In the Republic, households managed to increase their savings by €16.8 billion in 2023, in contrast to a slightly higher €17.6 billion the year before. Around the peak of the pandemic in 2020, almost €30 billion was saved by households through reducing spending on things like transportation, catering, holidays, and childcare. Since that time, savings rates have reverted to pre-pandemic figures.
However, as a result of inflation making the rate of spending outpace incomes, the savings rate, or the percentage of disposable income reserved, decreased from 12 per cent in 2022 to 11 per cent in 2023, according to the Central Statistics Office (CSO).
Savings acquired by households bolster their wealth through avenues such as real estate acquisitions, financial deposits, or repayment of obligations such as mortgage liabilities. In the last quarter, without considering factors such as inflation or seasonal adjustments, households managed to save €207 million.
Despite the minimal drop from 10.47 per cent to 10.19 per cent in the quarterly savings rate, the CSO highlighted that the rate remained fairly steady for the third successive quarter with a decline. This trend could suggest the intensifying strain on household resources due to rising costs.
The CSO noted that slower income growth, attributed to inflation, was occurring, a shift from pre-pandemic times. Nonetheless, even accounting for inflation, household incomes at the end of 2023 were higher compared to the beginning of the year. This was partly due to an increase in employment. The previous year saw a record number of 2.71 million people gainfully employed in the State.
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