialising.

Ireland, which has traditionally been the biggest spender over the holiday season, has now fallen to second place in the European spending table behind Luxembourg.

The Deloitte survey, which was carried out in September and October, shows that the average spend per household in Ireland this festive season is expected to be €1,110. Of this, €660 will be spent on gifts, with €265 going on food and €185 on socialising.

According to the survey, 74 per cent of Irish people said they have less to spend than this time last year, with 60 per cent stating their personal financial situation has declined as a result of the recession.

While 40 per cent of people said they still feel secure about their jobs, 25 per cent of respondents were unemployed at the time the survey was taken, and 35 per cent forecast that their household’s financial position would deteriorate over the next 12 months.

“There can be little doubt that Christmas in Ireland has finally become a victim of the recession. It’s clear that a strong feeling of anxiety prevails, and is sharply constraining the propensity to consume,” said Susan Birrell, consumer business partner, Deloitte.