Consumers feeling less secure financially than three months ago

CONSUMERS’ financial confidence has taken a knock in the last three months, according to a survey, although investor sentiment has shown signs of improvement.

The latest quarterly financial confidence index from financial services firm Standard Life shows a reading of 53.3 for the first three months of 2010. This was down from the 54.6 level measured in the final quarter of last year – which also happened to be the first time the index had risen in nearly two years.

While the previous index showed most consumers believed the worst of the economic crisis was over, the latest edition of the survey is thought to reflect reaction to the conflicting forecasts for economic growth.

Brendan Barr, head of marketing at Standard Life Ireland, said: “In recent months there have been conflicting messages regarding the economic outlook, which no doubt is causing some confusion in relation to people’s financial confidence.

“I’m sure the increased cost for taxpayers of bailing out the banks has weighed on the latest results,” Mr Barr added.

While the last index showed Munster-based consumers were the least financially secure, the latest survey shows those living in Connacht and Ulster have taken over that mantle. Also, perhaps unsurprisingly, those in the 35-44 age bracket remain the least secure.

The index hit a record low of 52.6 last September but was up at an all-time high of 66.7 at the end of the first quarter of 2008.

Another indicator that all is not lost is a sign that investor sentiment, in some categories, is improving.

According to Mr Barr: “Pensions AVCs continue an upward trend from the lows reached in April 2009 and more than one-in-three people believe now is a good time to invest in a pension. That’s up sharply from only one-in-four 12 months ago.

“Respondent sentiment towards purchasing Irish buy-to-let property has picked up for the second quarter in a row, following a low reached in December 2008 – 26% think now is a good time to purchase a buy-to-let property in Ireland, compared to the low of 21% reached in December 2008,” he added.