Confidence about retirement finances rising, BoI and ESRI research shows

One-third of people feel it will be easy to live comfortably when they cease working

The Bank of Ireland-ESRI Retirement Optimism Index shows  57 per cent of people have some financial plan for retirement, the highest since the survey began last November.

The Bank of Ireland-ESRI Retirement Optimism Index shows 57 per cent of people have some financial plan for retirement, the highest since the survey began last November.

 

One in three Irish people believe it will be “easy” for them to live comfortably in retirement, a study published on Monday shows.

A Bank of Ireland-Economic and Social Research Institute (ESRI) survey of how people feel about their finances shows confidence about their post-retirement prospects has increased.

The study in May found that, overall, one-third of people felt it would be easy to live comfortably once they had retired.

Among people under 50, 31 per cent said they believed they could live comfortably in retirement, while the number rose to 34 per cent for those over that age.

The Bank of Ireland-ESRI Retirement Optimism Index shows that 57 per cent of people have some financial plan in place for retirement, the highest since the survey began last November.

Tom McCabe, of Bank of Ireland investment markets, said that the index showed greater confidence among Irish people about retirement.

“The results may be first evidence that improving household finances are allowing Irish people turn their attention to longer-term retirement planning issues now, in much the same way that they have boosted shorter-term savings in recent years,” he said.

However, poor returns from deposits have left some people feeling that now is not a good time to save.

Deposit returns

According to the report, only 35 per cent of those over 50 felt it was a good time. The bank suggested this reflected dissatisfaction among “older lump-sum savers” with deposit returns.

Fears about the impact of a global trade war along with political strife in Italy and Spain have made Irish people wary of investing.

The proportion of people that believed May was a good time to invest fell to 30 per cent from 34 per cent the previous month.

However, the report notes that 34 per cent believed the environment would improve in six months, suggesting that they felt current geopolitical troubles would pass.

Mr McCabe acknowledged the threat of a trade war posed a risk to the global economy.

“Furthermore, the political uncertainty in Italy, the sharp spike in Italian borrowing costs on world markets and even some murmurs of ‘Itexit’ in May were all queasy reminders of the 2011 euro zone debt crisis,” he observed.

“Given how painful this period was for Irish investors, perhaps it’s not that surprising that Irish investors chose to see the glass half-empty rather than half-full in May.”