Majority of consumers happy with saving habits

Last month there was an increase in the number of people saving for their retirement, but most still use surplus cash to pay off outstanding debt, including mortgage repayments.

The August edition of the monthly savings index from Nationwide UK (Ireland) is the penultimate survey before October’s budget announcement.

Published yesterday, it shows that 51% of consumers believe they are saving what they should be, with an increasing number saying they put aside more surplus income than necessary.

The survey found 34% of consumers said they would save any surplus cash (down from 39% in July), but 44% said they would use extra funds to pay off debt.

The percentage of people saving for their retirement doubled, in August, to 8%.

While sentiment about saving has improved, Nationwide UK (Ireland) managing director, Brendan Synott, said the savings environment was a blurred picture.

“Although the majority of consumers feel they are saving what they should, or slightly more, the proportion of consumers who consider it a bad, or very bad time, to save has actually increased by 6% since July,” he said.

The savings environment sub-index, which measures whether now is a good time to save, fell from 121 points, in July, to 98, last month.

“From our ongoing research, over the last number of months, it is evident that the current, low interest-rate environment, and Government’s policy on savings, is a cause of dissatisfaction with consumers.

"As the announcement of Budget 2016 approaches in a few weeks’ time, it will be interesting to see whether this negative perception of the current savings environment will change in the run-up to budget.”