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Irish people becoming more optimistic about retirement

Written by Robert McHugh, on 11th Jun 2018. Posted in Financial

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Bank of Ireland has today released its latest Retirement Optimism Index in conjuction with ESRI. The Index tracks household attitudes towards savings and investment as well as monitoring their perspectives on the current and future savings and investment environment.

It is produced monthly from a minimum sample of 800 consumers aged 15 years and above. The ESRI carries out the Savings and Investment Index research to ensure the indices represent a national sample.
 
May’s results also showed a rise in the number of people that felt they could live comfortably in retirement from a financial perspective. Overall one-third of people felt that it would be easy to live comfortably in retirement and again this increase was led by the under 50s. Thirty one percent of under 50s felt they could live comfortably in retirement, slightly lower than the 34% response for over 50s.
 
The monthly Savings Index increased to 104 in May from 103 in April driven by a slight rise in the Savings Attitudes sub-index. Saving patterns remained strong in May with 51% of people saying they saved regularly and another 18% answering that they saved occasionally. Regular savings patterns remained particularly strong amongst the under 50s with 57% of this group answering that they regularly put money away.

In the Savings Environment sub-index 42% of people felt it was a good time to save in May, up from 39% in April. However there was a marked divergence in views on this across the age groups. Only 35% of over 50s felt it was a good time to save, a full 11% lower than the response from under 50s. This likely reflects continued dissatisfaction among older lump sum savers with the returns on offer from deposits.
 
After rising considerably in April, peoples’ views on the investment environment weakened again in May. The spectre of rising political instability in Italy and Spain, the US exit from the Iran nuclear deal and continued concerns about a global trade war all seemed to weigh on investor sentiment in the month.
 
The percentage of people that saw it as a good time to invest slipped to 30% in May compared to 34% in the previous month. However a larger percentage (34%) felt it would be a better time to invest in six months time, suggesting that Irish people feel that these geopolitical and trade threats should fade in time.
 
Commenting on the findings, Bank of Ireland Investment Markets, Tom McCabe said, "May’s Retirement Optimism Index showed a greater degree of confidence amongst Irish people around retirement planning. The results may be the first evidence that improving household finances are allowing Irish people turn their attention to longer term retirement planning issues now, in much the same way as they have boosted shorter term savings in recent years."

He added, "The improvement in confidence among under 50s is particularly encouraging. However the proportion of this group with some retirement planning in place was still less than 50% and ideally this number should be higher. Without a doubt younger people have the unenviable task of juggling numerous competing financial goals of which retirement planning is just one. However, where possible they need to stay focused on this particular goal in order to secure a reasonable income in retirement."

Source: www.businessworld.ie

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