Number of regular savers drops to 39%

MORE people are saying that they are unable to save money with half of consumers saying they would use any spare cash to pay off debts.

There has been a decrease in those saving regularly, down to 39% in June from 42% last year, with the latest Nationwide UK (Ireland)/ESRI savings index points out reflects the fact that there are people who simply cannot afford to save at present.

More than a quarter of people who are saving are putting away up to €50 per month while 4% are saving more than €500 a month.

More than a third said they would save any surplus money, while 8% would spend any spare cash.

The largest proportion saved with a precautionary motive, while 41% of consumers indicated that they saved for unexpected expenses.

Of those consumers who are able to save occasionally or regularly, the largest proportion, 28%, saved between €51 and €100 a month.

The savings attitude sub-index increased four points to a six month average of 101 since January.

One of the contributing factors in the upward trajectory is that people are less negative about the amount they are saving each month, with 58% now believing that they are saving less than they think they should. This is five percentage points lower than the average level recorded from January to June 2010 and three percentage points below the January 2011 figure.

The six-month average of those who think that now is a good time to save stands at 31%, which is two percentage points higher than the average for January to June 2010. There has also been an increase in the percentage of people who think that government policy is actually encouraging saving, up one percentage point to the 12% average from January to June 2010.

Managing director of Nationwide UK (Ireland), Brendan Synnott said: “In the first half of 2011, the overall index is trending upwards and the main driver of this trend is concerns about the economic environment. This concern is encouraging positive attitudes towards saving in general, even though we are seeing that some people appear to be unable to save.

“In addition, while it is desirable from a government perspective to encourage consumer spending, there is no indication as yet of this becoming a reality.”

People were also more negative about the economic environment in the first half of this year than they were in the first half of 2010. This is reflected in the fact that 31% of people think that now is a good time to save.