Bank of Ireland Savings and Investments Index drops in December

Finance | Tue 16 Jan | Author – Business & Finance

The index, which measures sentiment in Ireland towards savings and investments, lost some of its November gain in December due to lower investment levels and weaker sentiment towards saving.

Finishing at 102 points from November’s 103, the overall drop in the Bank of Ireland/ESRI Savings and Investments Index was due to lower investment levels and an easing on saving levels in the first half of 2018.

The monthly Savings Index fell to 103 points last month from 104 in November. The monthly Savings Attitudes Index, which asks people about their saving behaviour and how they feel about how much they save, was unchanged with just over half (53%) of people saving regularly last month.

The Savings Environment Index, analysing households’ views on the environment for savings, fell by 3 points to 98 in December. Compared to a year ago, the three-month moving average trend for this index moved up 11 points compared to a year ago. This could either be a temporary decline or savers are looking for higher returns for their funds.

The Investment Index, the savings counterparts, measures people’s attitudes towards investing. In December, the Irish’s willingness to invest remained strong. 34% of people saying they invested regularly compared to 31% in November. Investment was more common amongst young people with 39% of people under 50 saying they invested regularly compared to 26% over 50.

The amount of people that invested in December was lower. 63% in December said they were investing the right amount (67% in November). 21% say they didn’t invest near enough (up 16% from November). This is a second consecutive decline.

The Risk Barometer asks households what they would consider doing with a windfall gain of €10,000. Last month’s survey shows Irish people prefer to save with nearly two-thirds saying they would save some of the windfall. People were also open to investment with a higher proportion saying they would invest (47% compared to 41% in October).

Tom McCabe, Global Investment Strategist, Bank of Ireland Investment Markets, summarised the findings: “Irish sentiment towards savings and investments eased in December mainly as a result of a weaker outlook for the saving and investment environment. December’s decline in the savings environment index may be temporary given recent trends in the index but it could also be an early indication that savers are looking for better returns on their money and are willing to consider alternatives to their savings account.

“The investment environment index also slipped back in December which was surprising considering strong market returns in 2017 with world stock markets up 8.9%. Looking at the levels of investment, it is likely that Christmas was a considerable factor in the December dip as over one-fifth of respondents felt they invested nowhere near enough in December. With consumers choosing to spend their cash on what was previously earmarked for investment, it could be the case that the mind was willing but the wallet was weak!”