Wednesday 20 November 2019

Quarter of all Irish wealth held in cash deposit accounts - Irish Life survey

Deposit rates are at historic lows
Deposit rates are at historic lows
Gavin McLoughlin

Gavin McLoughlin

Irish people have a comparatively high preference for saving money in deposit accounts, but almost half say don’t know the typical rate of return, research commissioned by Irish Life indicates.

A quarter of Irish wealth is held in cash deposits, three times as much as in Canada and twice as much as in the UK.

A further three in ten respondents to the Irish Life survey guessed wrongly when asked what the typical rate of return is.

Deposit rates are at historic lows as the European Central Bank seeks to encourage lending in the flagging European economy.

But despite the low rates of return, Irish consumers appear to prefer the emotional comfort of their money being secure.

“We’d like to see more consumers starting to become more aware of the full range of savings and investment options open to them,” managing director of Irish Life’s retail business Gerry Hassett said.

Almost two thirds of the consumers who responded to the survey said they were cautious or risk-averse.

“You compare us to the UK or Canada, they are more mature countries in a way,” Irish Life’s corporate business managing director David Harney said.

“A lot of our wealth has been in the last 50 years or so and I think initially what people did as they built up money was to have it in banks. Property was the next thing to have visibility, so people have just been naturally attracted to that.

“We’re still on a journey. What never got developed in Ireland was the mutual fund market...that’s definitely going to happen here.”

Irish Life chief executive Bill Kyle said the company would welcome the introduction of a universal pension scheme, which is favoured by Tanaiste Joan Burton.

The plan is designed to avoid a future crisis by ensuring that more Irish people are able to cover the costs of their retirement.

It would see employees automatically being enrolled in a pension scheme, though they would have the opportunity to opt out.

Irish Life estimates that retired workers need to maintain 60pc of their salary to keep their standard of living.

Online Editors

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