Two-thirds of savers prefer government-backed bonds to riskier investments

Two-thirds of savers prefer to choose a zero-risk investment option such as a deposit or government-backed bond, according to a new survey.

The survey, conducted by iReach Insights, asked participants: “If you were given €5,000 but were told you had to save/invest it – what would you do with it?” More than 1,000 people took part in the exercise which was commissioned by Aviva Life & Pensions Ireland.

Two-thirds (66 per cent) would put the money on deposit or into a government-backed savings bond, while just over a third (34 per cent) would opt for an investment with some degree of risk such as the stock market, property or gold.

Women also appear more conservative than men when it comes to their savings, with just 28 per cent of those surveyed willing to consider putting their money into something with risk attached, while 40 per cent of men would favour this option.

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Eoin Kennedy of Aviva said: “The survey found that saving money in a deposit account is still the most popular choice for people if they had to invest a lump sum, with over a third choosing this option.

“However, it is somewhat surprising to find that even in this day and age more people would choose to save their €5,000 in a national savings bond (32 per cent) than in property, the stock market, or gold. In fact, more people would rather invest their money in a savings bond than the other options together, which speaks yet again to the very conservative nature of Irish savers.”

However, he added that savers who sit on a deposit will lose money over time when inflation is high.

“While saving into a deposit account might be the first thing that people jump to, it’s less likely they have considered that at a time of high inflation their money will actually lose value over time by sitting on deposit, resulting in a negative return on their savings,” he said.

“This is a key area in which people can benefit from taking financial advice as many people don’t realise that through investing their money in an asset they create an opportunity for it to grow which is so important at a time of high inflation.”