Wednesday, 18 July 2012

Round 2 – What's Left Tracker Index

The growing impact of continued austerity has resulted in increasing financial pressure on many Irish households. These pressures has been laid bare for all to see in the recent ‘What’s Left’ tracker survey published by the Irish League of Credit Unions.

There are many worrying aspects to the survey, with personal indebtedness now becoming a serious concern for many with over use of credit cards, outstanding bank loans and use of moneylenders some of the pressures people are dealing with.

Mortgage and rent are the biggest expense facing households followed by groceries, electricity and gas bills as well as transport expenses. However, it is now apparent, as the survey shows, that paying our household bills like ESB, gas and TV on time is becoming a serious struggle for many. We have found that many are delaying paying bills like television license, phone, bin charges and electricity in order to free up some cash.

This struggle is also placing a burden on families and individuals with over 40% of people saying that they suffer from stress because of the financial pressure they are under. The simple fact is that more and more of us are borrowing every month to make ends meet and running the risk of being caught in a cycle of debt that could take years to break out of.

The tracker survey found that people are finding it increasingly difficult to balance their books. The grim reality of the downturn comes across in a number of findings - 1.8 million people have €100 or less left when they pay their bills each month, while two thirds of us have less money than this time last year.
It is perhaps not surprising that people are literally looking for any port to shelter from the economic storm and have made choices which may ease the burden in the short term, but in reality only lead to more long term problems with months or even years of costly repayments.

Many people have taken out loans and are over using credit cards while being completely in the dark about the charges involved. Half of those surveyed do not know the charges banks put on current accounts including the extra fees for being overdrawn. Four out of 10 owe money on their credit card with a quarter relying on it to meet their needs on a monthly basis.

Moneylenders also have a firm grip in many communities. Of those that borrow to pay for essential bills, 10% of people surveyed use moneylenders, often paying excessive charges. Licensed moneylenders in this country are charging up to 190% APR and that’s not even to mention the rates charged by illegal, unlicensed moneylenders, who target those most in need.

The ILCU have called on Government to immediately address the issue of moneylenders by placing a legal cap on the interest rates charged by licensed moneylenders. We believe that excessive rates will only prolong the problems facing Irish people on daily basis.

As a movement, credit unions encourage people to examine where their money is being spent, how much of it is being used, not to pay bills, but to simply pay off loans and charges. It is our hope people look at the findings of the tracker, they will see the need to manage their money better and not get deeper and deeper into debt. Local credit unions have a role to play here too and will attempt to assist people in their communities by offering affordable options to help people make ends meet.

If people out there find that the are coming under increasing financial strain, they can visit their local credit union and meet one of our trained staff and volunteers and see what affordable options are available to meet their needs. Anyone can come and speak to the credit union safe in the knowledge that we are community based and exist solely to meet the needs of our members. At the credit union we pride ourselves on doing things differently and ensuring that in everything we do, our members matter most.