Getting your savings working for you

The findings of Zurich’s savings and investments survey* finds there is a lack of confidence among people when deciding where to save or invest their money and highlights the benefits of seeking the help of a financial adviser.

When it comes to saving, 6 in 10 adults save regularly, with an average of €576.50 saved each month. When asked what rate of return they were receiving from a bank, 3 in every 4 surveyed said they are aware of the current rate of interest they are receiving, with most assuming that it is under 0.5%.

When it comes to the level of investment risk people are willing to take, men and women have different perspectives when it comes to risk. Men and younger adults tend to be more oriented towards higher risk options compared with women.

When asked about their knowledge and understanding of savings and financial management, 38% said they had some knowledge but do not feel very confident in this area, while 45% said they have a reasonable level of understanding. Those with insurance backed savings and investments, and indeed those with a greater risk preference, are much more comfortable with their extent of knowledge and understanding.  Those with much more limited risk preference are more likely to claim little knowledge in this area.

Savings motivations

While 55% of people are saving for a rainy day, 30% are saving for their retirement and a further 29% are saving for their children’s education.

In order to better understand the motivations that encourage people to save, we asked those surveyed to tell us what savings providers could do to encourage them to save more. The general perspective of effective ways of encouraging savings is to offer better returns, to use special offers and promotions, and to assist savers with online tools and guidance.

Interestingly, older savers are a lot more likely to indicate that they would be motivated by more competitive returns whereas a larger number of younger savers indicate significant appeal in personal online set-up with investment guidance tools.

Performance

When it comes to monitoring the performance of their savings, 44% check on them at least monthly, while a fifth rarely do so and a third only once or twice a year. Those whose money is with an insurance-backed fund or those with a higher risk preference, are much less likely to frequently monitor performance.

Lack of understanding and the need to consult an expert are cited as reasons for not setting up a new savings plan. This is especially the case for lump sum investors who indicate that it can be overly complicated to establish a new savings plan.

Financial advice

Zurich’s research found the more experienced the saver the more likely they are to contact a financial advisor. According to those surveyed, the key benefits of a financial advisor would be the provision of regular updates and explanations and regular reviews of their portfolio and targets.

Many indicate that they would undertake online research to help source a financial advisor, while recommendations of family or friends is given as a deciding factor when choosing a financial advisor to help with financial planning. 

*Source: Savings and Investments research survey, May 2021 conducted by Behaviour & Attitudes (B&A).