Many investors feel more affluent, says Friends First

Nearly half of Irish investors feel they are better off this year than last year, despite rising interest rates and energy prices, according to new research, writes Ciarán Brennan

And around 80 per cent of the ABC1 social category feel that they will be financially better off next year and plan to continue the investment and savings habits formed over the past five years, the survey from Friends First and F&C Ireland has revealed.

The under-35 age group were the most optimistic, with almost 60 per cent saying they are better off than they were this time last year and more than 70 per cent expecting to be better off in 2007.

"There is still a level of optimism out there," said Friends First chief economist Jim Power. "The world economy is reasonably good, the Irish economy is still flying, corporate earnings are still pretty strong and there is a lot of mergers and acquisition activity going on. There is still a positive dynamic there that is not going to disappear, but I think there are grounds for a little more caution over the next couple of years."

Mortgage costs and pensions rank highest on the list of personal financial concerns among the Republic's top earners and investors. A total of 30 per cent indicated that a further 1 per cent rise in rates would have a major impact on their finances, while inflation, property price increases and energy prices were cited by more than 80 per cent of people at the factors most likely to derail the economy.

The survey of 500 people found that 67 per cent have pensions, 68 per cent hold a regular savings, 44 per cent hold life assurance products and 40 per cent hold shares. Among SSIA holders, 81 per cent are planning to continue to save once their SSIAs mature.

The Irish fondness for property investment prevails, with nearly half of potential investors still feeling that it is a good time to buy a property in the Republic. Some 45 per cent said it was still a good time to invest in a buy-to-let property in Ireland.

The research also reveals evidence of a waning appetite for foreign buy-to-let property investments, with seven out of 10 respondents feeling oversupply could make it difficult to let properties in many markets.