Portuguese households' savings are decreasing. The savings rate for households has dropped to 4.0% of the disposable income during the third trimester of the year, the lowest value in 20 years.
Portuguese families savings are shrinking every day. The household savings rate dropped to 4.0% of the disposable income in the third trimester, and that was the lowest value registered over the last 20 years, according to the Office for National Statistics (INE).
“As observed, the savings rate has dropped to 4.0% of the disposable income (a fall of 0.5% in comparison to the previous trimester), and this is mostly due to the fact that the increase in income did not compensate for the consumption expenses attached to households”, the statistics office shows.
“A not so relevant increase in disposable income was influenced by an increase of 3.3% in taxes on income during the third trimester of 2017, and the income received had a surplus which was identical to that of the previous year (1.1%)”, INE adds.
INE noted as well that taxes on income, paid by families, suffered “some disruption during the third trimester of the two last years due to, mostly, the different needs in terms of IRS return, which thereafter affect each particular case in the first and second trimesters of the year”.
Portuguese families save up to 4 euros for every 100 euros earned
After doing the maths, this is what the Portuguese families can save for every 100 euros. The savings rate reached 3.96% in the third trimester, below that of last year, which stood at 3.98%, and this is the lowest value recorded since 1999, the year when this series of INE records started.
On the occasion of the International Savings day, Mourinho Félix, Secretary of State for Finance, said that the government was wary of the low level of savings in Portugal, noting that “it leaves families much more vulnerable if a rainy day comes — be it on the event there is a reduction of income, unemployment, sickness or retirement age, or even in the case there is an unexpected increase in expenditure”.
“We would obviously like it if the savings rate was higher,” Mourinho Félix told ECO then, “but the current level of savings also shows that the accumulation of years of austerity and the loss of income for families has completely disrupted their ability to save money.”