Regular saving ‘back to normal’

The number of people saving regularly has returned to a normal level for the first time in almost two years despite widespread dissatisfaction with government policy.

The level of regular saving has gradually improved this year and in July returned to the normal long-term level of saving among consumers, according to the Nationwide UK (Ireland)/ ESRI Savings Index.

The proportion of people saving regularly increased to 41% from 35% the previous month, despite just a quarter of those surveyed believing that now is a good time to save.

Negative sentiment towards government policy in the area has been growing with successive decreases in the number of people who are satisfied with the savings environment.

Commenting on the results, Nationwide UK (Ireland) managing director, Brendan Synnott said: “The increase in the index this month reflects the improvement in the overall economy. It appears people have absorbed the impact of the property tax introduced in 2012 and are now rebuilding their personal finances.

“This month’s data suggests that personal finances are improving with regular saving increased to normal levels. A further positive dynamic is the change in preferred use for spare funds.

“Preference to pay down debt is declining while more people say they would spend, which may well translate to an increase in retail sales,” he said.

The increase in the number of people willing to spend excess funds was modest at just 1%, up to 14%, while 8% of consumers said that they would invest any extra money.

The proportion of people who would save discretionary funds rose to 38%, just shy of the 40% who would pay off any debts.