New Research Analyses Household Savings Patterns and Behaviour Post-Financial Crisis

13 October 2016 Press Release
  • 60 per cent of Irish households saving at least occasionally as a precaution
  • Highly indebted and credit-constrained households save to pay down debts
  • Irish households more likely to have negative savings (spend more than their income) and to leave bills unpaid than other euro area countries

The Central Bank of Ireland has published a new Economic Letter by Julia Le Blanc providing an overview of savings motives and behaviours of Irish households after the financial crisis.

The author explains household savings rate in Ireland fell to a record low in 2007 ahead of the financial crisis and increased to more than 14 per cent of income at the height of the crisis in 2009.  She looks at the patterns for household saving behaviour, drawing on data from the euro area household finance and consumption survey.  The Letter finds the most commonly reported motive is precautionary saving, with saving for education and the support of children coming second.

Le Blanc finds around 60 per cent of households are saving at least occasionally as they accumulate assets mostly as a buffer against future unexpected events.  Households with low net wealth and credit-constrained households save to pay down debts and to repair household balance sheets, with some evidence that some households might have difficulty coping with future volatility in income due to levels of household indebtedness.

It highlights financially fragile households, who spend more than their income or more than what their typical expenses would predict, referred to as ‘negative saving’.  In 2013, Irish households are more likely to have negative savings and to leave bills unpaid, making them more vulnerable to idiosyncratic and economic shock.

The views expressed in this paper are those of the author only and do not necessarily reflect the views of the Central Bank of Ireland.


The paper uses the gross saving rate of households which is defined as gross saving divided by gross disposable income.  Gross saving is the part of gross domestic income which is not spent as final consumption expenditure.