Household wealth slips by €12bn amid falling share prices

Irish households had approximately €12 billion wiped off the value of their financial assets last year on the back of falling equity values.

The net wealth of Irish households in terms of financial assets – separate from housing – stood at €359 billion at the end of last year.

This comprised mainly of bank deposits, equity holdings, pensions and other insurance products. The measure is separate from and in addition to wealth held in assets such as property.

In its latest set of institutional sector accounts, the Central Statistics Office (CSO) noted the €359 billion figure was down from €371 billion the previous year. The year-on-year decline was driven – in the main – by falling equity values.

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Sticky inflation and aggressive interest rate hikes triggered a decline in stock markets last year, with most major indices falling in 2021.

Household financial assets held in the form of deposits totalled €195 billion last year; equities and investment fund holdings came to €88 billion; while the value of insurance, pension and standardised guarantee schemes came to €208 billion. The €359 billion net figure was arrived at when €129 billion of loans was subtracted.

The CSO figures show households here accumulated a further €18 billion in savings last year.

While this was down from €26 billion in 2021 and almost €30 billion at the height of the pandemic in 2020, it was well ahead of the pre-pandemic era. The savings amassed by Irish households in 2018 and 2019 were €10.2 billion and €11.7 billion.

[ Interest rate rises drive biggest postwar decline in UK household wealth ]

The household saving rate, which measures the proportion of income that is not used in current consumption, was 12.4 per cent in 2022, the CSO said. In 2022, Ireland’s saving rate declined as consumption picked up again after Covid-era restrictions were lifted, it said.

“While Ireland’s saving ratio was below the ratio for the EU as a whole for most of the time, in 2020 and 2021 Ireland’s ratio was above the overall EU’s; this was because incomes in Ireland rose faster than the rest during the pandemic, and also because spending was curbed more in Ireland than in the EU generally,” it said.

The figures also showed that foreign multinationals accounted for 61 per cent of gross domestic product (GDP) last year, up from 51 per cent in 2015.

They also show that multinationals accounted for €37 billion or 30 per cent of wages generated by Irish workers last year.