A new survey shows that demand for savings has been exceptionally strong, reflecting the lockdown environment during the first quarter of the year.

The Bank of Ireland Savings and Investment Index reached its highest level in the first quarter of this year since 2018, increasing to 103 from 98 in the fourth quarter of last year.

Bank of Ireland said that 51% of people see it as either a good or a very good time to save compared to just 38% in February last year before the pandemic began.

This number reaches 56% for those under 50 compared to 43% pre-pandemic, Bank of Ireland added.

44% of people also said they believe they are still not saving enough. This compares to 55% pre-pandemic and is perhaps reflective of the level of savings that has taken place during this past year.

Kevin Quinn, Chief Investment Strategist at Bank of Ireland, said the increase in savings in the Irish economy is likely to be a tailwind to a consumption boom in the coming year.

"With nearly €16 billion amassed in savings since the start of the pandemic, Ireland has experienced exceptional growth in savings - an experience it shares with the rest of the developed world," Mr Quinn said.

"Alongside supportive monetary policy and expansive fiscal policy, the release of pent-up savings will, I believe, provide a further impetus to strong growth later this year - both here and internationally," he added.

Mr Quinn also said it is hard to predict how fast these surplus savings will be run down, but it is inevitable a significant portion will be spent once reopening begins.

"If we look across the Atlantic, with vaccinations at a more advanced stage, and an estimated $2 trillion in incremental savings amassed during the pandemic, the evidence is already apparent that consumers are beginning to splurge with retail sales surging," he said.

"We can expect to see something similar in the months ahead in Ireland. That said, it's also an uneven recovery with many continuing to struggle," he added.

Meanwhile when asked about attitudes to investing, Bank of Ireland said that more people believe now is a good time to invest compared to a year ago.

In February 2020, 23% of people saw it as a good time to invest whereas by March 2021 that figure had grown sharply to 33%.

Kevin Quinn said the increased interest in investing is partly due to an increasing awareness of returns that have been achieved in particular in equity markets in the year since the pandemic.

"There is also a growing optimism that the recovery will be very robust, which should be supportive of investing for the longer term," Mr Quinn said.

"Many individuals and companies are looking for solutions to the low or negative environment currently being faced. It is an area in which we are advising increasing numbers of customers on a daily basis how to adjust using solutions from the investment world," he added.