Less people saving and more worried about risk of global recession – BOI

Cost of housing/rent and inflation remain prominent

Bank of Ireland’s Savings and Investment Index fell back in Q2 2025, with a drop in both the proportion of people who say they are saving and in those who believe they are saving enough.

The Savings and Investment Index dropped to 87 in Q2 2025, down from 94 in Q1.

While investment habits remained largely unchanged, with an increase in the amount being invested compared to the previous quarter, over half of consumers believe stock markets will be lower in the next six months.

The risk of a global recession has emerged as the biggest concern for Irish households, jumping ahead of both the cost of housing/rent and inflation, as geopolitical events also take centre stage.

Concerns about a global recession were the number one concern for 21% of those surveyed, up 8% from the Q1 survey. The concern is highest amongst those aged 30-59 (24%) and amongst professional/managerial groups (27%).

The cost of housing/rent continues to dominate concerns faced by younger age groups, with 28% of 16-29 year olds citing the cost of housing/rent as their biggest worry, while 24% of this age group see inflation and the cost of living as their biggest concern.

Kevin Quinn, chief investment strategist, Bank of Ireland, said: “The increase in concerns about global recession comes at a time when geopolitics has taken centre stage, so it’s the first time we’ve seen this come to such prominence in our survey.

“Global investment markets had experienced a steep downturn in April, and headlines about an effective trade embargo had dominated those weeks.

“Markets have recovered significantly since then with a powerful rally from mid April onwards but that hasn’t moved the dial for Irish households yet.

“With tariffs dominating public discourse up until quite recently and the Israel-Iran conflict now to the fore, it’s little surprise that these concerns are prominent.

“It’s also no surprise to see housing concerns and the cost of living remaining uppermost amongst younger age groups.”

Having reached a recent high in Q1, attitudes to saving dropped in Q2. The Savings Index was 87 in Q2 2025, down 9 since Q1 2025.

Quinn said: “There has been a discernible change in attitudes to saving. It appears we reached a peak for Quarter 4 ’24 and Quarter 1 ’25 surveys and a change is showing up this quarter.

“After eight interest rate cuts from the European Central Bank, many savers may feel that the rewards on offer are likely to drop.

“In addition, it is possible Irish households are saving less and spending more, with an eye on what tariffs might do to import prices.

“It’s a phenomenon that has been seen in a number of countries as tariff levels came to the fore of public debate.”

The Investment Index was 87, down 5 since Q1 2025.

The amount of Irish households who are investing has remained at a similarly elevated level for the third quarter in a row but attitudes here are shifting.

When asked if it was a good time to invest, there was a second drop in a row.

There was also a further drop in how people viewed the stock market for the coming six months, with 53% believing the world stock market would be down in the next six months compared to 44% in Q1 ’25 and 32% in the Q4 ’24 survey.

“The experience that most people have had with investing over 2023/24 has, in general, been very positive.

“With almost 50% gains made in global equities in 2023-2024, there is little surprise that more people have the investment habit than ever before.

“However, 2025 has been a completely different experience for most people as the equity market took a significant downturn in response to tariffs and the unpredictability of the new US administration’s policy.

“By early April a global equity portfolio had seen losses of 15% and this has clearly influenced how people viewed the prospects for investing.

“That we have seen a powerful recovery of most of the losses since then will take time to filter into people’s attitudes,” said Kevin Quinn.