Sunday 4 December 2016

Middle classes and families hit hardest by soaring costs

The cost of living has risen and risen awfully fast. The Sunday Independent/KBC Bank survey reveals who is feeling the squeeze most and which people are still avoiding most of the pain, writes Nick Webb

Published 12/06/2011 | 05:00

Young Families: Up 3.5% since December,National average up 2.1% since DecEMBER

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Young families are being pulverised by rampant inflation, especially with unprecedented price hikes since December, according to the latest Sunday Independent/KBC Bank Cost of Living survey.

The increases represented the largest price jumps since the survey began in October 2008. Young families' living costs have increased by nearly 70 per cent more than the national average, fuelled by the 9 per cent leap in fuel prices since December as well as the monster 8.8 per cent spike in mortgage interest. Bunging the kids into a creche or other childcare sucks up a major slice of any household budget but that monthly outgoing is now even bigger as prices have risen by 1.4 per cent in the last year. Visits to the doctor and other medical expenses are much dearer too, rising an extraordinary 4.8 per cent since December. Food costs have risen too, with ice-cream 3.4 per cent dearer than it was a year ago, frozen chips up 1.8 per cent and breakfast cereals up a stonking 8.5 per cent in a year. Over a full year, the average cost of living for these young families has leapt by 5.7 per cent, more than double the national average.

First-time buyers

Up 3.3% since December

National average up 2.1% since December

Can things get any worse for the increasingly less wealthy people who bought houses in the last couple of years?

Apart from the grim prospect of living in a half-finished housing estate in Port Laoise and the albatross of negative equity, these poor suckers have seen their cost of living sky rocket by 3.3 per cent since December. That's well above the national average and approaching rates last seen in Zimbabwe. The main driver for this unsustainable jump in the cost of living has been the 8.8 per cent increase in mortgage interest rates since December. It looks even worse over two years with rates up 32 per cent. Ouch. With the interest part of mortgage repayments making up almost one-third of all household outgoings, this is going to go boom. Commuting is also hurting, with fuel prices up 9 per cent since December. But at least buying furniture is cheaper, with prices down 3 per cent since Christmas. Dishwashers or vacuum cleaners are also less expensive.

THE MIDDLE CLASSES

Up 2.6% since December

National average up 2.1% since December

There'd be riots on the street if the middle classes weren't so conservative. The cost of living for those in the professional classes has shot up by 2.6per cent since December, well above the national average. Having the chilled bottle of a glass of Prosecco costs more, with booze prices up 3.9 per cent. Dinner parties are also dearer as food costs are up 0.7 per cent since December and up one per cent in the full year -- unless you serve bangers and mash, with potatoes falling by 20 per cent in a year and pork down 5.4 per cent. Apart from the massive hike in mortgage interest rates for the red brick in Ballsbridge, a major outgoing is filling up the Range Rover. This costs crazy money now, as petrol prices are up 9 per cent. Escaping from it all for two weeks in the sun is now 2.8 per cent more expensive, with package holidays edging upwards in price.

Having fewer wrinkles than Simon Cowell is also more expensive with botox, medical costs and outpatients' services rising 4.8 per cent in the last six months. But other skincare products are slightly cheaper over the last month. Dental care is 2.7 per cent cheaper over 12 months. Alternative medicine costs have slipped slightly over the last month but are up 0.7 per cent in a year. Restaurants are about 0.7 per cent cheaper than they were a year ago but flashy jewellery is 5.8 per cent dearer. But keeping the kids at the posh private school or in university isn't as dear, with education costs down 0.5 per cent since the turn of the year.

STAY-AT-HOMERS

Up 1.7% since December

National average up 2.1% since December

Why would you ever leave home? The late twentysomethings and early thirtysomething who still live at home with their parents are having a great time. No nasty hikes in mortgage interest or house insurance for them. But booze is getting dearer; especially spirits which have leapt 3.4 per cent in the last month alone, beer is also up by 0.2 per cent over the same period. Going out is cheaper with restaurant prices falling 0.7 per cent over the last 12 months but night clubs have fallen even faster, tumbling 13.7 per cent over the year. Being slick is also easier with shoes and clothes much cheaper and getting the Jedward look also less expensive with hair products falling by 0.9 per cent over the year. Poking away at the latest iPhone, iPad or other "must have" gizmo is a bit dearer with communications prices up a full one per cent in six months. Newspapers and magazines are 0.3 per cent cheaper.

PENSIONERS

Up 1.5% since December

National average up 2.1% since December

Pensioners are the only people with any money these days and their position is helped by the fact that their cost of living has risen at a much lower rate than the national average.

Food prices have increased sharply in the last month with biscuits up 2.6 per cent and jam up 2.8 per cent. But sausages and pork are 4.4 per cent cheaper. Alcohol is 3.9 per cent dearer. Insurance prices have also gone through the roof, up 15.9 per cent in the last 12 months. Electricity, gas and other home heating costs have also risen by 3.1 per cent since December. While vitamins and over-the-counter medication was slightly cheaper, the cost of prescribed drugs rose by 0.3 per cent in the last month. Playing scrabble or other board games is slightly more expensive, increasing by 0.3 per cent last month with books also 0.2 per cent dearer in the last month. Museums and other cultural admittance charges are also slightly up over the last month. While vet charges have fallen slightly, the other costs associated with owning a pet have risen 0.1 per cent in the year, with gardening costs also up 0.4 per cent since May 2010.

SOCIAL WELFARE RECIPIENTS

Up 1.1% since December

National average up 2.1% since December

It's grim surviving on state handouts as the 440,000 unemployed are finding out.

Major cuts in social welfare payments are needed to fix the economy. It's going to get really nasty. But the estimated cost of living for those on welfare has only increased by half the national average, so there could be some wriggle room.

Welfare recipients have actually seen their living costs fall by 3.8 per cent over a two-year period, compared to an average national rise of 1.6 per cent. Shielded from massive hikes in mortgage interest, many of those on welfare are hit hardest instead by rises in food costs. Fizzy drinks are 9 per cent dearer with coffee up 5.6 per cent and tinned fruit up 10.4 per cent in a year. Home heating and electricity prices have also risen by 3.1 per cent. Shoe prices are up 1.2 per cent in the last month.

RENTers

Up 1% since December

National average up 2.1% since December

People living in rented accommodation have seen rents fall by 5 per cent in the last two years -- but that appears to be changing with monthly rents actually rising by one per cent since December.

Transport is cheaper, with air travel down 8.9 per cent in the last month and even buying a bicycle is 0.2 per cent cheaper over the last year. While food and alcohol costs are rising, there are major savings in household furnishings, with carpets and rugs down 6.6 per cent in the last year.

Heading off to see X-Men or Kung Fu Panda 2 is getting pricier, with cinema costs up one per cent in the year. Dry cleaning costs have slipped 0.9 per cent in the last 12 months. Smoothie makers or other small electrical appliances have also slipped in value, dropping by more than 3 per cent over a year.

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