Institutional Sector Accounts Non-Financial and Financial 2013

In overall terms household actual gross disposable income increased from €89.2bn in 2012 to €90.2bn in 2013.  Household final expenditure on goods and services also increased from €77.7bn in 2012 to €78.7bn in 2013. As a result the gross saving of households (B.8g) was practically unchanged from €11.5bn in 2012 to €11.4bn in 2013. Expressed as a percentage of actual gross disposable income the corresponding gross saving ratio was 12.9 per cent in 2012 and 12.7 per cent in 2013.

Figure 2 shows actual gross disposable income, final expenditure on goods and services and the saving ratio for the household sector for the period 2003 - 2013. Also included in Figure 2 is the EU saving ratio. Similar to the recent trend in Irish saving, the EU saving ratio of 11 per cent is unchanged between 2012 and 2013.

Household debt

The balance sheet position in relation to household debt (Table 3b Liabilities – AF.4 Loans) declined from €170bn in 2012 to €168bn in 2013. The resulting household debt to income ratio, which measures the sustainability of household debt, decreased from 190 per cent in 2012 to 186 per cent in 2013. 

Figure 3 charts the movement in these series for the period 2003 to 2013.

Use of household saving

Household saving peaked at €15.9bn in 2009 and has since fallen back to €11.4bn in 2013.  How households have been using their saving is illustrated in Figure 4 below. The line graph is the trend in actual gross household saving while the bar chart illustrates transactions in investment and borrowing by households¹.

During the entire period there is a clear link between transactions in loans (Liabilities F.4) and transactions in gross capital formation (GFCF) of households (P.5). The transactions in loans relate predominantly to borrowing to fund investment in property while the capital formation relates to the property investments themselves.

Since 2009 households have not been borrowing, in net terms.  At the same time investment in property has fallen to levels that can be financed by the saving of the sector without having recourse to borrowing. In fact the gross capital formation of households fell from a high of €25.6bn in 2006 to €5.2bn in 2013. Repayment of loans or deleveraging, amounting to €6.5bn, continued to be a major use of household saving in 2013 as has disposals of shares that amounted to €4.5bn in 2013. The use of household saving to fund deposits (Table 2a – Assets F.2) and investment in insurance and pension funds (Table 2a – Assets F.6) is also apparent from the graph.