A regular savings plan can offer more on return than a deposit account.
We talk to Michael McSwiggan of Zurich to explore the alternatives.
Recent research carried out by B&A (B&A Research, Covid-19 Consumer Sentiment Tracker Ireland Phase 2, April 2020) has suggested that people are consciously preparing for their future in ways they would not have previously. 71% of people desire some change and don’t want everything to return to the way it was before. Similarly, 55% of people are going to be more careful with their finances and will more closely question their spending habits.
This suggests that people are going to end up saving more than before. We have now experienced the ‘rainy day’ that we’ve always talked about and that experience prompting us to look to the future.
Regular Savings – let’s help prepare for a brighter future
Traditionally this market in Ireland has been dominated by cash deposits and savings accounts in the local Bank, Post Office or Credit Union. However, over the last number of years we’ve seen the beginnings of a shift towards regular savings with financially strong companies like Zurich.
There are a number of reasons for this shift, among them savers being more aware of alternative better performing flexible options – but perhaps the primary reason is the absolute zero/negative return people have seen on their hard earned funds on deposit.
Some banks are now charging clients to keep money on deposit!
Currently in Ireland there is over €100 billion sitting on various deposit type accounts across the major banks/credit unions earning absolutely zero! (*source Central Bank 2020).
So why set up a Regular Savings Plan?
- Children’s education – we think this is the primary reason why people save and I hope you’ve seen much of the supporting material we’ve produced over the years on positioning this.
- Many people are now looking to saving and preparing for a brighter future.
- Saving for a home deposit is becoming a family affair – with parents and even grandparents pulling together to help get their children on the property ladder. Recently we’ve seen a great deal of interest in our savings plans for this very purpose.
When is it best to save & invest?
So when is the right time for you to invest? Unfortunately, there’s no silver bullet answer! Risk = Reward We can try to calculate how investments will perform based on analysis of what’s happening in the global markets but it is not possible to definitively predict the future. These are volatile times, with investment markets subject to large swings over short periods.
Some savers are understandably apprehensive about dipping their toes in the market, with timing being a key consideration in investing. But regular savers can benefit from the concept of ‘unit cost averaging’ so a period of market volatility can actually be a good thing for regular savers.
Market timing can be a big dilemma, and investors can struggle with this. At Zurich we have a wealth of supports to help you along the way. These include:
– Regular market update commentary
– Flyers explaining the fundamentals of long-term saving and investments
– Videos and Podcasts
Making it easier to start a Savings Plan – New OnlineApply system
With the continued CoVid-19 guidelines of Social Distancing and less face to face interactions & more online forms of conducting business & communication, Zurich has launched a new OnlineApply system for Regular Savings which HFM clients can avail of. This removes the need for a ‘wet signature’ or the need for a digital signature provider such as Adobe or DocuSign – the customer validation is completely & wholly within the Zurich system. The policy is validated by email verification and code verification sent to your phone , similar to bank security methods.
Everyone has different financial goals and objectives so talk to your dedicated Hegarty Financial Advisor today.