The latest Bank of Ireland/ESRI Savings and Investments Index has been released today. The Index tracks household attitudes towards savings and investment as well as monitoring their perspectives on the current and future savings and investment environment.
The Index remained flat at 102 in January 2018. Despite the lack of change in the headline index in January, a notable theme was the stark contrast between Irish people’s attitudes towards saving and investment and their view of the saving and investment environment.
Nearly one-third (30%) of people were investing regularly in January, down from 34% in December. Similar to the savings attitudes index, Irish people also felt they weren’t investing as much as they’d like in January with 39% feeling they didn’t invest as much as they should.
Thirty nine percent of people felt it was a good time to invest now, the strongest response since the Investment Environment Index began in October. Confidence around investment markets was clearly high in January, probably reflecting increased optimism about the world economy and the strong world stock market performance in the month.
Bank of Ireland believes the fall in saving and investment attitudes was probably the most notable move in the January findings. Tighter budgets in the post-Christmas period could have been a factor but such a decline is unusual for savings. Bank of Ireland say the fact that people don’t believe they are saving or investing enough could be linked to increased uncertainty about their future finances and whether the returns from savings are enough.
This uncertainty also seemed much more prevalent amongst younger people. For example, 58% of the under 50s felt they weren’t saving enough in January while 47% felt they weren’t investing enough – this compared with 39% and 29% respectively when the question was answered by over 50s.
Consumers were also asked about their top New Year financial resolution for 2018, with most respondents (41%) saying they would like to save more money, over one-fifth (23%) aiming to spend less money, 12% to pay off debt and one in ten of consumers aiming to develop a long term plan to meet financial goals.
Commenting on the Bank of Ireland Savings and investments Index, Tom McCabe of Bank of Ireland Investment Markets said, "The Bank of Ireland/ESRI Saving and Investment Index was unmoved in January 2018. However the most striking insight was that Irish people felt they weren’t saving or investing enough, a theme also visible in the questions on Retirement planning."
He added, "This could reflect uncertainty about peoples’ future finances and whether they feel the returns from savings are enough to meet their financial objectives, underlining the importance of having a long term financial plan."