02 Oct 2022

SURGE: Savings jumped massively during pandemic lockdown

SURGE: Savings jumped massively during pandemic lockdown

Irish people who remained in employment during the pandemic saved €31bn last year, figures from the Central Statistics Office show. 

This has seen financial net worth reach an all-time high of €312.8bn, the Central Statistics Office figures show.

The jump in savings brought the amount of money householders retain in banks and credit unions to a record €139bn.

According to the CSO: "In 2020, the saving rate went up because overall incomes held steady while expenditure declined sharply.

"When income declines but final consumption expenditure (FCE) declines faster, then the saving rate will also go up, and this happened in Ireland in 2009 as the recession hit and uncertainty led to 'precautionary saving' as people reduced their spending faster than their incomes declined".

If income goes down but FCE stays the same then the Saving Rate will decline.

"This happened in Ireland when the domestic economy was contracting between 2009 and 2013 as people had less spare for saving. If income increases faster than FCE then the Saving Rate will go up, and this happened in Ireland between 2014 and 2019 as Ireland came out of recession," the CSO said.

"As for gross saving, a high Household Saving Rate indicates households are making money available for capital investment, which is a positive indicator for long term growth in the economy as a whole," the CSO said. 

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