‘Neutral’ Budget boosts consumers’ sentiment to saving

Ahead of tomorrow’s Budget, consumers say that they are in a better position to save, thank to an improving environment.

The Nationwide UK (Ireland) / ESRI Savings Index, which measures overall sentiment towards saving, increased to 114 in September, up 17 points on last month.

Brendan Synnott, managing director of Nationwide UK (Ireland), said the results are a continuation of the positive trend that has been in place since the start of 2014.

“ The pattern of a return to regular saving continues, particularly amongst the under 50s and people are now saying that the environment for saving is also more positive,” he said, adding, “Each year the Budget has a significant impact on consumer attitudes and with a neutral budget to be delivered this year following a prolonged period of cutbacks, we would expect overall consumer confidence to continue to improve.”

The increase in the index is primarily driven by a 20 point increase in the Savings Environment sub-index, which asks if people believe now is a good time to save and whether they think government policy encourages them to save.

Indeed the proportion of people who think that government policy encourages saving increased to 10 per cent in September, from 6 per cent in August, while negativity towards government policy on saving decreased by 6 percentage points to 57 per cent.

The proportion of people saving regularly increased to 37 per cent in September, from 36 per cent last month. This increase is driven by those aged under 50 with 41 per cent of this age group now saving regularly compared to 38 per cent last month. The proportion of people who are satisfied with the amount they are saving increased to 19 per cent compared to 16 per cent last month.

According to the survey, almost one in two of respondents said they would pay off debts, including their mortgage, with any extra money they might have, down from 51 per cent a year ago; 34 per cent said they would save, up from 33 per cent a year ago; while 11 per cent said they would spend it, up from 9 per cent a year ago.