ILCU Launch Northern Ireland Household Income Tracker 2012
Media Release: 30 January 2012
65% of Consumers Fear 2012 will be more difficult than 2011
87% ration fuel in cold weather
44% have less disposable income than 12 months ago
150,000 people turn to Payday Loans and Moneylenders
£400 for 31days from Payday Company costs £129, from a Credit Union it’s £4
The Irish League of Credit Unions has today announced the results of its first Household Income Tracker for Northern Ireland. The findings show that people fear 2012 will bring increased economic challenges with a drop in disposable income, increased fears over fuel bills and large numbers turning to moneylenders and payday loans. Today’s findings are the first of a series of trackers which will be carried out across Northern Ireland.
Disposable Income
Almost two-thirds (65%) of people in Northern Ireland fear 2012 will be even more difficult financially than 2011. The belief that the economic challenges are about to become greater is leaving a quarter of consumers worried about their ability to manage their finances over the next 12 months. The tracker found that approximately 170,000 people (12% of all adults) have no money left after paying their bills, while 670,000 (44%) have less disposable income than this time last year.
Of the 35% of adults (493,000) who have less than 5% of their income left over after they pay their bills, over 400,000 worry about their ability to meet unforeseen expenses, while 296,000 fear about coping if income tax or welfare rates were to change.
Impact of Energy Costs
Fuel costs remain a pressing concern for people in Northern Ireland. 83% of consumers say the increased cost of energy and fuel has impacted on their spending ability. Almost nine in ten adults (87%) say they switch off heating during cold periods to save fuel.
Half of residents (51%) say they were forced to sacrifice other household spending to pay for fuel this winter.
A typical Northern Ireland consumer pays out £131 on fuel each month.
The continued public fear over the price of fuel has seen people turning to pay-day loan companies and moneylenders.
Moneylenders
The increase in fuel costs saw over 100,000 people (8% of residents) take out loans to cover their bills. Almost a quarter of these loans (23%) were taken from moneylenders.
A typical loan from a moneylender amounts to £300 with an average interest of 95% leading to a repayment of £586. 14% of those who took out a loan were unable to meet their repayments.
Pay Day Loans
40,000 people (4% of Northern Ireland residents) have taken a pay day loan to cover essentials such as food and bills – 26% of respondents who went to pay day companies did so to pay for food.
A quarter of these who took the loans were unable to meet their repayments on time.
Commenting on the first Household Income Tracker Northern Ireland, Rosemary O’Doherty of the Irish League of Credit Unions said: “The launch of the tracker is an important initiative by our movement as we identify the issues facing people, including our 409,000 members, in communities across Northern Ireland.
It is clear that people are expecting a year of new challenges and financial pressures. The fact that people have to turn to high interest loans from moneylenders and payday companies in such large numbers is of particular concern.
In the case of moneylenders loans are being offered which are up to 15 times more expensive than those available from local credit unions.
Payday loan companies are currently quoting loans of £400 over 31 days at a cost of £129 – the same loan from a Credit Union costs about £4.
I would again encourage anyone facing financial difficulties to speak to their credit union first. Unlike other lenders we are a not-for-profit community owned organisation and exist solely to meet the needs of our members.”
She finished by saying “In the coming months we will be publishing further trackers which I am sure will contribute to the general debate about the impact the general economic situation is having on people in Northern Ireland.”