What you need to know
As a result of sustained economic growth over the past few years, more Irish consumers are in a position to save, invest and contribute to pensions. Moreover, despite elevated levels of consumer confidence, uncertainties and anxieties stemming from the as-yet unknown impact of Brexit on the Irish economies are focusing the attention of many consumers on saving over spending. However, while economic growth has led to reduced unemployment, it has not yet had a very significant impact on household incomes. As of now, the savings ratio among both NI and RoI consumers lags international averages, while pension ownership is less than what would be considered ideal. The challenge facing the pensions industry is not only to increase ownership, but also to bring greater clarity to consumers' understanding of pensions, retirement and retirement planning.
Issues covered in this Report
This Report analyses the various factors and issues impacting upon the savings and pensions markets in Ireland. Mintel's exclusive consumer data examines the value of Irish consumers' savings and the range of savings products owned by Irish consumers. In addition, it examines the specific reasons why consumers are saving. It also examines consumers' attitudes towards retirement, retirement planning and preparedness.
Definitions
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 1-5 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. 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.
National Savings & Investments (NS&I) encompass a range of tax-free cash savings products, backed by HM Treasury, the most popular of which are Premium Bonds.
