In the final quarter of 2025 the household savings rate was 10.9pc. This was down from 13.7pc in the third quarter, and the lowest rate since the start of 2016, when it was 10.7pc.
Saving in the final quarter of any year tends to be more variable due to additional Christmas spending, while disposable income is reduced by the self-employed making their tax payments.
Even when adjusted for seasonal patterns, however, consumer spending was 2pc higher in the final quarter of last year compared with Q3. Disposable household income was 1pc lower.
Irish households saved a total of €24bn last year, or an average of €2bn per month.
This was the difference between their disposable income of €185bn and consumer spending of €161bn, and amounted to a savings rate of 13pc. It meant that households added more than €1 to their wealth for every €8 of disposable income last year.
While the savings rate was slightly lower than the 13.2pc seen in 2024, it was higher than the 12.7pc average recorded since the start of 2023, according to data released by the Central Statistics Office.
Households can use savings to add to their wealth in the form of real assets, such as buying a house, or financial assets, including putting money on deposit with banks.
Separate figures from the Central Bank show that the amount Irish households deposited in banks rose by €1.6bn in the last quarter. However, loans were also up, by €1.9bn, which meant households borrowed more than they repaid. Contributions to pension funds were up €1bn.
The Consumer Price Index recorded an increase of 2.8pc year-on-year at the end of December, with the most significant increases being in education, up almost 9pc, and clothing and footwear, up 5.7pc.
For the Irish economy as a whole, unadjusted GDP is provisionally estimated at €639bn for last year, over 13pc higher than the year before. More than €200bn of this value added went out of the domestic economy in the form of profits and dividends to multinationals.
GDP was €153bn in the final quarter, which was 1pc higher year-on-year. A large part of that additional value added came from the ICT sector, which is dominated by foreign-owned multinational corporations. This meant most of the extra GDP left the country.
Provisional estimates indicate a large government surplus of €9.5bn in the fourth quarter of 2025, while for the year as a whole it was €12.1bn. Both figures are subject to revision.
Finance Minister Simon Harris is planning to encourage households to invest via a special savings scheme that will be subject to a low rate of tax. The level of the tax-free threshold is to be revealed in Budget 2027 in October.
The savings and investment scheme will reportedly be styled on a Swedish model, where the rate of tax is linked to the yield on government bonds. More than five million people in Sweden have this type of account.