Second Irish League Of Credit Unions ‘What's Left’ Tracker 2012
Media Release: 09 July 2012
1,820,000 left with €100 or less each month after bills are paid
Half of bank account holders (50%) are unaware of what their bank is charging to operate their current account
54% of current account holders have no idea what they pay in charges if overdrawn on their account
46% of those with a credit card do not know the interest rate charged on their card
Irish consumers owe on average €1,100 on their credit card
25% of credit card holders rely on their credit card to make ends meet each month
40% have borrowed to pay their household bills in the past 12 months, 10% using moneylenders
The Irish League of Credit Unions (ILCU) has today announced the launch of their second 2012 ‘What’s Left’ tracker. Carrying on from the 2011 series, the 2012 trackers will record household expenditure, how much disposable income Irish people have this year, where they are spending their money and the financial hardships they are facing.
In April, the ILCU launched the Fix your Finances project and introduced four independent cases studies all of whom have their own financial concerns and challenges. The case studies can be followed through the website www.fixyourfinances.ie where updated video diaries, pictures and information will be available.
In the coming months, an independent financial advisor will be brought in to advise each case study how to better manage their finances in the hope that by the end of 2012, each case study will have a better, more organised approach to money management. (Jump to the attached document for more information.)
June 2012 ‘What’s Left’ Tracker Findings
Disposable Income
1,820,000 left with €100 or less each month after essential bills are paid. This shows an increase on the April tracker figures. Irish disposable income in Ireland has dropped in the past three months since the April 2012 tracker was recorded, with 69% having less than 12 months ago (2011).
|
Money Left: |
Adults (6/2012) |
Working Adults (6/2012) |
|
None |
17% (602,000) |
14% (252,000) |
|
<€20 |
6% (220,500) |
5% (90,000) |
|
€21-€50 |
13% (444,500) |
11% (198,000) |
|
€51-€100 |
16% (553,000) |
15% (270,000) |
|
€101-€150 |
11% (399,000) |
12% (216,000) |
|
€151-€200 |
8% (259,000) |
8% (144,000) |
|
€201-€250 |
4% (154,000) |
6% (108,000) |
|
€251-€300 |
5% (175,000) |
5% (90,000) |
|
€301-€350 |
3% (91,000) |
3% (54,000) |
|
€351-€400 |
2% (59,500) |
2% (36,000) |
|
€401-€500 |
5% (175,000) |
6% (108,000) |
|
€500+ |
10% (367,500) |
14% (252,000) |
|
AVERAGE (per person): |
€168 vs. €178 |
€200 vs. €208 |
Sentiment
Consumer sentiment has weakened among those with less that 5% of their income left at the end of the month after the bills are paid. 87% now worry about how they will cope if unforeseen expenses arise (increase from April figures of 84%). These vulnerable consumers also show greater concerns over their ability to continue coping financially if further changes are made to social welfare or income tax (increase to 81% in June from December figures of 71% and April figure of 73%). Additionally 61% (vs. December 2011 59% and April 57%) agreed that they are currently living to work as opposed to working to live.
Bank Charges
Half of bank account holders (50%) are unaware of what their bank charges to operate their current account. In addition, 54% of current account holders have no idea what they pay would pay in charges if their account is overdrawn. Of those that are aware of bank charges, the majority of (41%) try to maintain a minimum balance on their account to avoid bank fees while a further 13% reduce or limit transactions to meet their banks requirements. 13% would increase transactions to meet bank requirements and a further 15% have switched to another bank for lower banking charges.
Credit Cards
62% of the population have some form of loan exposure. 39% of Irish people are exposed to credit card debt. 25% of those with a credit card depend on it to make ends meet each month. 28% of those with credit cards miss payments. 34% only make the minimum payment on their card each month. The average amount owed by Irish consumers on their credit card is €1,100. Worryingly only 54% are aware of the interest on their credit card, meaning 46% do not know their credit card interest rate.
Essential Bills
Mortgage and rent continue to be the most expensive bills for the majority of Irish adults (72%). Groceries remain in second place (57%). Utility bills remain in third position (54%). Transport and car related costs retain their position in fourth place with loans and repayments moving up the list into fifth place (increase to 27% in June from 21% in April).
79% claim their electricity bills have increased in the past 12 months (by €39 on average). 75% claim that their gas bill has increased in the past 12 months (by €40on average). 42% claim their cable TV bill has increased in the past 12 months (by €8 on average) and 73% claim that their health insurance has increased in the past 12 months (by €68 on average.)
40% of consumers have had to borrow to pay their household bills in the past 12 months. Of this group, the largest proportion rely on financial help from family and friends, 30% use the credit union 10% rely on their bank and 10% on moneylenders.
Delayed Bill Payments
47% of consumers struggle to pay all of their bills on time. This figure has remained the same since the April 2012 tracker was recorded. TV license (17%), TV/ telecoms (8%), bin charges (7%), and electricity (7%) are the bills most likely to be put off by consumers. 44% of those who cannot pay their bills on time are very stressed and worried.
Work Related Expenses
Child care comes in as the greatest work related expense at €520 per month on average (of those with children), this is followed by car fuel (€145) per month, daily lunches (€110) per month and public transport (€77) per month.
Commenting on the new 2012 ‘What’s Left’ Disposable Income Tracker ILCU CEO Kieron Brennan said: “The issue of personal debt is something we are hearing more and more about and the issue is a growing concern, particularly for those who are relying on their credit card to make ends meet every month. Many of this group may not be in a position to pay off their credit card bills in full each month and will be subject to high interest rates. Worryingly in this tracker only 54% know what interest rate is charged on their credit card. We would urge people to take some time to understand their bank charges and credit card interest rates and certainly look at their personal and household budgets to ensure that these costs are covered.
Even more concerning is that of those who are borrowing each month to meet payments on their household bills, 10% are turning to moneylenders. The ILCU recently called on the Government to put a legal cap on the interest rates charged by moneylenders in Ireland. No such cap currently exists but in practice, the ceiling is just below 190% APR. With the level of personal indebtedness and financial exclusion in Ireland, there is a real danger of compounding the problem by allowing legal moneylenders to charge excessive rates.”
He concluded: “For consumers in general, it has never been more important that they really begin to get into the practice of managing their money very, very tightly, keeping finances on track is a mix of being diligent and shopping around for the best value. The credit union smart phone budgeting tool MYBUDGETBUDDY is an easy-to-use budgeting application that helps you understand and manage your income and expenses and is available to download from the Android market and itunes. For those of you who do not have smart phones we have tips and a budget planner to download on creditunion.ie/whatweoffer”
HIGHLIGHTS BELOW
Notes to Editor
About the Tracker Survey
The survey was conducted by Market Research Company iReach during the period of June 2012 using the iReach Consumer Decisions Research Panel which delivered 1,000 responses from adults in Ireland aged 18+ to 65+ and is nationally representative by Age, Region, Gender and Social Class. This research has a confidence level of 95% and confidence interval of 4%.
About the Irish League of Credit Unions
The Irish League of Credit Unions is the representative body for over 493 Credit Unions on the island of Ireland. It is Ireland’s successful, not-for-profit, financial co-operative.
For further information, or to speak to one of the case studies, please contact Emma Casey, ILCU Communications Department 01 614 6781 / 087 688 1571
Highlights from the second 2012 ‘What’s Left’ tracker undertaken by iREACH Market Research on behalf of the Irish League of Credit Unions.
If you have to borrow to pay for your monthly household bills, where do you borrow from?
|
Forced to Borrow Money to Meet Household Bills this Year: |
6/2012 |
|
Credit Union |
30% |
|
Bank |
10% |
|
Money Lender |
10% |
Do you have a loan, if so what type of loan do you have?
|
Type of Loans |
All Adults |
|
Credit Card |
39% |
|
Credit Union Loan |
18% |
|
Personal Loan |
15% |
|
Bank Overdraft |
54% |
|
Hire Purchase |
4% |
|
Moneylender Loan |
3% |
|
Other |
2% |
|
None |
38% |
Are you aware of current account / overdraft fees charged by your bank?
|
All Adults |
Awareness of Bank Fees |
Awareness of Overdraft Fees |
|
Yes |
50% |
46% |
|
No |
50% |
54% |
Of those that own a credit card – do you know the interest rate charged by your provider?
|
Credit Card Owners |
Awareness of Interest Rate on Credit Card |
|
Yes |
54% |
|
No |
46% |
What if any measures have you taken to avoid or limit current account fees?
|
Measure you take to avoid charges |
All Adults |
Aware of Fees |
|
Maintained a minimum balance on my account |
35% |
41% |
|
Reduced or Limited my transactions to meet bank requirements |
13% |
13% |
|
Switched to another bank with lower charges |
11% |
15% |
|
Increased number of transactions I make each month to meet bank requirements |
10% |
13% |
|
Used my CC for transactions an pay it off monthly instead of using my current account |
10% |
12% |
|
Joined the credit union |
7% |
6% |
|
Closed my current account |
4% |
5% |
|
Got rid of my debit / ATM card |
3% |
3% |
|
Switched to a foreign bank |
1% |
1% |
|
None |
40% |
33% |
Sentiment of those with less than 5% of their income left after bills are paid
|
Those who have 5% or less income left after bills |
Agree 3/11 6/11 9/11 12/11 3/12 6/12 |
|||||
|
I worry how I will cope in the future if unforeseen expenses were to arise |
83% |
85% |
83% |
82% |
84% |
87% |
|
If any further changes were to be made to social welfare / income tax I won’t cope |
74% |
82% |
71% |
71% |
73% |
81% |
|
I’m living to work as opposed to working to live |
60% |
62% |
57% |
59% |
57% |
61% |
|
I do not see a future for myself/my family in Ireland |
36% |
45% |
38% |
41% |
41% |
41% |
|
With changes to the minimum wage I would be better off not working |
30% |
43% |
41% |
33% |
31% |
38% |