One in three consumers don’t save

ONE in three consumers are not saving at present — a slight increase over last month, the latest Nationwide UK (Ireland)/ESRI savings index shows.

However, the index also found that consumers are more positive about the savings environment, while their attitudes towards saving in general have remained relatively static.

In September, 37% of consumers believed that now is a good time to save compared with 27% in August; while 33% of respondents believed that now is a bad time to save, a decline of 11% from August.

The percentage of people saving regularly in September rose to 44% from 41% in August but there was a 3% increase in the number of people who were not saving at all to 31%.

The index shows that 56% believe that they are saving less than they think they should but only 9% expect to be saving more in the future and 28% believe that they will be saving less.

Managing director of Nationwide UK (Ireland), Brendan Synnott, said: “The stabilisation in the index reflects the wider performance of the economy. In the past year, concerns about the economic climate have consistently driven the overall savings index upwards and contributed to big variations in responses from consumers each month.

“While the index is still trending above the 2010 level and there is no indication as yet of an increase in spending by consumers, recent positive announcements on the public finances, the cost of borrowing, jobs and the central bank’s projections for improved growth appear to be stabilising the index as demonstrated by the small increase this month.”

According to the findings, 56% of people would use surplus cash to pay off debts including mortgages.

A third said they would save any surplus cash while just 8% said they would spend it. The percentage of people saving with a precautionary motive remained relatively static at 40%.

“Consumers still perceive a risk in the economic environment and therefore believe that they should save to protect themselves from its possible impact. Until this risk is reduced, it is unlikely that we will see an increase in consumer spending,” said Mr Synnott.

While 28% of regular savers are saving between €51 and €100 per month, 26% are saving between €101 and €200 per month.