Savings index shows upward shift

THE Nationwide UK (Ireland)/ESRI Savings Index increased by 19 points in January, recovering from December’s 11 point decline.

The upward shift in sentiment reflects the fact that consumers have begun “the New Year with a strong desire to save”, the latest research shows.

“Looking at the trend since the autumn, and ignoring the impact of the budget in December data, the index has been trending upwards, indicating an increase in saving behaviour and a reluctance to spend among consumers,” said Brendan Synnott, managing director of Nationwide UK (Ireland).

This trend, combined with other measures of economic behaviour, means “there is still no sign of a consumer demand-led contribution to economic recovery and this situation is unlikely to change, at least until after the general election, ” he sad

The rise in the January Index was driven by increases in both attitude to savings and the savings environmentoverall.

A 22-point gain in the Savings Attitude Index was driven by an increase in the percentage of people who are saving regularly, up from 37% in December to 40% in January.

The latest research showed also there was a decrease in the percentage of people who believe they are saving less than they think they should.

That was down from 63% in December to 61% last month.

The Savings Environment saw an 18-point gain driven by a three-point rise last month in the percentage of people who believe now is a good time to save.

That came in at 28% in the January survey, as against the 25% figure recorded in December.

In contrast, the percentage of people who believe that now is a bad time to save fell from 47% in December to 41% in January.

Last month also saw a slight decline in the number of people who said they would use surplus cash to pay off debts including mortgages (55% in December versus 53% in January).

Meanwhile, just 10% said that they were prepared to spend spare cash.