Save more and spend less is focus for our finances

THE public’s top three New Year financial resolutions are save more, spend less and pay off debt, according to a study by the Bank of Ireland and the State-backed ESRI.

Some 41% of people surveyed said they will save more money, 24% will spend less and 16% aim to pay down/pay off debt, the latest BoI/ESRI savings and investment index has revealed.

But the prospect of a hard-Brexit is driving ‘some extra precautionary saving’ – with the percentage of regular savers in the border/midwest region rising to 51% last month, the highest for almost nine years. ‘Compared to the 2018 responses it appears people are trying to be more financially prudent this year,’ the index’s authors said. ‘This is particularly the case in respect of paying down debt, which increased from 12% in 2018 to 16% in 2019.’

Tom McCabe, of Bank of Ireland Investment Markets, said: ‘The results of our research on new year financial resolutions show that Irish people are clearly keen on pursuing their own version of “Operation Financial Transformation” in early 2019.

‘The responses also show that, compared to 2018, Irish people are intent on being more financially prudent this year. It’s positive to see.’ However, he noted, people have a ‘blind spot’ when it came to long-term finance planning.

‘Only 5% of people were intent on learning more about their pension and only 3% said they would save more for retirement, Mr McCabe added. ‘This is worrying in light of improved longevity and the inevitable drop in income people face in the post retirement period.

And when it came to investing people were downbeat about the outlook.

Mr McCabe said: ‘For the first time in the index’s history, the percentage of people that felt it was a bad time to invest outweighed those that felt it was a good time to invest. Investors clearly need a dose of good news in order to restore their faith in investment markets but the strong market rebound in January should help here.’

The monthly Savings Index dipped to 102 in January from 103 in December with improved attitudes towards saving more than offset by a re-emergence of some gloominess about the outlook, a slightly surprising development given concerns about a no-deal Brexit.

A total of 53% of people were saving regularly in January with savings intentions boosted by spending patterns returning to normal post-Christmas and by New Year financial resolutions.