The latest data from Bank of Ireland’s Savings and Investment Index shows a notable recovery in saving and investment sentiment in Ireland between October and December, with the index returning to pre-pandemic levels. This shift is driven by an increasing number of consumers who now feel it’s a good time to save, alongside improved attitudes toward investing.
The index, which tracks public sentiment on savings and investments, has risen to 94 in the final quarter of 2024, up from 83 in July and a record low of 76 in August 2023. This improvement reflects changes in consumer concerns, with inflation—once the dominant issue for Irish households—falling to its lowest level in recent years. Only 18% of respondents now cite inflation as their primary concern, a significant drop from 33% in February 2023.
Concerns around housing and rent costs have also eased slightly, with 16% of households now identifying it as their biggest worry, down from 19% in May 2023. However, geopolitical tensions such as the ongoing conflicts in the Middle East and Ukraine remain significant concerns for 28% of the population, while fears of a global recession have risen, with 12% of respondents identifying it as a key issue, up from 6% in July.
Kevin Quinn, Chief Investment Strategist at Bank of Ireland, acknowledged the persistent concern over the cost of living, noting that while inflation remains a challenge, the decline in inflation has had a positive effect on how people view their financial prospects. “There is little doubt that the cost of living remains a prominent concern for a great deal of families in Ireland,” Quinn said. “However, this is the first time we’ve seen the fall in the inflation rate beginning to influence how people are thinking about their savings.”
Quinn also highlighted a shift in attitudes towards investing, attributing it to both the reduction in inflation and the strong returns experienced in global equity markets. “This is driven by the dual impact of falling inflation and the experience many have had of an exceptional period of strong returns, with the global equity market generating almost 50% since the start of last year,” he said.
The data indicates that confidence among investors is on the rise, with six in ten people stating they need to invest more than they currently do. Although inflation has been falling since late 2022, it wasn’t until August 2023 that sentiment around savings and investments began to show a noticeable shift, continuing to improve throughout the year.
This recovery in financial sentiment is expected to influence both household savings and broader investment behavior in the coming months.