People are adopting a more conservative approach to using savings build up during the Covid-19 pandemic than anticipated, new research from Permanent TSB Bank and research company Kantar shows.
Leontia Fannin, Head of Corporate Affairs at Permanent TSB, said today’s 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,” she added.
The new research 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 said they plan to continue with their current savings habit as the economy begins to re-open.
56% said they will save the same amount as currently while 23% say they expect to save more than they did before the pandemic.
“A rainy day” was identified by 49% of respondents as the key motive for saving.
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.
In terms of plans for spending their savings over the next three 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”.
The research also found that over a third 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.
Kantar’s Paul Moran said it was 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,” he said.
The research published today was conducted in July amongst 997 adults aged over 18.
It is the first in a new series of behavioural research undertaken by Permanent TSB and Kantar called Reflecting Ireland (#ReflectingIreland) which aims to explore consumer behaviours to better understand various factors that impact the economy.