Wednesday, February 13 10:29:24
People squirreled away a little more cash in January but Irish savers remain largely pessimistic about the overall savings environment, according to the latest Nationwide UK (Ireland)/ESRI Savings Index out today.
The index increased four percentage points in January to 85 but pessimism towards the savings environment has negated the uplift in saving sentiment normally witnessed in January.
In both January 2011 and January 2012 the Savings Index recorded significant increases in positive sentiment towards saving, with jumps of 19 and 23 points recorded respectively in the overall index.
The Savings Environment sub-index, which gauges opinion on whether it is a good time to save and how government policy encourages saving increased to 76 in January from 71in December. This was despite an increase to an all time high of 54pc in the proportion of people who believe that now is a bad time to save. The level recorded is 13 percentage points higher than January 2012.
The number of people now not saving at all fell to 46pc from 48pc in December. In January 2012, 31pc of people were not saving at all while 64pc reported that they were uncomfortable with the amount they were able to save. Only 14pc were happy with the amount they were saving each month.
Commenting on the index, Brendan Synnott, Managing Director of Nationwide UK (Ireland) said, 'The index rebounds every January, however this year the level of increase is significantly smaller than in previous years as the underlying factors that have been driving the index downwards for the past 12 months continue to apply."
"The proportion of people not saving has increased by 15 percentage points in the last year and there has been a 13 percentage point increase in the proportion of people who think that now is a bad time to save. While these dynamics remain in place, the index will continue to trend downwards."
"On a more positive note, people are more optimistic about their ability to save in the future with 20pc of people saying that they expect to be able to save more in six month time than at present, an increase from 13pc this time last year."
The latest Savings Index data revealed that 53pc would pay down debt with spare funds which is up 3pc on December 2012 and at the same level as was recorded in January 2012. Those that would save spare cash fell from 38pc to 33pc while there was a slight improvement in the preference to spend spare cash, increasing from 6pc in December to 9pc in January.
When deciding where to place their savings, 30pc cited the level of protection or guarantee available as the deciding factor. The other key factors included the institution having a physical presence in their community (20pc) and the interest rate offered (19pc).