Enthusiasm for savings 'waning' as BoI investment index falls to lowest level since launch
Fewer people are saving their extra funds as recent rainy days may be blamed for a shift instead towards spending.
According to the Bank of Ireland, their latest Savings and Investments Index has dropped from 102 points in February 2018 to 98 points last month.
This is the lowest reading for the BoI//ESRI Savings and Investments Index since its launch in October 2017.
Younger people may be more inclined to spend more as a result of improved economic conditions, the figures suggest, with the weaker saving rates seen among the under 50s.
Furthermore, Bank of Ireland has highlighted the adverse weather conditions over the last few weeks as "an opportunity for consumers to indulge in online spending".
Tom McCabe, Bank of Ireland Investment Markets said that, based on the index, Irish peoples’ enthusiasm for saving appears to be waning.
"There could a couple of different catalysts behind this; younger people may be now more inclined to spend as the economy continues to improve and March’s adverse weather could also have reinforced that shift towards spending," he said.
The bank's Savings Index fell by 4 points to 99, its lowest level since September 2017, with the proportion of those savings regularly in March falling to 46pc, the lowest level since July 2017.
The monthly Savings Attitudes Index, which asks people about their saving behaviour and how they feel about the amount they save, dropped to 99 points in March from 103 the previous month.
It was the sentiment of the over 50s group, however, drove the increasing about the current savings environment, as this index decreased by 4 points to 98 in March 2018.
"Greater numbers of over 50s are increasingly expressing the view that now is a bad time to save," said Mr McCabe.
"This group is more likely to have lump sums available for saving. Here perhaps people are growing tired of the low interest rates on offer for savings and are now looking for alternative investment options with the potential for higher returns."
Meanwhile, the monthly Investment Index dropped by 4 points to 97 in March, the largest fall since the index started in October 2017. The Investment Attitudes Index also undid its large February gain by falling 10 points to 94 index points in March.
Volatile stock markets and concerns around a potential global trade war were largely blamed for the weaker Irish investment attitudes.
On a positive note, over half (56pc) of people feel they have some financial plans in place for retirement, the highest response thus far.
The Retirement Optimism Index jumped to 100 points in March 2018 from 92 in January 2018, with 31pc of people believing they could live comfortably in retirement, compared with 24pc in January.