ILCU announce results of third 'What's Left' Disposable Income Tracker Index
Media Release: 17 October 2011
Irish Disposable Income Continues to Shrink
2% increase in the number of Irish adults who have approximately €70 per month left after essential bills are paid
Eight in ten Irish adults are worried about energy cost increases this winter, with 25% saying they will not be able to cope with the increases
15% of adults will have to dip into their savings to cover increases in energy bills.
Nine in ten adults are concerned about the upcoming budget and the effect it will have on their income. 61% are most concerned about increases in income tax
The Irish League of Credit Unions has today announced the results of the third 2011 ‘What’s Left’ disposable income tracker index. The tracker index records how much disposable income Irish people have this year, where they are spending their money and the financial hardships they are facing.
*** Note: While there have been percentage increases and decreases in some of the figures in the September tracker, some of these percentages fall into the margin of error associated with this kind of tracker research. A clearer picture of the actual increases or decreases will not be clearly defined until all of the 2011 trackers have been recorded.
Disposable Income
The study shows that overall 63% of all respondents felt that their disposable income has reduced since this time last year (2010). Irish individuals and families are still struggling as Irish disposable income continues to shrink. The findings show that in September, 8% were not able to cover their essential bills. There has also been a jump in those with nothing left after they pay their essential bills (up from 7% in June to 12% in September). In addition the survey found that there has been an increase (to 25%) in those making do with only €70 per month after essential bills like mortgage and rent are paid.
Concern over Increasing Energy Costs….
Of most concern to people surveyed are the impending increases in the cost of energy, as the country prepares for winter. Eight in ten Irish adults are worried about the increased energy costs they are set to face. Only one third of Irish adults have taken steps to plan for the increased costs – for example possibly switching suppliers, putting additional money aside or planning ways to reduce energy usage.
25% stated that no matter how much they plan, they will not be able to deal with any increases to their energy bills. Almost 15% will have to dip into their savings to fund increases with a further 7% relying on social welfare benefits and 5% on credit cards and 2% turning to moneylenders.
Budget 2012
The upcoming 2012 budget is also causing a great deal of concern to many Irish adults, with nine out of 10 worried about the outcome. The majority of those surveyed – (61%) are most concerned about increases to income tax, followed by changes to social welfare (19%) and fuel increases (12%)
Saving
48% of Irish adults continue to find it difficult to save money in the current environment. There has been a slight increase in those that are likely to save (36%) and an increase in the amount saved (increase from €195 in the June findings to €210 in the September findings).
Positivity
On a slightly more positive note, the survey indicates the possible beginning of an improvement in public outlook, with more people, while still finding the current environment challenging, are better able to deal with their finances than earlier in 2011. There has been a slight drop (83% in September down from 85% in June) in the number of respondents, with little or no income (1-5%) left after paying for essentials, who worry about how they will cope if any unforeseen expenses occur. 71% of those with little or no income left after essentials said they could not cope with any changes to welfare and income tax, down from 82% in June. The survey also found that more people are managing to pay their bills on time than 3 months ago (up from 53% in June to 58% in September).
Commenting on the third ‘What’s Left’ Disposable Income Tracker ILCU CEO Kieron Brennan said: “The September ‘What’s Left’ tracker shows us that disposable income continues to shrink for the Irish public. Like our tracker in June, this third round is a further indication of just how hard the ordinary people of Ireland are being hit by increasing household expenses.
Of greatest concern is the impending increases to energy bills which will hit families hard in the coming months and there is a worry that many will not be adequately able to heat their homes this winter as a result. We are urging people to stay on top of this, look across the range of suppliers and find an option that best suits them and also look at ways in which you can reduce your energy usage over the coming months. This year’s Budget is also causing much anxiety among Irish adults with many very worried about how any increases in income tax will affect their already stretched incomes.”
He added: “As we move into the winter and Christmas season, we are advising people to take a moment, sit down and look at what their expenses are likely to be over the coming three months - where are the areas that you will need to concentrate on and where can you reduce spend. As always the credit union is happy to help and advise you on putting together a budget / financial plan.”
Highlights from the 3rd ‘What’s Left’ tracker undertaken by iREACH Market Research on behalf of the Irish League of Credit Unions. Statistics are given with population equivalents where possible.
Essential Bills
The highlights from the ILCU ‘What’s Left’ tracker found again that as expected respondents stated that mortgage and rent were the largest / most important bills for respondents (75%). This is followed by utilities (56%) and groceries (55%). Transport / car (26%), loan repayments (28%), credit cards (24%) followed by health insurance (18%) and education fees (11%).
Of all respondents:
8% or 280,000 believe that their disposable income does not even cover their essentials.
12% or 420,000 have nothing left after paying their essential bills.
25% or 875,000 now have approximately €70 left each month after essential bills are paid.
18% or 630,000 have 6-10% of their income left after paying for essentials.
20% or 700,000 have 11-20% of their income left after paying for essentials.
Those who have enough to enjoy themselves (20% of their income left) has reduced to 17% or 595,000
Of those that work
6% or108,000 workers find their disposable income does not even cover essential bills while a further 12% or 216,000 have nothing left after they have paid their essential bills
25% or 450,000 have1-5% of their disposable income left after paying their bills.
18% or 324,000 have 6 -10% of their disposable income left after paying their bills.
20% or 360,000 have 11-20% of their disposable income left after paying essential bills.
19% or 342,000 have 20+% of their disposable income left after paying essential bills.
Of those that have 5% or less of disposable income left each month:
83% of those that have less than 5% left worry about how they will cope if unforeseen expenses arise
57% of those that have less than 5% left agreed that they are living to work as opposed to working to live
71% of those that have less than 5% left fear that they will not be able to cope if there are any further changes to social welfare / income
38% of those that have less than 5% left do not see a future for themselves or their family in this country
41% of those that have less than 5% left believe that with changes to the minimum wage they would be better off not working.
ECB Rate Increase (July) / Further Rate Increases
47% have been significantly affected by the July ECB rate increase.
Saving: 48% are unlikely to have money to save in the current economic climate, this is on par with the June findings
36% are able to save in the current environment, a marginal decrease on the June figures.
The average person able to save money can now save €210 each month, this is up on €195 from June.
Changes from this time last year
63% now believe that their disposable income has decreased from this time last year