Consumers look to save more

Almost 70 per cent of financial brokers believe there is an increased appetite for saving and investing among consumers, according to a new nationwide survey of financial brokers.

The survey by the Professional Insurance Brokers Association, which has 58 member firms in Co Galway and 860 nationally, shows a 28 per cent increase over last year.

Rachel Doyle, chief operations 0fficer at the association, says: “The main factors contributing to these rather dramatic changes in consumer behaviour are people feeling more confident about the future and an improvement in incomes for some groups.”

She said low returns on deposits was an issue, with more than 75 per cent of brokers saying consumers were moving from deposits to investments. However, she said while a majority appreciate that deposit accounts did not deliver value in the current very low interest rate environment, a “worrying element that there are people who still believe deposit accounts are a good investment vehicle over the long term".

Interest rates on deposit demand accounts are currently running at a maximum of two per cent compared to 2011, when some institutions were offering four per cent.

“Since none among us can predict the future and the financial crisis has taught us that there are no safe havens, the key message is that people need to diversify and spread their risks. Some element of risk is inevitable and people need to understand that and identify their own comfort level with regard to it," she said.

While more consumers were now open to exploring options, the real question was if they knew what was in their best interest in terms of financial planning.

“The big mistakes people are making include not diversifying, tending to take a short-term view and many are not educating themselves about the real choices open to them.”

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