Savings Index at its Highest Level Since September 2014

January 13, 2015

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The Nationwide UK (Ireland) / ESRI Savings Index, which measures overall sentiment towards saving, increased to 107 in December, up 19 points since December 2013.

The overall increase is driven by the Savings Environment index, which asks if people believe that the current period is a good time to save and whether they think government policy encourages people to save. This increased to 90 in December versus 81 in November.

There has been an increase in the proportion of people who express a positive view on government policy towards saving. In December, 9% of people say government policy encourages saving, an increase from 6% in November. This increase is most apparent among those aged under 50 with 13% of this group expressing a positive view compared to 7% last month.

Meanwhile, the proportion of people who believe now is a good time to save fell to 26% from 29% last month. Optimism for the future remains strong with 93% of people saying that, in six months’ time, they expect to be able to save the same amount or more than they do at present; this compares to 91% last month.

Meanwhile, the Savings Attitude sub-index, which asks respondents about their saving behaviour and how they feel about the amount they save, decreased to 125 from 127 in November. The three-month moving average remained unchanged at 120 in December.

The proportion of people who save regularly declined to 35% in December from 37% in November. This decline is most apparent among those aged under 50 with 37% of this group not saving, down from 42% last month. Among those aged over 50, 33% are saving regularly, an increase from 30% in November. The proportion of people who are happy with the amount they are saving declined slightly to 18% from 19% last month.

Consumers are also asked about their preference as to how they might allocate any money over and above their everyday needs. The proportion of people, who say they would use the surplus to pay off debts, including their mortgage, fell to 41% from 44% in November. A further 13% said they would spend it, an increase from 11% last month; 8% say they would invest it, the same as last month.