Saving for a rainy day?
Official figures also show savings going up since the latest financial crisis. ING senior economist Ian Bright blogged about the household saving ratios of 26 developed countries – and found the ratio rose in 16 of them between 2007 and 2012. Norway, Australia and New Zealand were the fastest risers.
Watch out for the paradox of thrift
Exactly why people are saving more is not entirely clear, but Bright blogged that unease about job security might play a part. Also, if mortgagees have a particularly low interest rate, they might make the most by paying off the debt more quickly (which economists consider to be increasing savings). There will be other reasons as well.
But watch out – saving more can lead to trouble if everyone is doing it. Known as the paradox of thrift, everyone saving at once can lower economic growth and be bad for the finances of the economy in general.