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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 1.1 below. In 2016 household income continued to increase at a rate of around 5%. 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 employment (COE) to this trend can be seen.

COENet Property Income, Adj in Pension Entitlements and other Current TransfersActual GDISelf-Employed IncomeNet Soc BenefitsCurrent Taxes

Overall, household actual gross disposable income increased from €91.50bn in 2015 to €95.14bn in 2016, an increase of €3.64bn. At the same time household final expenditure on goods and services (P.3) increased by €3.54bn from €85.22bn in 2015 to €88.75bn in 2016. As a result the gross saving of households (B.8g) grew modestly from €6.28bn in 2015 to €6.39bn in 2016. Expressed as a percentage of actual gross disposable income the corresponding gross saving ratio was 6.9% in 2015 and 6.7% in 2016. Figure 1.2 shows actual gross disposable income, final expenditure on goods and services and the saving ratio for the household sector for the period 2010 – 2016. There is a clear upward trend in both income and expenditure since 2012, with a corresponding decrease in the saving ratio. Also included in Figure 1.2 is the EU saving ratio. Both the Irish and EU ratios were 10.9% in 2012, but while the Irish rate declined to 6.7%, the EU saving ratio declined much less steeply to 10.3% in 2016.

Actual GDIPersonal Consumption ExpenditureSaving Ratio (right axis)EU Saving Ratio (right axis)

Household and NPISH Debt

The balance sheet position in relation to household and NPISH debt (Table 2.4 – AF.4 Loans) continued to decrease from €150bn in 2015 to €143bn in 2016. The resulting debt to income ratio for this sector, which measures the sustainability of household debt, decreased from a high of 212% in 2009 to 147% in 2016.

Figure 1.3 charts the movement in these series for the period 2006 to 2016.

DebtActual GDIDebt to Income Ratio (right axis)

Use of Household and NPISH Saving

Gross household and NPISH saving (B.8g) peaked at €12.0bn in 2009 and declined to €6.5bn in 2016. How households have been using their saving is illustrated in Figure 1.4 below. The line graph is the trend in actual gross household and NPISH saving while the bar chart illustrates transactions in investment and borrowing by households and NPISH1.

Since 2009 households' loan liabilities have been decreasing after the years of high borrowing to fund capital investment in dwellings. Household investment in fixed capital formation has fallen to levels that can be financed by collective saving without having recourse to borrowing. Gross capital formation stood at €8.0bn in 2016, its highest since 2009 (but well below the 2006 peak of €25.9bn). Repayment of loans (or deleveraging), amounting to €2.7bn in 2016, continued to be a major use of saving as has disposals of listed and unlisted shares that amounted to €6.2bn in the latest year. The use of household and NPISH saving to fund deposits (Table 2.1 – Assets F.2) and investment in insurance and pension funds (Table 2.1 – Assets F.6) is also apparent from the graph.

Gross Fixed Capital FormationSharesDepositsLoansInsurance & PensionsGross Saving

Non-Profit Institutions Serving Households

Households (S.14) and non-profit institutions serving households (NPISH, S.15) are usually presented in a combined account (S.1M = S.14 + S.15). The sectors are now given separately in this non-financial account, thanks largely to the analytical detail available from the Benefacts database.2 About 2% of the income and expenditure of the combined S.1M account is NPISH. The institutions in the NPISH sector get most of their income as transfers from households (for example donations, church collections, union dues or members' subscriptions) and also receive transfers from government.3 They also earn profits on their market activities, such as charity shops and match tickets. Relatively little of their income is from investments. Their income is spent on final consumption expenditure and compensation of employees in a roughly 3:1 ratio. There are over 55,000 people in direct paid employment in the NPISH sector. As their income is almost all returned to households, there is relatively little net difference in saving between S.1M and S.14 on its own. The main items of NPISH income and expenditure is illustrated in the bar chart in Figure 1.5. The line graph represents the gross saving of the sector.

S.14 TransfersS.13 TransfersGVAFinal ConsumptionWagesB.8g

1It is important to make the distinction between balance sheet measures of household debt, i.e. the outstanding stock of loans illustrated in Figure 1.3 and transactions in loans, i.e. increases (+) or decreases (-) included in Figure 1.4.

2Benefacts is a non-governmental organisation that provides information about the non-profit sector in Ireland. See

3Many charities, such as hospitals and social care providers, which receive most of their funding from government and which provide services under contract with government, are treated as part of the government sector (S.13) in national accounts, and not S.15.

Go to the next chapter: Non-Financial Corporations