Leadership

80pc of Irish now saving their money

12.11.2009
Over 80pc of Irish people are now saving their money either on a regular or lump-sum basis, with the majority saving for emergency funds, a new survey has revealed.

The figures were included in the latest Postbank Quarterly Savings Index, which showed that the number of Irish people saving has risen by 7pc in the past year.

However, while more people are saving, they are saving smaller amount, the survey indicated. The average amount Irish people are saving is around €305 per month, down from €344 when the index began in 2008, a reduction of 12pc.

The outlook for savings over the next few months reflects a continuing trend to lower savings levels, Postbank said. A quarter of people surveyed said they were likely to reduce the amount they save in the coming quarter. However, only 2pc indicated that they were likely to stop saving altogether.

Building up a buffer
Commenting on this trend, Head of Marketing at Postbank John Donegan said: “We are seeing an increasing number of people saving smaller amounts. We are also seeing that the gap between men and women saving has been reduced dramatically, with men likely to save larger amounts.

“The switch from spending to saving more is a product of the economic circumstances, as we build up a buffer during times of uncertainty," he added.

The rainy-day factor
In terms of what people are saving for, the rainy-day factor has been constant since the index began, as having an emergency fund or safety net remains by far the most powerful motive for savers.

Notably, for the first time since the Postbank Index began in 2008 over half of savers believe they will have to dip into their savings in the coming months. Women in particular look likely to dip into their savings, with a 9pc rise to 56pc in the number who will have to reduce their balances in the coming months.

The ESRI expects to see savings stay high in Ireland, with indications that in 2010 people will save about 13pc of their income, which is the highest level since 1978. This is then expected to fall off after 2010 with a gradual return to increased spending.