Savings rate falls as incomes stay flat in fourth quarter of 2025

CSO said the decrease in the seasonally adjusted household saving rate 'was due to a combination of a flat level of household income combined with an increase in spending'

Between October and December, there was €1 saved for every €8 of household disposable income.

Flat incomes and higher consumer expenditure during the final months in 2025 led to a decline in the country’s household savings rate, new data from the Central Statistics Office (CSO) shows.

Between October and December, the seasonally adjusted household saving rate was 12.4%, the equivalent of €1 saved for every €8 of household disposable income. This is down from 14.2% recorded during the period July to August last year, and also below the average of 13% since the start of 2023.

According to the CSO, in the fourth quarter of 2025, household consumption was up 2% — compared to the previous quarter — while incomes were largely flat, down 0.1%.

CSO statistician Mark Manto said the decrease in the seasonally adjusted household saving rate “was due to a combination of a flat level of household income combined with an increase in spending on final consumption”.

“The saving rate tends to be more variable in quarter four each year due to additional household spending at Christmas. The provisional 2025 saving rate was 13.6%, similar to 2024 and higher than 2023,” he said.

“Saving can add to a household's overall wealth in the form of buying new homes, growing bank deposits, pension savings, and paying off debt.” 

During the last quarter of 2025, before adjusting for seasonality or inflation, households saved €2.5bn. Investment in homes and improvements was €6.25bn, while contributions to pension funds were almost €1bn.

Housing spending on goods and services during that three-month period reached €42.9bn — an increase of 9.6% quarter-on-quarter. When the effect of price changes is also removed, the volume of consumption increased by 0.9%.

Total disposable income of households was €45.3bn.

The largest component of household income was wages, which stood at €39bn in the fourth quarter. In addition to wages, total disposable income also includes other income such as self-employed earnings, interest and dividends received, and social benefits, but is after deduction of income taxes, social contributions and interest paid.

Chief executive at financial adviser firm Ask Acorn Keith Butler said while €2.5bn was saved by Irish households during the fourth quarter “thousands of people are actually losing money by letting their hard-earned cash sit in low-interest deposit accounts”.

“Recent discussions about State-backed savings schemes could encourage more people to invest, and public provision is a starting point, but households need to actively plan and take advice to make their wealth work for them.” 

Finance minister Simon Harris has been floating the idea of incentivised investment accounts, similar to that of some other European countries such as Sweden, in order to provide more investment opportunities for people’s savings.

According to the latest data from the Central Bank of Ireland, household savings increased by €1.5bn in January, and stood at a combined €171.3bn at the end of the month. Overnight deposits stood as the main driver of the increase, up €1.4bn.

Mr Butler added that for those with a longer-term horizon of five to seven years or more, “placing a portion of savings into investment products can help protect against inflation”.