A new report shows that people are becoming more concerned about their jobs, paying bills and other day to day worries, but they are still saving more than before the outbreak of Covid-19.
Bank of Ireland said its Savings and Investment Index made a strong recovery in the first quarter of this year, with a 9% increase bringing it to pre-pandemic levels.
The index stood at was 96 in February 2022 compared to 87 in November 2021 when it plummeted as the Omicron wave hit.
But it also noted that 42% of people are concerned about every day bills, up from a rate of 35% in November, and higher than any point during the pandemic.
Bank of Ireland noted that as the pandemic recedes, attitudes to savings are normalising, despite the rising inflation concerns.
42% of consumers say it is a “good time to save now” compared to 38% in February 2020 before the pandemic hit.
During the height of the pandemic, the Savings Index had risen considerably and reached a high of 110 in March 2021.
Since then it has trended down and dropped significantly in the fourth quarter of last year, as a Christmas spending splurge looked likely, while attitudes to saving now seem to have normalised to pre-pandemic levels.
Kevin Quinn, Chief Investment Strategist at Bank of Ireland, said that despite interest rates being near zero, the bank is seeing attitudes to savings returning to pre-pandemic levels.
“However, our survey results suggest that there is a high level of concern about day to day bills, suggesting that there is a heightened concern growing about the impact of inflation,” Mr Quinn said.
“The war in Ukraine and the impacts on the likes of energy prices and food prices suggest that these concerns will remain prominent in the months ahead,” he added.
Meanwhile, Bank of Ireland’s Retirement Optimism Index saw a significant drop in the February survey as it fell to 109 from 118 in November 2021.
When asked about how comfortable they expect to be in retirement, the survey showed a drop from 125 to 112, perhaps reflecting that increasing inflation and economic concerns were making people feel less certain about their finances and long term retirement plans.
When asked about their main worries, concerns about a new wave of Covid among savers decreased to 53% from 74% in November – a considerable distance from its August 2020 peak of 88%.