Government policy ‘curbs savings’
The savings index found the highest level ever recorded — 60% of people think that government policy discourages saving, up from 57% .
Managing Director of Nationwide UK (Ireland), Brendan Synnott, said the savings environment has become increasingly negative.
“Clearly the environment for savers has become more negative. During 2012 people have found it increasingly difficult to save while at the same time, deposit interest rates have fallen, thereby reducing their return for saving.
“This most recent data is now showing that government policy, as demonstrated by the increase in tax on deposit interest, is a further blow,” he said. As a result there has been a marked increase in the number of people not saving at all — 48%,” said Mr Synnott.
This is a one percentage point increase on the previous month but a 15 point increase compared to Dec 2011; while 65% believe that they are saving less than they should while only 13% say they are saving more than they think they should.
Despite the decline in the percentage of people actually saving, people say they still want to save, usually out of fear of an unexpected accident or fall in income.
Mr Synnott said: “Despite these difficulties, almost 40% of people continue to express a preference to save any spare cash available and this saving is driven by precautionary motives.”
The largest proportion of those surveyed indicated that they are saving as a precautionary motive, with 45% saving for unexpected expenses. A further 14% are saving for education; 7% are saving for a holiday; 8% are saving to buy or renovate a home; 9% are saving for a large consumer purchase and another 7% are saving in case their income falls.
The percentage of people saying that they would spend their excess money has fallen dramatically to only 6%, with half of respondents saying that they would use any excess money that they had to pay off debts.
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