Consumers choose spending over savings in December

THERE were conflicting signals on the financial health of Irish households in a series of just-released reports.

According to a Central Statistics Office, disposable income held by all households rose slightly last autumn to just over €23bn, once taxes and other charges levied on incomes were subtracted.

In a separate report issued by Nationwide UK (Ireland), it recorded a significant drop in its savings rates index during the month of December compared to the previous month.

The fall in the savings rates appears to be significant.  It is likely to have been affected by a combination of factors, including rising costs of utilities and services as well as falling interest paid on deposits and a rise in the tax charged on those savings. But there may also be a more benign reason for the sharp decrease.

Savers may also have taken a holiday in December. This is borne out by the significant rise in spending that took many retailers by surprise in the lead-up to Christmas, with many recording their best December in almost 5 years. And while the economy continues to pose significant challenges for household budgets across Ireland, it is hoped that the December period is not an isolated economic blip.

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