One in four Irish adults have less than €500 in savings, new research by Capital Credit Union has found.
The poll of 3,700 people also found that while most people have savings of €6,500 in the bank, for 53% it is less than €3,000.
On Moncreiff, John Lowe from MoneyDoctors.ie said the cost of living crisis has likely influenced the data but the trend is not unique to Ireland.
“In America, 70% of the population can’t lay their hands on $1,000 - that’s a fact,” he said.
“So, it’s endemic right across the world.”
Despite this, Mr Lowe said that a minority of people in Ireland have significant sums stashed away in savings.
“We’ve €150 billion here in Ireland - including the €4.4 billion in prize bonds alone,” he said.
“Don’t forget, they tripled the prize fund last October there.
“So, we’re swimming in cash basically.”
Counting banknotes. Picture by: Alamy.comMr Lowe said that in an ideal world, every household will have at least three to six months of income saved that can be used in case of an emergency.
“You should have it for three reasons,” he said.
“Number one, the emergency - your clutch goes or your automatic transmission, whichever it is.
“Secondly, sudden loss of income - you’re put on a three-day week or you don’t get the bonus that you’re expecting.
“The third reason is the investment opportunity you might come across [ comes to nothing] or you might want to give your son or daughter a leg up on the property ladder.”
Buying a house
For young people especially, being able to save large sums of cash is essential if they ever want to get on the property ladder.
“A lot of young adults who are trying to save, they’ll go to their respective lender and they’re told, ‘Have you got a savings record?’ ‘Yes I do and we’re saving €1,500 a month’ and you show them the statement,” Mr Lowe said.
“Then there’s a withdrawal of €7,500 - that was for a holiday they decided to have there a couple of months ago.
“Suddenly, they’re back to square one.”
A man walking past 'For Sale' signs in Dublin. Image: Leah Farrell / RollingNews.ieOne alternative is for a parent to make heroic efforts to save money on their child’s behalf.
“There's very few families who can afford to put that child benefit away,” Mr Lowe said.
“But if you were able to put it away, from the time it starts on birth to the time it finishes - which is the 19th birthday, you will have accumulated €30,240 without any interest,” he said.
“The problem is, to send one child to third-level is €42,000 - including accommodation.”
For those who do have the means to put such large sums away, it is advisable to put it into a savings account in which interest will accrue.
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Main image: A wallet. Picture by: Jens Kalaene
