We’re richer than ever before – new research from the Central Bank of Ireland shows that Irish wealth has reached a new high of €724,000 per household.
And yet, we remain reluctant to put this wealth to work for us by investing. We still have staggering amounts on deposit earning next to nothing, while figures from the Central Bank show our disinclination to put it to work in the markets.
This will cost us – a wealth report from Davy last year found evidence “of an overly conservative and/or passive management of Irish household financial assets”. By keeping so much money on overnight deposit, earning next to nothing, we are “systematically foregoing risk-free returns”, Davy found. Indeed, “the reality is that we could have achieved more in wealth terms in the past decade with a concerted effort,” the report found.
But there is an appetite to do more with our money: of those investing, about 32 per cent have only started in the past two years, according to the Central Bank, while the Government has big plans for its proposed tax-free savings/investment product aimed at boosting participation.
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So, it’s a good time to familiarise yourself with dipping a toe in the markets. Over the space of eight weeks, we are going to guide you through how you can start investing, from stocks to bonds and investment funds to crypto.
But first, why are Irish people so loath to invest? What are the risks of leaving your money on deposit? And how can you mitigate risks when investing?
We’re not big investors
Last year, a report from the Central Bank showed that the Irish have one of the lowest investment participation rates in Europe – and Europe itself lags behind the United States.
We hold about 38 per cent of our financial assets in deposits and cash, some way higher than the EU norm of 30 per cent – and far higher than either Denmark or Sweden (both 13 per cent).
And a lot of our wealth is in housing; a more recent Central Bank report finds that housing wealth accounts for almost 68 per cent of total net wealth, and represents 60.6 per cent of the total assets of Irish households.
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Moreover, when it comes to investing, Irish households hold just 2.3 per cent of their financial assets in direct investments such as listed equity and debt securities – lower than the EU average of 7.5 per cent. When it comes to stocks and shares, we allocate less than 2 per cent – significantly below countries such as Finland (14 per cent) and Germany (7 per cent).
And it’s not because we love bonds – Irish investors have just 0.4 per cent in debt securities, compared with Hungary’s rate of13 per cent and Malta’s 11 per cent; or funds - we put just 2.2 per cent of our money into such vehicles, much less than Belgium and Spain (both at 17 per cent).
But it doesn’t mean we’re not entirely invested: we beat the European average when it comes to investing through insurance products and pensions.
We love low yielding deposits
Latest figures from the Central Bank showed households in Ireland had a staggering €172 billion on deposit as of December 2025 – and of this, about 85 per cent was earning next to nothing on overnight rates.
Recent results from AIB showed that from December 2024 to September 2025, deposits rose by a whopping €4.4 billion at the bank, up by 4 per cent – despite the bank paying out a rate of 2.25 per cent at best on fixed term deposits.
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“It’s not just all small holdings, there are large deposits out there that are likely sitting in non interest bearing accounts,” says Rachael Morgan, head of strategy at Davy. “It’s unusual relative to other countries.”
The reasons are complicated
So why this reluctance to move our money?
“It’s complicated, it’s down to a confluence of factors,” says Morgan.
First of all, Irish investors still live with the memory of bad investing experiences – plummeting Eircom shares in 1999, collapsing bank shares post the 2008 global financial crash, for example.
“The scars from the financial crisis are still there, and risk aversion is a consequence of that,” says Ian Quigley, head of investment strategy for RBC Brewin Dolphin Ireland. “It has obviously had a legacy and impact on investors in Ireland.”
Having money to invest is another factor.
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“I don’t know if people are reluctant to get involved in investing, but they mightn’t see that they can afford it,” says Richard Waring, head of consumer research at Bank of Ireland.
As Morgan says, “the reality is that half the population would struggle to survive an income shock”.
Figures from Bank of Ireland research showed that 45 per cent of the adult population are either struggling financially to make ends meet or are stretched – with no capacity to save.
“So they just don’t have the bandwidth to invest.”
Where people do have money, they tend to opt for a tax efficient pension – the greatest source of retail exposure to stock markets, says Morgan.
Cultural factors are also at play, with a preference in Ireland for real-world assets.
“People love property,” says Morgan.
And our desire for home ownership can drive people’s savings behaviour.
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At the younger side of the age spectrum, people are paying high rents while saving to buy a home. And at the older side, people who could invest are holding on to their money in case their children need a gift; almost 50 per cent of first time buyers believe they’ll need help from family to buy a home, according to Bank of Ireland’s research.
It’s about parents “keeping the powder dry” to ensure they have cash reserves should their children need it.
In the Central Bank report, respondents cited a lack of knowledge as being a factor.
Morgan agrees.
“Confidence, accessibility of advice, understanding investments is a huge thing. Where do I start? How do I know I’m doing the right thing?”
And then there is the proximity effect. “People are concerned about not having money when they need it,” says Morgan.
“If people are saving – access is really important to them,” agrees Waring.
Time constraints are another issue. “Where does it sit in people’s priorities?” asks Waring.
The confusing Irish taxation regime is also seen as a problem – you pay 33 per cent on individual stocks, but 38 per cent on investment funds. And what about offshore exchanged-traded funds? And having to cash in your gains to pay a tax bill every eight years?
The different charges and commissions that can be levied, such as through allocation rates, can also put people off.
As Morgan says, “there is an awful lot of complexity”.
The risks of not investing
The contradiction, however, is that while people “rationally recognise that in order to preserve the value of their capital they have to earn above inflation”, says Quigley, they aren’t always prepared to follow through.
“There’s an awareness of that – just apprehension around what it could mean,” he says. Indeed this is borne out by the amount of money on deposit. Markets remain volatile, and this level of uncertainty means that people think ‘I’ll leave it there – I don’t want to place it at risk’,” he adds.
But of course, “they’re avoiding volatility, but they’re not avoiding risk”.
Inflation is running at about 2.7 per cent – but the best returning accounts typically offer less than this.
And if inflation is higher than your return, then you’re effectively losing money. For example, if you have €10,000 in a savings account, and your return is just 0.5 per cent, if inflation is 3 per cent, then in real terms, you’re giving up €250 a year.
“It’s the concept of the money illusion,” says Quigley, referring to our tendency to consider money in nominal terms – rather than taking into account the impact of inflation.
So, we see our money growing by 1 per cent – but forget that in terms of purchasing power, it has actually lost value.
Mitigate your risks
This is not to say that looking for a higher return doesn’t come with a cost.
“Earning a return above inflation doesn’t come for free,” says Quigley, adding that any return in excess of this, is essentially compensation for assuming some level of risk, and the odd difficult period.
But, says Quigley, the answer for most people is not to be “all in or all out” of the markets – it’s to get their asset allocation right.
This means holding a combination of cash, bonds and equities, either in stocks or funds.
“Go longer, diversify and if you need the money back, there are alternatives there – fixed income products,” adds Morgan.
It’s also about getting your risk profile right.
“Attitude and willingness to tolerate market volatility will vary by individual,” says Quigley.
So, it’s not about chasing gains.
“It’s important that people are honest with themselves,” he says, “if you’re seeking to maximise returns on capital, and you have a low tolerance to market volatility, then you’re going to be miserable”.
After all, if you feel every move of the market feel too keenly, it will be “incredibly stressful” he adds.
So then, it’s important to put a plan in place – for return, and peace of mind.
“In general, our experience is to avoid complexity as much as possible. Complexity tends to get people into trouble,” says Quigley.
In short, Quigley says you need to look for simplicity, when it comes to your investment solutions, and transparency, in terms of costs.
Markets will move, but Quigley says you can try to remove those challenges by being well diversified and well spread.
