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Households and Non-profit institutions serving households (S.14 + S.15)

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Household saving
Gross disposable income of households (B.6g) and the adjustment for the change in pension entitlements (D.8) together comprise actual gross disposable income of households. The growth rate of actual disposable income is illustrated by the line graph in Figure 1 below. The contributions to this trend by the various components of actual gross disposable income are illustrated in the bar charts. The significance of compensation of employees (COE) and net social benefits in explaining both the negative trend at the time of the financial crisis and subsequent recovery in recent years can be seen.

COENet property inc , Adj in pension entitlements and other curr transfersGross disposable income Gross operating surplusNet Soc benefitsCurrent taxes
20058.21116356421664-0.7349537797090999.996360788334662.29537379859511.06278112701612-1.69397655006888
20067.59304049223434-0.583923821985467.980428038941791.884388262649190.795783549718459-2.26854016697786
20077.25737720910481-1.695562268514788.821518975669493.028246874591230.734950806012409-1.14954969788051
20082.21851204044564-0.736807500407865.989333614050980.3830242000151572.375943587624851.41057034304875
2009-7.780262967903590.371010257111144-7.96778370554884-6.479432358382384.059346524899661.27197016274061
2010-5.53200038816344-0.385246612734762-4.45725731177938-0.1582632744765040.7420242567769150.698732245196753
20110.687688748123116-1.34232771192997-3.18991318667795-0.206766970106992-0.686819430843124-1.72732163187966
20120.04312129050673912.747566586387063.006364054255120.3870159218341581.10471366104865-1.36909533630399
20132.40037294109314-1.4620547690661-0.4242532495694810.474709790367593-1.45532123816479-0.38427220466342
20142.752398480802212.50131420614834.044986624500391.93479702118289-1.53785472494248-1.73981541241324
20154.42024563572853-0.03746248349803885.619655745899972.19967017560216-0.536131614816442-0.700368379437177

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.

PCEGDISaving Ratio (right axis)EU Saving Ratio (right axis)
200574.674713816286579.58207938288469.0032760434518211.4
200681.673158072055985.76261974849187.6380811074155610.93
200789.722145677945892.93861628040476.5642209334844810.73
200891.165174919108498.501978627146310.26348028432210.78
200980.374817916732591.223365827458814.299528576223412.89
201078.785468528467387.460201927750412.199306423708911.94
201178.725572982717884.93800553227389.458786676695611.26
201278.961712663220187.568665723107211.775750471076110.86
201379.940264941347287.148597177108510.309879193122110.89
201482.56592011901690.399498447164810.898269790812610.28
201587.260229269800695.254221261909510.73763717446310.13

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.

DebtGDIDebt to Income Ratio (right axis)
2005140.55661068142282.0630793828846171.278742813954
2006169.25667657697988.4273075433184191.407701172021
2007194.31375563539896.0254696587632202.356475137182
2008202.719281384493101.59205550645199.542454746003
2009197.70779979843893.7857360425598210.807963066706
2010184.88185955436489.7321710334892206.037430527969
2011178.83669691044986.9499867442738205.677658625091
2012173.668574673689.5011440560148194.040619821472
2013168.57439206873589.1293982237752189.134444333955
2014158.93833623165592.6647775808314171.519686747225
2015149.57835327086597.7570237977572153.010338756136

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.

GCFNet Capital TransfersShares Loans less depositsInsurance and PensionsGross Saving
200522.85516466411020.03756940147642132.40365982823255-19.98607463332523.333637450617.38836556659809
200625.8848637122057-0.00559195034151749-0.272348022191843-16.58132935564523.709137484916.75414947126246
200723.1872239453269-0.0260597636468789-2.03245716290108-18.3008608261434.042623666516.30332398081732
200817.23234862738890.180449575896915-2.92997076571735-3.801408200368762.9499759161110.426880587342
20098.857691057414180.349763583588133-6.074950254642627.275084990328752.8127741512413.4109181258273
20106.123282734286180.320971599257239-9.3857391862423610.36653278304983.118543266210.9467025050219
20115.582411140036380.172520628037581-4.137620971735987.124408465338043.10385540938.22441376155596
20125.448417238460150.175721315768387-8.164853894475218.456011088857992.5149956381681310.5394313927947
20135.655104437958790.170484271758472-2.728746073414354.844941155765022.117558743308219.18913328242794
20146.476486561192890.130401563932359-5.988602897084638.237011263211752.949524572507710.0988574618155
20157.388535393806670.241005155742007-9.6931966705463111.51356973792083.3687102795152410.4967945279566

1It is important to make the distinction between balance sheet measures of household debt i.e. the outstanding stock of loans illustrated in Figure 3 and transactions in loans i.e. increases (+) or decreases (-) included in Figure 4.

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