This week the Irish League of Credit Unions (ILCU) published the third round of the 2012 ‘What’s Left’ tracker series. Like the other trackers that have been released throughout 2011 and 2012, they have been recording the challenges facing households in terms of expenditure, how much disposable income Irish people have, where they are spending their money and the financial hardships they are facing.
For many, the challenge to simply survive continues. Like we have seen over the past 12 months, disposable income continues to decrease with an increase of 35,000 in the numbers with just €100 or less at the end of the month. Half of consumers are now living month to month, with only 3 in 10 able to save any money at the end month. This is the lowest level of those in a position to save since the tracker began in 2011.
The increased cost of energy has meant that household heating and electricity bills are on the rise and will hit people hard this winter and of course there is concern over what Budget 2013 will contain and how it will impact already stretched incomes.
50% of consumers (up from 47% in June) are now struggling to pay their household bills on time and of those who fall behind in their bill payments 24% suffer from huge worry and stress.
Worryingly, in the past 12 months, 42% of consumers had to borrow money to meet their household bills (increase from 40% in June). 58% turned to family and friends and 24% used credit union loans to meet their household bills. The most concerning statistic here is the numbers turning to moneylenders – 10% in this October tracker. The rates of interest charged by the companies and individuals who engage in this type of business are huge and inevitably mean that many vulnerable people are stuck in a vicious cycle of debt.
Three quarters (75%) of homeowners have an issue with the property tax. 23% of home owners fear that they will not be able to afford to pay it. An additional 52% feel that the introduction of property tax is unfair since they already paid a property tax in the form of stamp duty. 10% think it is a good idea as most European countries have this type of tax, 15% believe that a property tax is a good idea but should be based on the value of the home.
Not surprisingly, 9 out of 10 adults (96%) are worried about the upcoming Budget and the impact it will have on their incomes. Irish people are most worried about income tax increases 47%) followed by changes in social welfare (16%) and fuel increases (14%). The top three are followed by VAT increases (7%), cuts to carer / disability allowance (3%) and further increases to university fees (4%).
8 in 10 adults (85%) are concerned about the increasing energy costs this winter. Almost 4 in 10 (38%) will struggle to manage and almost half fear that their household budget will be over stretched or they will be unable to cope with the increased costs. When funding the increased energy costs almost half (49%) will use their already stretched incomes, a further 13% will have to dip into savings while another 6% plan to switch to another utility provider in order to save money. 5% will rely on social welfare benefits and 4% will use child benefit.
Less than 3 in 10 people (29%) are able to save money on a monthly basis. This means that 70% cannot save any money and are living month to month. This is the highest level in the past 12 months. Of those that can save, the average amount that has been put away is €200, a slight increase (3%) on the June figure of €195.
Over two thirds of Irish people are already preparing for the expense of Christmas. 20% state that they will be seriously cutting back on expenditure this year, 16% have been putting a little away throughout the year, 15% said their income will cover it, 14% will dip into savings and 10% will use their credit cards. 7% stated that their family cannot afford the expense of Christmas this year, 2% will borrow from money lenders and a further 31% stated that they are not preparing in any way just yet.
I think people need to think long and hard about Christmas this year and whether they can afford to get caught in the buying frenzy that begins in earnest after the Halloween break. Remember to shop around for the best value and only spend what you can afford, sit down and work out a budget for the season before you start spending and stick to it.
As much as we had hoped for some element of positivity in this tracker round unfortunately the statistics don’t lie. Household incomes all over the country continue to be stretched and it will be a difficult few months ahead for many as the weather gets colder and the affects of the gas increases take root. We would urge anyone who is simply looking for money management advice, wants to enquire about a budgeting service or finds themselves in difficult financial situation to call in and visit their local credit union.
Thursday, 18 October 2012
IRISH CREDIT UNIONS JOIN 196 MILLION MEMBERS WORLDWIDE TO CELEBRATE
INTERNATIONAL CREDIT UNION DAY 2012
Members Matter Most!
This Thursday (18th October) Credit Unions all across Ireland will celebrate International Credit Union Day. This occasion is also shared with members from 51,013 Credit Unions which represent over 196 million members from 100 different countries. This year we decided that the theme is – “Members Matter Most”. We believe that this clear and simple message outlines what credit unions are all about, that in times of difficulty credit unions are there to serve their members.
International Credit Union Day has been a tradition dating back to 1948 when members dedicated the third Thursday of October to recognise the credit union’s history and achievements. The credit union movement in Ireland began in 1958 by three founding pioneers, Nora Herlihy, Seamus P Mac Eoin. and Sean Forde. These three ambitious people in the 1950’s acknowledged the effects of long term unemployment such as, sickness, malnutrition, money laundering, poor housing, and realized that this could be changed by the availability of funds and better money management. They believed that this would in turn create a system that would allow people to manage and control their finances in a whole new way.
We have come a long way since the establishment of the first Irish Credit Union in that we have the highest membership per capita at over 3.1 million members which are continually growing. This makes Ireland one of the most successful movements in the world which we are extremely proud of. There are 487 credit unions who are affiliated to the ILCU both north and south with total savings of €11.5 billion and total assets of €13.5 billion. Credit unions play an integral part in communities by employing over 4,500 people and more importantly over 9,000 people volunteer to continue the movements success.
In recent times people have been hit hard by the current economic climate, credit unions have been the heart of local communities by providing customers with financial services which are owned by the people for the people.