A new report from Bank of Ireland has found that almost half of Irish consumers (49%) see it as a good time to save which compares to 42% in November 2019.
However, this number is lower than it was in May of this year (55%) suggesting that while lockdowns have enforced a reduced level of expenditure, consumer attitudes to saving have not been quite as pronounced in the second lockdown, or Christmas spending had started in earnest.
The information was collected as part of the latest Bank of Ireland Savings and Investment Index which is produced quarterly from a nationally representative sample of 1,000 consumers aged 16 years and above. The fieldwork is conducted by Ipsos MRBI, an independent research agency. The fourth quarter fieldwork took place from 1st – 14th November.
When it comes to investing, more than half of respondents (54%) believe they are investing enough (this includes pension funds), a result which is very similar to November 2019 at 53%. Twenty eight percent see it as a good time to invest which is up from 25% at the same time last year.
Interestingly, a higher number of people (34%) predict six months’ time as a good or very good time to invest, perhaps reflecting forward looking positivity as Ireland emerges further from the pandemic. This result suggests two factors are influencing how consumers view their savings and investing habits.
It appears that consumers are very gradually giving more consideration to investing, with interest rates looking like they will remain low for many years to come. Secondly, Bank of Ireland say it is likely there has been some influence from the very strong returns in investment markets, especially in November which was a record month for returns in stock markets.
Optimism about retirement has been one of the surprise findings in our survey. During the first lockdown, there was a marked increase in optimism about retirement (to 120). In August, this dropped to 110. This time, as the second lockdown was in place the index once again recorded an increase in Optimism about retirement (to 116).
Commenting on the index, Chief Investment Strategist at Bank of Ireland Investment Markets, Kevin Quinn said, "Facing into a second lockdown we saw a resurgence in attitudes to savings and a noticeable bounce in consumer optimism about retirement, trends which also featured during the first lockdown, albeit slightly less pronounced this time. While the increase in savings is very understandable and may simply reflect the impact of retail being partially closed, the rise in optimism about retirement is a more confusing shift – particularly as we see significant evidence suggesting under-provisioning for retirement remains a problem for many."
He added, "In addition we are seeing a modest shift in attitudes to investing. Our sense of this is that consumers are recognising that an environment of super low interest rates is likely perhaps for many years and attention is turning to optimising their capital in the longer term. Some are turning attention to investing and recent strong equity market performances may be having some bearing on this."
Source: www.businessworld.ie
