Between late 2007 and late 2009 the household savings ratio more than doubled as households went defensive in the face of a severe economic crash. However, with a recovery taking hold from 2012, people gradually became less cautious and savings levels retreated back to pre-crisis levels.

However, data released by the CSO today show that household savings have been rising continually again since late 2014, and total savings increased by 128% in 2015.
According to John McCartney, Director of Research at Savills Ireland, this may be down to tighter mortgage lending.

“Since the start of 2015 new mortgage rules mean that home buyers can borrow less. Therefore they have to save bigger deposits. In this context it is not surprising to see a rise in household savings”.

Given the fact that deposit rates have fallen by 11% in the last year and are at historic lows, McCartney notes that savers are certainly not being attracted by generous returns. Nor are they fleeing into safe havens because of anxiety – GDP growth is currently running at 9.2% per annum – this exceeds the fastest growth that was experienced even during the boom.

“In this context the most likely explanation is that first-time-buyers, and their parents who are increasingly providing financial assistance, are saving more to fund home purchase”.
Central Bank statistics show that household money on deposit in the Irish banks has risen from €92.2bn to almost €95bn over the last 12 months.