Worries over near record-high housing prices, inflation and the cost of living are spurring consumers to save harder, a survey shows, writes Sarah Slater.

According to the latest Bank of Ireland Savings and Investment Index, while the proportion of people saving is reaching close to historic highs, investors are expressing a cautious tone.

Concern over housing/rent is up by 23% – a rise of seven points on the last three month survey.

This rises to 39% for 16 to 29-year-olds. Up to 21% of those surveyed indicated they are most worried about inflation/cost of living – up three points since the previous survey.

The bank’s chief investment strategist, Kevin Quinn, explained that while Ireland’s inflation rate may have dropped to 1.8% in February, “both housing or rent and the cost of living remain the dominant worries faced by Irish households”.

Mr Quinn commented: “While the pace of inflation may no longer be as concerning, and the European Central Bank has already cut interest rates six times, the cumulative impact of price rises in recent years has left many households still in catch-up mode and it will be some time before this begins to lessen as a concern.”

He added: “The most notable increase in our survey was the concern about housing and rent, which was the biggest worry for almost one in four households.

“Inflation and the cost of living was up also, its first increase since February 2023.”

However, despite these concerns, the survey also showed that more people think now is a good time to save – possibly the best since late 2021.

This was also reflected in the number of people who are saving, reaching close to the historic highs last seen just before the pandemic in February 2020.

However, more than half – 57% – of households feel they are not saving enough.

Mr Quinn said: “What we are seeing is a slow return to the pre-pandemic way of saving.

“There’s no doubt people recognise the need to save, but when combined with the impact of the cost-of-living crisis of recent years, the savings habit is only returning slowly.

“This is demonstrated through a higher incidence of saving this quarter, but the smaller amounts that people can afford to put away”.

While investing habits remain strong, a cautionary tone is emerging.

When respondents were asked if it was a good time to invest, there was a marginal fall from the previous survey, and there was also a noticeable decline in how people viewed the stock market for the coming six months, with 44% believing the world stock market would be down in the that period compared to 32% in the last survey.

Mr Quinn said: “The experience that most people have had with investing over the past two years has, in general, been very positive.

“With almost 50% gains made in global equities in 2023 and 2024, there is little surprise that more people have the investment habit than ever before.

“That said, a lot is happening in 2025 to influence how people view the stock market and there is a much more cautious tone as a result.”

He added: “In [the first three months of 2025] alone, we have seen the onslaught of change from the new US administration as well as a very changed landscape in Europe.

“Many of last year’s winners in the stock market are trailing behind so far this year and markets like Europe have been the winners so far.

“With markets down to date this year, it is no surprise that investors are expressing a more cautious tone, and I’d expect to see more of this for the months ahead.”

The Bank of Ireland Savings and Investment Index is produced every three months from a nationally representative sample of 1,000 consumers.