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Permanent tsb and Kantar launch new Reflecting Ireland research series to examine how consumer behaviour is changing.

New research suggests savers may be more conservative in how they use savings built up during the pandemic than anticipated.

  • Most respondents expect to spend just over a quarter of their pent up savings while holding on to the rest.
  • 79% of respondents want to continue with their current savings habit.

Optimism levels have remained unchanged but twice as many adults report feeling “anxious” compared to 2019 48% believe country is heading in the “right direction”

Monday August 30th savers are adopting a more conservative approach to using savings build up during the pandemic than anticipated according to new research from Permanent TSB Bank and, research company Kantar. 

The research was conducted in July amongst 997 adults aged over 18.  It is being published as the first in a new series of behavioural research undertaken by Permanent TSB and Kantar called Reflecting Ireland (#ReflectingIreland).  The research is designed to explore consumer behaviours to better understand various factors that impact the economy.

Leontia Fannin, Head of Corporate Affairs at Permanent TSB said that the findings could signal a lower-than-expected post Covid “bounce” in the economy; “There has been an assumption that once the economy re-opened, that consumers would rush to spend their Covid savings.  This research suggests that may not happen. Retailers may have to fight harder than they thought to persuade consumers to cash-in their savings.

Behavioural Scientist, Claire Cogan of BehaviourWise who worked on the project said: “The pandemic has had a profound effect on behaviour.  It has led to unprecedented levels of uncertainty, and it’s not surprising that so many of us choose to save what we can in these uncertain times.  This research shows how the pandemic is affecting our frame of mind as well as our finances, and how this is shaping our thinking in terms of the months ahead.”

Key Findings of Survey Include:

Attitude to Saving:

The survey has found an increase in the proportion of adults now saving regularly with 58% currently describing themselves as regular savers – up from 50% in 2013.

79% of those who identify as savers indicate that they plan to continue with their current savings habit even as the economy begins to re-open.  56% say they will save the same amount as currently while 23% say they expect to save more than they did prior to the pandemic.  In terms of motivation to save, “a rainy day” was identified by nearly half the respondents (49%) as the key motive.

While many economists have predicted a savings-fuelled spending boom in the coming months, respondents to this research indicated a more conservative outlook.  On average, respondents indicated that they would spend just over a quarter (27%) of their new savings in the coming three months and planned to hold-on to the rest.  This attitude is linked to age with younger respondents (18 – 34) expected to spend a higher proportion of their savings and older respondents (55+) less.

In terms of plans for spending their savings over the next 3 months, 65% of respondents said they will spend on holidays, 35% said home improvements, 30% said entertainment and 28% said they will spend on “family and friends”.

Paul Moran, Associate Director at Kantar said “It is instructive to note that following on from our lockdown confinement, planning ahead for holidays and home improvements takes priority – we feel the need to experience something different, but have also re-evaluated our relationship with our living spaces over the past 18 months”.

In addition to exploring attitudes to saving, this edition of Reflecting Ireland also explored how people feel emotionally, how they feel about their own personal circumstances, and their feelings about the direction of the country.

Emotional Feelings:

On a personal level, more people were positive about how they were feeling emotionally.  Over half 53% expressed positive sentiments compared to 47% who were more downbeat.

Delving deeper, we find the two most dominant emotions at the moment are optimism and anxiety.  1 in 5 of us are feeling optimistic.  This level of optimism has remained virtually unchanged over the last 4 years. However twice as many of us report feelings of anxiety compared to before the pandemic.  In 2019, 1 in 10 of us reported feeling anxious.  Today this has increased to 1 in 5.

Evaluation of Personal Circumstances:

The research found that 33% of adults expect to be better off this time next year while 20% believe they are better off now than they were this time a year ago.  Younger people are particularly confident about their financial future with 59% of those aged 18 – 24 believing they will be better off in a years’ time compared to just 19% of those aged 55 – 64.

Evaluation of Economy and Country’s Direction:

In terms of Ireland’s economy, the research found that an equal proportion of adults feel that it will improve or worsen with 37% saying improve versus 36% saying it will worsen.

On the issue of the country’s direction, almost half (48%) feel Ireland is generally moving in the right direction while just over a third (35%) feel we are heading down the wrong track. 

Access the full report here.

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