Savings by households in Ireland reach a record €125 billion
Daragh Cassidy
Head Writer

The surge in savings has occurred as lockdown has reduced consumers' ability to spend.

Latest figures from the Central Bank show that Irish households now have a record €125 billion on deposit with banks and credit unions in Ireland.

The figure is up a staggering €14.2 billion over the past 12 months and increased by almost €1 billion between November and December of last year alone. 

However the vast majority of this money is earning practically nothing in interest. 

Last year was also marked by a significant contraction in consumer borrowing, with people's loan repayments exceeding new borrowing by €580 million. The decline in borrowing would have been even bigger were it not for payment breaks introduced during the year which allowed some people to stop making repayments on their personal loans and mortgages for a period of time. 

Why are savings so high?

If you were to follow the news on a daily basis you could be forgiven for thinking that everyone in Ireland is destitute and poor. 

However by many metrics Ireland is a wealthy and successful country and many households, as the figures show, have excess money at the end of each month. In fact the figure of €125 billion doesn't even include the billions also being saved in State savings schemes. 

However one might have expected that savings would have fallen due to the Covid pandemic and the resultant increase in unemployment.

But there are a few reasons why this hasn’t been the case.  

Firstly, through initiatives like the PUP and the wage subsidy scheme, people’s incomes have been protected to a higher degree than would usually be the case. For example the PUP payment of €350 compares to a maximum payment of just €203 for the dole.

This means some people who have found themselves off work may not have had to raid the piggy bank as much as one might have expected.

Secondly, while most of the media attention has been on job losses, many workers in areas such as the public sector and the pharmaceutical, IT, insurance and finance industries haven’t been impacted financially at all. 

In fact wages in many of these sectors even increased in 2020. So with people's wages going up, but summer holidays off the agenda and not many shops open for you to spend, people have turned to saving their money instead.

The final point is that new working from home arrangements have allowed many workers to move out of their expensive city centre apartments and work from much cheaper areas closer to home.

What should I be doing with my savings?

Most deposit accounts now offer pretty much zero interest.

So if you have excess savings, you should be looking for other places to put it. 

Topping up your pension, investing in a managed fund, and paying off your credit card debt are some of the better ways you could use your savings, and we delved into this in more detail in a recent article which you can read more about here. 

We also discussed alternative saving options in an episode of our podcast series, which you can listen to here.


With the latest lockdown set to last until March at least, it looks like savings rates are going to continue to rise in the short term at least.

The question of course is what will happen when all these savings eventually start to be spent?

In its recent quarterly bulletin, the Central Bank says it expects economic activity in Ireland to remain weak in the first half of this year, with a recovery starting in the second half of the year assuming widespread vaccine deployment.

However it expects the recovery to pick up big momentum in 2022 supported by improving business and consumer confidence and the high level of savings in the economy.

The other impact is on the housing market.

The CSO estimates we need around 30,000 to 35,000 new homes built each year to keep up with demand. However over the past few years only 20,000 or so homes have come onto the market each year. And this lack of supply has been a main reason why prices continue to go up.

Unfortunately Covid has led to a contraction in house building as work has had to stop on many housing schemes around the country, meaning we're even further away from reaching our building target. 

This lack of supply, coupled with huge pent-up savings, could mean further increases in property prices over the coming years.

The outlook for savings rates is also extremely poor for the foreseeable future.

With ECB lending rates now at 0% and banks now actually being charged by the ECB for placing money on deposit with them, there is a fear that banks and credit unions will eventually have to start charging people for looking after their savings. Particularly if the level of savings by households remains so high.

Already many credit unions (which usually place their members' savings on deposit with banks) have started restricting the amount of money people can save with them.

Compare banking options on

You can easily compare savings accounts and other banking products on 

Use our savings account comparison service today to quickly compare the different account features and interest rates from all of Ireland’s providers. You could find the best return for your savings in seconds!

If you’re in the market for a new current account, you can use our current account comparison service to review charges and fees in just a few clicks. 

To learn more about various current accounts on offer, why not have a look at our blog on which bank has the best value current account at the moment?

Check out our banking and personal finance comparison page to see how you can lower your everyday banking costs.

Let's hear from you

Have you seen your level of savings increase over lockdown? Or are you one of the people whose spending has actually increased!? And what do you plan to do with any new savings you have?

Get in touch and let us know. You can contact us on Facebook, Twitter or Instagram.