Business

Irish households save almost €17bn in 2023 but higher prices keeps pressure on

Households added €16.8 billion in savings to their wealth in 2023, compared to €17.6 billion previous year

At the height of the pandemic in 2020, households here saved almost €30 billion. Photograph: iStock

Eoin Burke-Kennedy
Mon Mar 11 2024 - 11:55

Households in the Republic added €16.8 billion in savings to their wealth in 2023, compared to €17.6 billion previous year.

At the height of the pandemic in 2020, households here saved almost €30 billion by spending less on items such as transport, childcare, holidays and eating out. Since then savings rates have returned to pre-pandemic levels.

As spending accelerated faster than incomes, a reflection of inflation, the saving rate (the percentage of disposable income that it set aside) fell from 12 per cent in 2022 to 11 per cent in 2023, the Central Statistics Office (CSO).

Household saving is added to wealth either as real assets (such as new homes), or financial assets (such as deposits), or as paying off liabilities (such as mortgage debt). In the final quarter, before adjusting for seasonality or inflation, households saved €207 million.

READ MORE

The savings rate during the quarter declined slightly from 10.47 per cent to 10.19 per cent. While the rate is broadly stable, the CSO noted, this was the third successive quarter in which it has declined.

This may be indicative of the pressure on households from higher prices.

“Due to inflation, incomes are rising more slowly than they did before the pandemic. At the end of 2023, even taking into account inflation, household incomes were higher than they were at the start of the year,” it said.

“This is in part due to more people being in work,” it added. The number of people at work in the State rose to a record 2.71 million last year.

Eoin Burke-Kennedy

Eoin Burke-Kennedy

Eoin Burke-Kennedy is Economics Correspondent of The Irish Times

LATEST STORIES