Help needed to get Irish people over fear of investing, says economist

Economist Alan McQuaid says finance minister Simon Harris needs to come up with a simple 'Lady Bird' explanation as to how investments work.

The Government needs to do more to help people get over their fear of investing cash, according to a leading economist.

The latest household savings figures show people saved less at the end of last year, but there is still a record amount of cash — more than €170bn — held in current accounts or other easy-to-access but low-interest account types.

Referencing the illustrated children’s books from the early 1900s, economist Alan McQuaid says finance minister Simon Harris needs to come up with a simple “Lady Bird” explanation as to how investments work.

“One of the strange things about our economy is that while deposit rates are low, there is a record amount of money held on deposit,” he said.

“But a lot of people are nervous and were badly bitten in the crash.

This is despite the fact that when inflation continues to rise and deposit rates are less than inflation, the value of the money on deposit is actually going down.

“But I think people just don’t care about that.

“Even though shares tend to perform better in the long run, people just see leaving money on deposit they can get access to as a safe bet.

“Maybe what this tells you is that the Irish overall are quite cautious.

“I’d say there is a mentality among people that even though they could earn more money from shares, they are happy to keep their money on deposit, protected by the bank deposit guarantee scheme.”

Mr McQuaid added: “The risk [of investing in shares] isn’t as great as you think it is.

“I think that probably [there] is an argument for the minister of finance to go out and do a 'Lady Bird' explanation to people how these things work.”

Mr McQuaid was speaking as new Central Statistics Office (CSO) data showed that, in the final three months of 2025, the seasonally adjusted household saving rate stood at 12.4% — the equivalent of €1 in every €8 of disposable income.

This saving rate was down from a revised 14.2% in the three months up to September last year, and below the average of 13% since the start of 2023.

Although household savings typically dip in the final quarter of the year due to Christmas spending, the saving rate at the end of 2025 was still lower than in the same period of 2024. The seasonally adjusted rate stood at 12.4% in the fourth quarter of 2025, compared with 15.3% a year earlier.

CSO statistician Mark Manto said the 12.4% rate was the lowest seasonally adjusted household saving rate since it hit 12% in the second quarter of 2024.

“The provisional 2025 saving rate was 13.6%, similar to 2024 and higher than 2023.”

Household spending in the last quarter of last year on goods and services was €42.9bn, a 2% increase on the previous quarter.