Both Irish economies are growing and unemployment is in decline, but consumers are still feeling the squeeze on their personal finances – so most consumers are not yet in a position to add greatly to their savings.
Moreover, even though consumer confidence is high, many still feel the need for precautionary saving: the main reasons cited by Irish consumers for saving are to cover unexpected events and for security. For those consumers with the financial means to save, there is little financial incentive to do so given the historically low interest rates.
Key themes in the report
What level of savings do Irish consumers have? – How much are Irish consumers’ savings and investments portfolios worth? Are there any particular groups of consumers with high-value portfolios? And are there any particular groups of consumers with low-value portfolios or no savings/investments at all?
What savings and investment products do Irish consumers own? – What are the most popular savings and/or investments-related products among Irish consumers? What insights do this data give into Irish consumers’ priorities when saving money?
Why do Irish consumers save? – What are the most common reasons and motivations driving Irish consumers’ savings behaviour? What implications does this have for providers’ advertising and marketing of savings and investment products?
What impact will the current economic conditions in NI and RoI have on the future savings intentions of Irish consumers? – Will the most optimistic outlook for the RoI economy see consumers undertake less cautionary saving?
Mintel reports of relevance include:
Personal Loans – Ireland, September 2014
Current Accounts – Ireland, August 2014
Deposit and Savings Accounts – UK, April 2014
Mortgages – Ireland, March 2014
Consumers, Savings and Investing – UK, January 2015
Savings – Ireland, January 2014
Definition
This report analyses the various factors and issues impacting upon the savings market in Ireland.
There are several different types of deposit and savings account available to RoI and NI consumers.
Some of the terms mentioned in this report include:
Demand accounts include current accounts and other instant access-type accounts that allow consumers easy access to funds, requiring no notice. Sometimes called easy-access or instant-access accounts, these accounts do not generally impose any restrictions on withdrawals and provide either a variable interest rate or a fixed/guaranteed interest rate for an introductory period.
Fixed-term deposit accounts or bonds are accounts requiring consumers to commit to leaving their funds untouched for a specific period of time, which can be anything from one to five years. The account holder generally receives a bonus payment on maturity. Although most accounts do not permit withdrawals prior to the maturity date, those that do invariably levy a penalty. Normally, fixed-term deposit accounts entail fixed interest rates, and the funds invested are completely secure.
An Individual Savings Account (ISA) is a tax-free wrapper through which UK/NI savers can shelter cash, shares and insurance from income tax and CGT (Capital Gains Tax). Some ISAs wrap stockmarket investments, and are termed ‘stocks and shares ISAs’ or ‘equity ISAs’. The ISA scheme was introduced by the UK government in April 1999 to replace the previous tax-free savings vehicles, PEPs and TESSAs.
Notice accounts are accounts that require consumers to give their account provider notice before the withdrawal of funds. Most financial services providers offer notice periods of 30, 60 and 90 days.
Regular savings accounts are accounts in which the holder is required to make regular monthly payments in return for a higher interest rate.
Data sources
In compiling this report, Mintel has gathered data from separate NI and RoI sources (eg NISRA, CSO). In some cases, therefore, it has not been possible to provide comparable data for each region. For the purposes of this report:
Ireland or IoI refers to the island of Ireland.
NI refers to Northern Ireland.
RoI refers to the Republic of Ireland.
Therefore, ‘Irish consumers’ refers to both NI and RoI consumers.
For the purposes of this report, Mintel commissioned exclusive online research into the savings habits of Irish consumers and their attitudes towards savings products. The research was carried out by Toluna on behalf of Mintel in October 2014.
A total of 745 internet users aged 18+ in NI and 1,235 internet users aged 18+ in RoI were asked the following questions:
“Excluding the value of your main home and any pension savings you may have, roughly how much do you have in savings and investments? Please include the value of any investment or second homes that you own.”
“Thinking about savings and investment products, which, if any, of these do you currently own or plan on arranging within the next 12 months or so?”
“Thinking about the savings and investment products that you own, or plan on buying, is the money intended for any particular purpose?”
The results from this survey are discussed in The Consumer sections of this report.
Please note that the results presented in The Consumer sections of this report relate to the usage and habits or Irish internet users only, and do not account for the behaviours of non-internet users. Eurostat (January 2015) highlights that 80% of RoI consumers have used the internet in the last 12 months, while the ONS (May 2014) highlights that 79% of NI consumers have used the internet.
