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Bank of Ireland research defies predictions and shows more SSIA holders than ever will not splurge their savings

Cars, holidays and home improvements are top three spend items

Figures released today (Thursday, 29 th September 2005) by Bank of Ireland reveal that there has been a significant reduction in the number of Bank of Ireland SSIA holders who intend to spend all of the proceeds of their SSIA at maturity. This number has fallen from 17% in October 2004 to just 7%, in direct contrast with the speculation that the economy will be flooded with cash when the scheme ends.

The research also revealed that the proportion of Bank of Ireland SSIA holders who intend to invest all of their SSIA savings with a financial institution has risen from 11% last year to 21%. The number intending to save some and spend some is down slightly from 25% to 21%.

However, the most significant finding is that the number of people who have yet to make a decision on what they will do with the proceeds of their SSIA, or will seek financial advice before deciding still remains quite high at 47%, compared to 46% in the previous research.

The research, carried out by Lansdowne Market Research on a nationwide sample of SSIA holders follows research on Bank of Ireland's own SSIA customer base, conducted in October 2004. This latest research sought to establish if SSIA savers' intentions had changed as the maturity of these accounts draws closer.

Commenting on the figures Ronan Headon, Head of Savings, Bank of Ireland said: “This research supports our view that there will be a huge amount of people requiring financial advice as SSIAs mature between May 2006 and April 2007. We would strongly encourage people to seek advice before making a decision and ensure they look at the wide variety of options rather than making a decision to spend it all. Equity based product holders should be particularly cautious about cashing in early as the potential returns are much greater if their investment remains intact for a period of seven years or more.”

The research also showed that there is a significantly higher holding of equity SSIAs among men. 60% of equity SSIA holders are men, compared with a figure of 49% of all SSIA holders. There is also a significant difference in how men and women intend to spend the proceeds of their SSIA.

While cars, holidays and home improvements feature prominently on the list of likely expenditures for men and women, a much greater proportion of female SSIA holders intend to spend their savings on these three items. Buying a car tops the list for 42% of women who have decided to spend their SSIA savings, compared to only 25% of male spenders.

What do you intend buying with your SSIA money when the scheme ends?

Overall

Women

Men

Car

34%

42%

25%

Holidays

27%

32%

22%

Home Improvements

26%

31%

21%

Deposit for Home

10%

11%

9%

Education

7%

7%

7%

Items of spending which feature more prominently for male spenders are clearing mortgages/loans (14%), deposit for investment property (9%) and deposit for a house for children (6%).

Ronan Headon went on to say “Our review of our own SSIA customer base indicates that men are generally making higher monthly contributions than women. However, this research shows that overall the level of uptake of the scheme, as well as future saving and spending intentions are broadly similar for men and women. The only significant differences arise when comparing what male and female SSIA spenders will spend their money on.”

67% of SSIA holders interviewed stated that they intend to continue saving when the scheme ends, showing that SSIAs have had significant success in creating a savings habit. The prospect of a potential government incentive to transfer some of their SSIA proceeds into a pension would appeal to 45% of SSIA holders, with 49% of men saying they would be likely to avail of such an incentive compared to 40% of women.

“While many people have very different ideas of how they will use their SSIA savings, a significant number haven't made a decision. Regardless of what people are intending to do with the money, we would strongly encourage SSIA holders to continue saving regularly when the scheme ends, which many have said they will do” concluded Ronan Headon.

 


 

 



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