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Savings - Ireland - January 2014
Introduction
 
From the severe and dramatic loss of value that occurred in the aftermath of the financial crisis and subsequent downturn, the Irish savings market has entered a period of relative stability. Although Irish consumers have broadly healthy and positive attitudes – and intentions – towards saving, it is difficult to anticipate anything other than small annual growth in the years ahead. Household incomes remain under pressure, making it difficult for most consumers to implement and follow a structured savings regime. Moreover, with interest rates so low, it simply makes financial sense for those with high levels of personal debt to focus on reducing this debt rather than saving.

This report examines the value of Irish consumers' savings, how Irish consumers contribute – routinely or not – to these savings, the savings-related products owned by Irish consumers and the reasons why Irish consumers save.

Key themes in the report
●	What level of savings do Irish consumers have? – How much cash do Irish consumers have in savings and investments? What demographics have the most? And what demographics have the least?
●	How do Irish consumers contribute to their savings? – How do consumers typically manage their savings on a monthly basis? Do they make regular transfers to a savings account or is their savings behaviour less structured and ordered than that?
●	What savings and investment-related products do Irish consumers own? – What are the most popular and most commonly owned savings and investment products? What products are consumers most likely to aspire to own?
●	Why do Irish consumers save? – What are the main reasons and motivations behind consumers' savings behaviour? Do different demographics save for different reasons?

Mintel reports of relevance include:

●	Current Accounts – Ireland, December 2013
●	Consumers and Retail Banking – UK, October 2013
●	Irish Lifestyles – Ireland, September 2013
●	Online and Mobile Banking – Ireland, September 2013
●	Credit Products – Ireland, August 2013
●	Packaged and Current Accounts – UK, July 2013
●	Insurance – Ireland, May 2013
●	Mortgages – Ireland, March 2013
●	Savings – Ireland, January 2013.

Data sources
In compiling this report, Mintel has gathered data from separate NI and RoI sources (eg NISRA – Northern Ireland Statistics and Research Agency, CSO – Central Statistics Office). 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.

Mintel also draws consumer insight from other sources:

●	Mintel’s Inspire database and previous Mintel reports in the UK and Ireland.
●	Exclusive consumer research commissioned by Mintel and conducted by Toluna in January 2014.

Definitions
This report discusses the dynamics that are driving or impeding growth in the savings market in NI and RoI.

There are numerous 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 withdrawing their 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.

Abbreviations
AIB | Allied Irish Bank
AER | Annual Equivalent Rate
BoE | Bank of England
CAC | Cotation Assistée en Continu/French Stock Index
CGT | Capital Gains Tax
CSO | Central Statistics Office
DAX | Deutsche Borse Ag/German Stock Index
DIRT | Deposit Interest Retention Tax
EBS | Educational Building Society
ECB | European Central Bank
ESRI | Economic and Social Research Institute
EU | European Union
FTSE | Financial Times Stock Exchange
HSBC | Hong Kong & Shanghai Banking Corporation
ISA | Individual Savings Account
ISEQ | Irish Stock Exchange
NI | Northern Ireland
NISRA | Northern Ireland Statistics and Research Agency
NS&I | National Savings & Investments
NTMA | National Treasury Management Agency
OECD | Organisation for Economic Cooperation and Development
ONS | Office for National Statistics
PTSBGH | Permanent TSB Group Holdings plc
RBS | Royal Bank of Scotland
RICS | Royal Institution of Chartered Surveyors
RoI | Republic of Ireland
S&P | Standard & Poor's
SME | Small to Medium Enterprise
TESSA | Tax-Exempt Special Savings Account
UK | United Kingdom

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