Half of those who have savings leave their money in bank and credit union accounts, earning little or no interest.
This means that many may be missing out on better returns when investing money in investment products.
But many say they don’t understand investing, a survey commissioned by pension and investment firm Aviva shows.
Around 147 billion euros in household savings are deposited with banks and credit unions, separate figures from the central bank show.
The Aviva survey found that one in four women said they were “too concerned” to invest their money, so take a safety-first approach by leaving money in the bank.
For both men and women, a quarter of respondents said they don’t really understand what investing means.
A majority of people would need to have a rainy day fund before they would consider investing their savings.
The survey of 1,000 adults nationwide, conducted by iReach Insights, examined consumer attitudes towards their savings and diversifying into some form of exchange-linked investments.
It found that only 17 percent of respondents said they would seek financial advice before investing.
Aviva’s Eoin Kennedy said: “The survey results confirm that the Irish are overwhelmingly conservative about their nest egg, with 50 per cent of people saying all their savings are in savings accounts.
“However, if we delve deeper, the reasons for this conservatism become apparent, with nearly one in four respondents saying they don’t know what investments are.
“This, in turn, suggests a lack of understanding of all the options available to them, some of which may well offer better returns.”
Mr Kennedy said the results suggest people need more information and guidance on investing and being educated on the options open to them when it comes to their savings.
“The perception that investing is reserved for the rich is just wrong,” he said.
Mr. Kennedy says a poor understanding of stock market-linked investing is likely to keep people from getting a better return on their savings.
He added that financial advice is crucial when it comes to investing, especially for those who have no investment experience or understanding.
The survey found that women tend to be more concerned about putting their money into investments than men. Around 29 percent of women say they don’t have a good understanding of investing, compared to 17 percent of men.
The fear of losing money is one of the main reasons for reluctance to invest. More than one in five say they would be too worried about losing money if they invested in stocks through a mutual fund.
The survey emphasized the importance of an emergency fund – money set aside to help with unforeseen emergencies or problems.
Nearly 60 percent of respondents said they would need three months to a year of income before considering diversifying into the stock market or other forms of investing.
https://www.independent.ie/business/personal-finance/many-savers-are-missing-out-on-the-chance-of-better-financial-returns-by-leaving-their-nest-eggs-in-a-bank-42126342.html Many savers miss the opportunity for a better financial return by leaving their nest egg in a bank