Irish saving rate rises to more than 14% despite rising prices

Of the €25bn saved by Irish households last year, €16bn was invested in fixed assets, mainly new homes, with the remaining being invested in financial assets

Income also rose, due to increased income from work, but also higher investment income on households' €500bn in financial assets.

Household savings rose significantly last year, increasing to €25bn, latest figures from the Central Statistics Office (CSO) shows.

Releasing its Institutional Sector Accounts Non-Financial statistics for the final three months of 2024, the CSO said total savings rose from just €23bn in the previous year.

Of the €25bn, €16bn was invested in fixed assets, mainly comprising new homes, with the remaining being invested in financial assets including deposits and pension funds, as well as reducing financial liabilities such as mortgage borrowing. 

The saving rate, which is the proportion of income that is left over after current consumption, was 14.2%, up from 13.6% in 2023, with CSO statistician Peter Culhane noting that higher volumes as well as higher prices contributed to consumer spending increases in the year. 

It comes as recent data released by the Central Bank of Ireland shows households are still holding onto the billions in savings they made during covid, while households across Europe have largely spent theirs.

A research paper conducted by the regulator this month found little evidence that Irish consumers are spending the savings they made, and households here continue to save at a higher rate than they did before the lockdowns of 2020 and 2021.

Between March 2020 and May 2022, Irish households saved an extra €13.8bn. But since then, savings have continued to rise, increasing at a monthly average of €514m, a rate greater than pre-covid levels.

On top of this, households' preference for shorter-term, more accessible deposit account cost them almost €800m in unearned interest in 2024 alone.

Meanwhile, overall household income rose due to higher earnings from work and more investment income, such as deposit interest.

The CSO also added that economic indicators for the economy as a whole were positive, with gross domestic product (GDP) 5% higher when measured in current prices, and gross national income (GNI) up 4%.

The government surplus was €24bn in 2024 including €5bn being added in the final three months of 2024. Total government tax receipts were €103bn in the year, of which €31bn came in between October and December.