The Bank of Ireland/ESRI Retirement Optimism Index, which tracks how confident people feel about their financial prospects, increased to 104 points in May, the highest increase since the index's launch.
May's results showed that 57% of Irish people have some financial plan in place for retirement, the highest response since the question was initially asked in November 2017.
The improvement was most visible amongst people under 50 where 49% said they had some retirement planning in place.
May’s results also showed a rise in the number of people that felt they could live comfortably in retirement from a financial perspective.
Overall one-third of people felt it would be easy to live comfortably in retirement. Again, this increase was led by the under 50s.
31% of under 50s felt they could live comfortably in retirement which is slightly lower than the 34% response for over 50s.
Tom McCabe, Bank of Ireland Investment Markets said: "The improvement in confidence among under 50s is particularly encouraging. However the proportion of this group with some retirement planning in place was still less than 50% and ideally this number should be higher."
Whilst the savings Index increased slightly, this was countered by a cooling in sentiment towards investment on the back of ongoing concerns about a global trade war and rising political instability in the Euro zone.
Tthe monthly Savings Index increased from 103 to 104 in May, on the back of by a slight rise in the Savings Attitudes sub-index. Saving patterns remained strong in May with 51% of people saying they saved regularly and another 18% answering that they occasionally saved.
Regular savings patterns remained particularly strong amongst the under 50s with 57% answering that they regularly put money away.
In the Savings Environment sub-index 42% of people felt it was a good time to save in May, up from 39% in April. However there was a marked divergence in views across the age groups with only 35% of over 50s feeling it was a good time to save, a full 11% lower than the under 50s.
Like its savings counterpart, the Investment Index measures peoples’ attitudes towards investing and how they view the investment environment. The monthly Investment Index decreased to 98 points in May from 100 driven by a fall in the investment environment sub-index.
Only 30% of people saw it as a good time to invest in May, compared to 34% in the previous month. However a larger percentage (34%) felt it would be a better time to invest in six months time, suggesting that people feel that these geopolitical and trade threats should fade in time.
After rising in April, peoples’ views on the investment environment weakened in May. The spectre of rising political instability in Italy and Spain, the US exit from the Iran nuclear deal and continued concerns about a global trade war all seemed to weigh on investor sentiment in the month.
Tom McCabe, Bank of Ireland Investment Markets said: "At first glance, it is a little surprising that Irish peoples’ views of the investment environment weakened in May, the strongest month so far this year for stock market returns with a gain of 3.6%."