Bernard Durkan (Kildare North, Fine Gael)
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47. To ask the Minister for Finance the extent to which the level of savings here continues to remain strong; if any fluctuations have occurred; if competing agencies for such savings have emerged; and if he will make a statement on the matter. [46504/14]

Michael Noonan (Limerick City, Fine Gael)
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In economic terms the savings rate is defined as the share of household disposable income which is not devoted to consumption in a given period. The savings rate is usually positive, as households accumulate resources for future consumption.  The savings rate can vary with the economic cycle but also because of larger structural changes in the economy such as population ageing.

Data from the first quarter of 2002 to the first quarter of 2014 are available from the CSO. Although the savings rate tends to fluctuate from quarter to quarter, there has been a jump in the savings rate since the sharp fall in economic activity between 2007 and 2011. Prior to Q4 2007, the household savings rate averaged 8.0 per cent. Between Q1 2008 and Q1 2014 it has averaged 12.4 per cent.

The increase in the savings rate has been driven by several factors:

- The decline in household income in the years following 2008 prompted the behavioural response by households of elevating their level of precautionary savings in response to increased uncertainty surrounding future income levels.

- The second main reason for the increase in the savings rate was the very large decline in household assets. As calculated by the Central Bank of Ireland (CBI), household assets have fallen by a little over a fifth since the end of 2007, largely due to the large decline in house prices. As a result, households have responded by reducing their liabilities. Households became net borrowers in early 2009 and have reduces liabilities by about one eighth since the end of 2007.

- Finally, Ireland's population has begun to age, a process which will continue in the decades ahead and which will drive savings behaviour to smooth consumption over the lifecycle.