Figures from the CSO show how far household income has fallen due to high inflation in Ireland.

The proportion of disposable income saved by households fell from 20% in the second quarter to 19% in the third quarter, but household savings still remain well above the long-term average.

Prior to Covid, households saved around 10% of their disposable income, according to the Central Statistics Office (CSO).

Households have generally decided not to wind down their lockdown savings, but rather to continue to add to wealth.

Investment in dwellings, most of which is by households, grew again this quarter to €3.5bn and is at its highest level since 2008.

In Association with

Households also paid off €200m in loans rather than take out new ones, and added €2.4bn to their €145bn deposits in banks.

The standard of living, or real total disposable income, for Irish households has now declined for three of the past four quarters since the 24-year high measured in the third quarter of 2021.

Household disposable income fell from €33.1bn in July to €32.9bn in September, or more than €600m from €33.5bn last July.

"Household income declined slightly in real terms (constant prices) in this quarter owing to inflation. Total Disposable Income (TDI) adjusted for inflation and seasonal factors was down 0.8% on the previous quarter," said Peter Culhane, statistician in the national accounts analysis and globalisation division at the CSO. 

"This real household TDI peaked in 2021-Q3, when it reached its highest point since the series started in 1999-Q1. Current price income (or nominal income, that is, without taking account of how inflation reduces purchasing power) has been rising steadily as more people are in work and the average wage is going up.

"However, real income has declined in three of the last four quarters as price increases have out-paced incomes."

Taking inflation into account, household income fell 0.8% between July and September despite household earnings rising due to a greater number of people in work. Inflation outpaced employment growth though, reducing real income.

Household consumption grew, only partially due to high inflation, but also due to more goods and services being used.

Employees in public administration, education and health saw €150m added to their compensation in Q3, the largest increase ahead of distribution, transport hotels and restaurants (€75m), professional, administration and support services (€52m) and finance and insurance (€43m).

Conversely, people working in industry, excluding construction, lost around €35m from the previous quarter, one of three sectors to see their wealth decline, along with arts and entertainment and real estate (both -€1m).

(Pic: Getty Images)