Household savings rate increases to 14.7%

The savings rate among households increased to 14.7% between January and March.

New data from the Central Statistics Offices shows that households saved €8.1bn during the three month period, before adjusting for seasonality or inflation.

The CSO noted that the first quarter of the year tends to have higher savings, as consumption is lower after Christmas and bonuses are often paid in this quarter.

The savings rate dropped at the end of 2022, but has been generally stable or increasing since then.

Today’s figures show that income and consumption both rose in the first three months of the year.

Households’ incomes rose more than their consumption, leading to a rise in savings.

Unadjusted, total disposable income of households was €42bn, compared to €38bn in the first quarter of last year.

Household consumption was €34bn between January and March, up from €32bn during the same time last year.

The CSO said these estimates are subject to revision as data from the Annual National Accounts becomes available in the next few weeks.

“Today’s data supports the contention that we are a nation of thrifty savers,” said Paul Roche CEO of Teachers Union of Ireland Credit Union.

With Irish mortgage rates likely to drop as ECB rates begin to fall, it’s likely that we’ll see an even greater uptick in savings, as some households might find themselves in the fortunate position to set aside a little more for a rainy day – a laudable and prudent move,” he added.