Three in four adults in Ireland have savings or deposit accounts separate to current accounts, according to a new survey.
The research, carried out for Banking & Payments Federation Ireland (BPFI), found that more than one third of those with savings have less than €5,000 in their account.
The study, which examined the savings and investment attitudes among Irish adults, revealed that savings amounts vary significantly by age.
Among those with savings accounts, younger adults aged 18-34 are most likely to have modest savings, with 45% holding less than €5,000.
In contrast, 43% of individuals aged 55-64 and 65 or over report having more than €10,000 saved.
The survey of 1,000 adults, conducted by Amárach Research, also found that fewer than half (44%) hold any type of investment.
In terms of the reasons for investments, 64% of the respondents cited saving for a rainy day, 38% of savers aimed to cover short-term expenses such as holidays, while 34% reported saving to cover other major expenses such as house deposit or wedding.
39% of investors said they were setting aside funds for unexpected bills or events.
One in five savers (19%) and just over a third of investors (35%) said they wanted to provide an income for retirement.
While 39% of investors said they were aiming to gain better returns than those offered on savings accounts.
And one in five (19%) investors indicated that they did not understand the fees and taxes they need to pay, and a similar proportion (20%) said they did not closely monitor their investment performance.
Savers prioritising short to mid-term financial needs
The Chief Executive of BPFI said the survey shows that “most savers are prioritising short to mid-term financial needs, such as saving for a rainy day or short-term expenses like holidays, over long-term planning, such as retirement or future income.”
However, Brian Hayes said the study revealed that older individuals “tend to focus on long-term financial security, including retirement and inheritance”.
With more than over half of respondents (56%) not holding any investments, Mr Hayes said the results indicate that “there is potential to increase the number of people investing”.
“The European Commission has proposed that Member States, including Ireland, consider developing a new form of Savings and Investment Account.”
“Any new account introduced should be easy for consumers to understand and to open, have clear tax benefits, and give investors freedom to invest as little or as much as they want and withdraw funds when it suits them,” he added.
Mr Hayes also said with one in five consumers indicating that they did not understand the fees and taxes they need to pay and a similar proportion stating they did not closely monitor their investment performance.
“We strongly encourage more consumers to seek information on how their investment products work, to assess the likely costs and potential returns, and to ensure they have the products that best suit their needs,” he said.