The majority of people feel that Government policies are actively discouraging saving, with taxes taking €1 in every €3 that savers earn in interest.
The Nationwide UK (Ireland) ESRI Savings Index has found that people have reached a record level of dissatisfaction with the Government’s policy towards savings.
In February, 60% of people stated that the Government policy discourages saving.
Nationwide managing director Brendan Synnott said that deposit income retention tax (DIRT) and savings taxes are to blame.
“It is basically what happened in the last budget increases in DIRT and tax on savings. It has made it more penal to save as a push to get people out spending,” he said.
Over the last five years, DIRT has gone from 20% in 2008 to the current rate of 33% that came into effect on Jan 1.
Only 5% of the population believe that the Government’s policy encourages saving, but there was an increase to 26% in the number of people that say now is a good time to save, a figure which is up from 23%.
The savings index also recorded an increase in willingness to spend spare money. The level of people willing to part with spare money was at its highest level since Apr 2011, standing at 12%.
Mr Synnott said that there had been an increase of 5% in those aged under 50 who are willing to spend money.
“This is interesting as these are the demographic saddled with mortgages. They seem to have made a decision to spend money. It is too early yet to know if this is a trend or once off,” he said.
Overall the savings index found that 26% of people are saving regularly, which is down 3% from January. There has been a slight increase to 29% in “occasional” saving, while those who say they are not saving at all decreased slightly in February, to 45%, from 46% in January.
Mr Synnott said that due to the European-wide plan of austerity people can’t really save.
“The austerity that has been placed upon people means that it is very difficult to save for anything other than regular expenses,” he said.
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