One in three are struggling to make ends meet
Was Since Conducted Denis 5% Since Picture: The Has Minihane To Irish Cooled Inflation Report
A third of the population are "just getting by" financially, while 12% admit they would only be able to cover their costs for a month if hit by an "income shock", according to a new report.
The Competition and Consumer Protection Commission (CCPC) study has highlighted “deep concern” about the country's wealth gap, which has widened as cost pressures bite.
The report is based on interviews with 1,500 participants. While 58% said they were satisfied with their current financial situation, more than 33% of all participants included in the report said they were “just getting by financially”.
Among those with a primary education or less, this figure rose to over 50%.
“There are significant differences between age groups, with those over 60 showing greater financial resilience than those under 30, while lone parents and people with lower levels of formal education have the lowest levels of financial wellbeing in Ireland,” said Kevin O’Brien, member of the CCPC.
The report says while most people believe they could sustain their living expenses for three months or more in the case of a financial shock such as the loss of income, one in eight respondents admitted they would just be able to cover their costs for a month or less.
Lone parents and people in shared homes are among the least likely to have significant financial buffers in place, the report said.
These are some of the findings included in the CCPC’s 'Financial Wellbeing in Ireland: Financial literacy and inclusion in 2023' report.
It is the first in a series of reports delving into the financial health of the country, drawing on 1,505 interviews from December 15, 2022, to March 1, 2023.
Ireland’s economy is currently close to full employment, with the unemployment rate for June remaining unchanged on the previous month at 3.8%, but consumers still face challenges with rising inflation and interest rates.
Inflation has cooled to 5% since the report was conducted. The next report may subsequently be more optimistic.
The report also shows overall confidence in retirement plans among the respondents, but those aged 19-29 indicate they feel more vulnerable in terms of pension planning.
Meanwhile, the volatile economic environment led to higher savings in the March quarter as the CCPC said about 86% of Irish households squirrelled away cash, with most using deposit or savings accounts.
Men were more likely to engage in higher-risk saving such as the purchase of stocks and shares or investing in crypto-assets, over which the Central Bank has urged caution in recent months.
However, more recent figures from a Bank of Ireland survey show households are changing their attitudes to savings amid the cost-of-living crisis, and saving levels are falling back rapidly from their elevated levels during the pandemic.
The quarterly survey appears to confirm official figures that the households who were able to build up significant levels of savings during the covid years are now, for one reason or another, eating into their savings.