Savings Index Declines as Positive Feeling Towards Government Policy on Saving Fades

March 10, 2015

News
Macroeconomics
More than half of consumers dissatisfied with the amount they save

The Nationwide UK (Ireland) / ESRI Savings Index, which measures overall sentiment towards saving, decreased to 105 in February, from 111 in January 2015.
The overall decrease is driven by the Savings Environment sub-index, which asks if people believe that the current period is a good time to save and whether government policy encourages people to save. This fell to 89 in February from 100 in January.

The primary reason for this is that the proportion viewing government policy as encouraging of saving fell 4.6 per cent in February to just 5.4 per cent, the lowest recorded level since February 2013. However, there was also a decrease in the number of people who believe now is a bad time to save  (37.1 per cent in January versus  32.9 per cent in February).

Meanwhile, the share of respondents who believe now is a good time to save increased to 33 per cent in February from 28 per cent the previous month. This is the highest level since May 2014.

The Savings Attitude sub-index, which asks respondents about their saving behaviour and how they feel about the amount they save, decreased marginally to 120 from 121 in January. The three-month moving average also fell to 122 from 124 in January.

The proportion of those who save either regularly or occasionally fell to 61 per cent, from 65 per cent in January. Similarly, the share of those dissatisfied with the amount they save fell to 55 per cent, from 59 per cent in January.

Consumers are also asked about their preference as to how they might allocate any money over and above their everyday needs. The share who say they would use the surplus to pay off debts, including their mortgage, fell to 40 per cent from 48 per cent the previous month. A further 13 per cent said they would spend it, while 7 per cent said they would invest it. There was an increase in the proportion of respondents who would choose to save the money, from 34.7 per cent in January to 40 per cent in February.