Institutional Sector Accounts Non-Financial and Financial 2015

In overall terms household actual gross disposable income increased from €92.7bn in 2014 to €97.8bn in 2015, an increase of €5.1bn. At the same time household final expenditure on goods and services increased by €4.7bn, from €82.6bn in 2014 to €87.3bn in 2015. As a result the gross saving of households (B.8g) grew from €10.1bn in 2014 to €10.5bn in 2015. Expressed as a percentage of actual gross disposable income the corresponding gross saving ratio was 10.9 per cent in 2014 and 10.7 per cent in 2015.

Figure 2 shows actual gross disposable income, final expenditure on goods and services and the saving ratio for the household sector for the period 2005 - 2015. Also included in Figure 2 is the EU saving ratio. The EU saving ratio declined from 10.3 per cent in 2014 to 10.1 per cent in 2015.

Household debt
The balance sheet position in relation to household debt (Table 3 Liabilities – AF.4 Loans) continued to decline from €159bn in 2014 to €150bn in 2015, reflecting the continued trend in household debt deleveraging. The resulting household debt to income ratio, which measures the sustainability of household debt, decreased from 172 per cent in 2014 to 153 per cent in 2015. 

Figure 3 charts the movement in these series for the period 2005 to 2015.

Use of household saving
Household saving peaked at €13.4bn in 2009 and amounted to €10.5bn in 2015. 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 (GCF) of households (P.5). The transactions in loans are predominantly related 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 household investment in property has fallen to levels that can be financed by household saving without having recourse to borrowing. In fact the gross capital formation of households fell from a high of €25.9bn in 2006 to a low of €5.4bn in 2012, ultimately rising to €7.4bn in 2015. Repayment of loans amounting to €5bn, also known as deleveraging, continued to be a major use of household saving in 2015. Disposals of shares by households in 2015 amounted to €10bn. The use of household saving to fund deposits (Table 2 – Assets F.2) and investment in insurance and pension funds (Table 2 – Assets F.6), together amounting to €10bn in 2015, is also apparent from the graph.