MASSIVE INCREASES IN mortgage repayments for under 50s are driving an increase in the amount of people unable to make regular savings, Nationwide building society has said.
More than forty per cent of Irish people now are unable to put any savings away each month, a new report by Nationwide and the ESRI has found.
The figure for March was 42 per cent, up from 36 per cent in January.
Nationwide chief executive Brendan Synnott said many people who took out fixed rate mortgages five years ago are now being exposed to repayment levels that are up to €900 per month higher than previously.
He said under 50s were being hit particularly hard by the trend.
“It’s a huge drain on the under 50 age group and their ability to save any cash.”
He said that many under 50s would have opted for the fixed rate mortgage when more attractive mortgage products such as trackers were taken off the market around five years ago.
Despite the fact that the increase would have been well flagged, many are struggling to meet higher repayments.
“Even though it’s been in the post, a lot of people weren’t prepared enough.”
Over 50s fare better
The fortunes of the under 50s are in marked contrast to many of those over 50, one third of whom feel they can now save regularly.
Synnott said that over 50s were leading the re-emergence of a sector of regular savers that had been wiped out by the recession.
“The desire to save was strong, but the ability to save wasn’t there. The regular saver had virtually disappeared from the market, but we have seen they’ve made a return, althought they’re not the force they have been in the past.”
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