PERSONAL SAVINGS – ANNUAL
2002 - 2012 Current
Net Personal Savings as a % Disposable Income 12%
11% 10%
10%
9%
9.5%
8% 6% 6% 4% 2% 2%
0%
0% -2%
2002
1% -1% 2003
2004
2005
-1%
0%
2006
2007
2008
2009
2010
2011
2012
The level of net personal saving in Ireland increased dramatically over the past five years, from a low of -1% of disposable income in 2006 to a high of 11% in 20129. The average for the past decade has been 3.5%. The savings ratio continued to rise in 2012, estimated to be as high as 11% for the year as a whole. The longer-term net savings ratio consistent with economic recovery for Ireland should be in the range of 5-7%. The savings ratio is not expected to reduce much in the next few years as consumers prioritise repaying personal loans and mortgage debt over current spending. In fact, over 80% of this saving represents repayment of loans 10. Despite the increase in savings, the net worth of Irish households (the difference between total assets and liabilities) fell by -38% from its peak value at Q2 2007 to the end of 201111. Significantly, Q2 2012 saw the first rise in the net worth of Irish households since Q1 2008. At the end of December 2012, the net worth of Irish households stood at €462 billion, or €100,674 per capita12. The UK savings ratio declined from the mid-1990s until 2008 when it reached 2.0%. It rose again following the financial crisis and reached a peak of 8.4% in Q3 2009 but has since fallen back to a more normal level of 6.6% in 201214. The US Personal Saving Rate is currently at 6.5%, just slightly lower than the longterm average of 6.9%15.
9
CSO Quarterly Institutional Sector Accounts. Central Bank of Ireland Central Bank Quarterly Economic Bulletin, Quarter 3, 2012.
10 11
12 14
Central bank Quarterly Financial Accounts
Office of National Statistics US Department of Commerce UCD Marketing Development Programme ©2012 15