FAMILY and friends are the first choice for financial advice for most people — with information and advertising from financial institutions trailing behind.
When asked what they would do with a windfall of 5,000, a third of respondents in the latest Irish Bankers Federation (IBF) survey said they would put the money into a savings account, while a quarter would use the money to go on holidays.
Others would use the money to pay off debts — 25% — and carry out home improvements — 21%.
The findings also show that one in six Irish homeowners own a second property with 40% of people expecting a fall in house prices this year, compared with 9% last year.
Over half of 25 to 34 year olds do not own their own home, twice the average for the overall population.
Also of the 93% of adults that have savings, 53% said they have so in a credit union and 48% in a bank or building society.
The three factors that determine which choices individuals make in choosing a financial product in which to invest are: Level of risk involved; level of return expected and thirdly, a clear understanding of the product.
Savings (52%) are the top investment that people have in place as a potential source of income for retirement, followed by the State pension (33%) and a personal pension (32%).
One in 20 said they plan to downsize to a smaller house to support their retirement.
Chief executive of the IBF, Pat Farrell said: “Individuals have clearly become more cautious in a more challenging economic environment. However, the good news is that the vast majority of people are saving and/or investing, and this trend looks set to continue into the future.
“The research also shows that consumers like to be personally involved in financial decision making, which is important as it enables them to fully benefit from a competitive market place with greater choice.
The research, conducted among 800 people in March by Amárach consulting, also found that one in five consumers have nothing in place as a potential source of retirement income while 75% have never made an additional voluntary contribution (AVC).
When monitoring investments a third of consumers do not regularly review the performance of their investment with the same amount not knowing how their investments have performed in the past year.
It also shows consumers have become more risk averse as the economy slows down, with the majority favouring a safe investment approach with lower returns.
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