Saving

Saving

1. Real Disposable Income

   • Households save a higher proportion of income

2. Interest Rate

   • Rise in IR increases reward for saving
   • Target Savers would save less

3. Confidence & Expectations

   • Save more if uncertain about future

4. Range of Banks

   • If banks are trusted and established-easier to save and trust
   • If banks become more developed, saving rates fall. People find it easier to borrow

5. Government Policies

   • Tax-free saving schemes-people save more
   • Raising pensions discourages saving

6. Age Structure of Population

   • Young people save less than middle age people
   • Some elderly disave-spend savings
   • Other elderly save to pay for future medical treatment