The gross disposable income of households was nearly €22bn in Q1 2012 – an increase of €771m or 3.6% compared with the same quarter of 2011, latest figures from the CSO show.
Higher wages (+€170m) and profits of the self employed (+€365m) along with lower interest payments (-€272m) were the main factors which contributed to the increase in household disposable income over this period, it said.
But there was little change in household expenditure between the first quarter of 2012 and the corresponding quarter of 2011 (€19.4bn compared with €19.37bn).
As a result, gross household savings increased from €2.4bn in Q1 2011 to €3.2bn in Q1 2012.
The derived gross savings ratio, which expresses savings as a percentage of gross disposable income, increased from 11.2% in Q1 2011 to 14.2% in Q1 2012.
This will come as bad news for the retail sector. While it seems there is more disposable income out there, more and more people are choosing to save that money instead of spending. Those figures may rise as the budget looms at the tail end of this year.