Water charges ‘will suck money out of economy and slash spending’

The introduction of water charges is going to suck money out of the economy and force people to save for emergencies instead of holidays and home renovations according to the Managing Director of Nationwide UK (Ireland), Brendan Synnott.

The water charges and household fees will depress optimism and force people back into the saving patterns that were seen at the height of the economic crisis. “From what we are seeing the introduction of water charges will prevent people from spending, sucking money out of the economy and resulting in a rise in precautionary saving. It deadens optimism and will have an effect on the regular saver,” he said.

Mr Synnott made his comments as the latest version of the Nationwide UK (Ireland)/ESRI Savings Index shows sentiment falling back to 96 from 100 as savers feel the pinch of government policies.

The decline in the sentiment towards saving was mainly driven by people over the age of 50 who were strongest in their criticism of government savings initiatives.

There has been a rise in the number of people saving for education and training with just under 20% of respondents saving to upskill. Saving for holidays and buying/renovating homes has also increased in popularity.