Clinton Flynn Chartered Accountants

Irish Disposable Income Continues to Shrink

Posted by Brian Flynn in General on 17 Oct 2011

 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.

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).