ALMOST half of people surveyed said they are now saving regularly with many believing the Government is doing nothing to encourage a savings culture.
According to the Nationwide UK (Ireland) savings index, however, two thirds of people are saving less than they think they should, while 47% do not consider it to be a good time to save given the economic conditions.
At a personal level, 45% of people are saving regularly, an increase from 38% in May.
Managing director of Nationwide UK (Ireland), Brendan Synnott said: “Since March we have seen the gap widening between the importance of savings and the savings behaviour of individuals.
“People are increasingly expressing the view that the current economic conditions mean that it is not a good time to save.
“This may reflect the current low interest rate environment for deposits but there has also been an increase in the percentage of people who say theyare not saving as much as they should and this suggests that less disposable income is available for saving.”
More than half of people surveyed said they would use surplus money to pay off debts, including their mortgage. A third would save while 10% would spend any spare cash.
“In broad terms, there remains a need for Irish consumers to increase savings in order to rebalance the economy. So far, the rise in savings has not benefited deposit accounts, as higher savings have mostly taken the form of debt repayment. The low interest rate environment has contributed to making debt repayment more attractive than accumulating deposits.
“However, over time deposits should benefit from the higher propensity to save that has resulted from the recession and we are already seeing signs of this in that the proportion of Irish consumers reporting that they save regularly has increased to 45% in June from 38% in May,” said Mr Synnott.
Since its launch in March, there has been a continuous downward trend in the savings index as personal and environmental measures declined and negative sentiment towards savings outweighed the positive.
Even though a majority of consumers think they are saving less than they should, half think they will be saving the same amount in six months time. Just 13% expect to be saving more in the future than at present and a third think they will be saving less.
The survey also showed that 11% of respondents think that government policy encourages saving, with a majority of 47% saying government policy discourages them from saving.
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