Sunday 23 April 2017

Most families yet to recover from austerity of the crash

Nearly half of the workforce is still worried about losing their jobs, more than eight years after the financial crisis erupted. (Stock picture)
Nearly half of the workforce is still worried about losing their jobs, more than eight years after the financial crisis erupted. (Stock picture)
Charlie Weston

Charlie Weston

Family finances have yet to recover after years of austerity, a new study has found.

Nearly half of the workforce is still worried about losing their jobs, more than eight years after the financial crisis erupted. Many fear they are likely to again face pay cuts.

Despite a pick-up in employment, spending and economic growth, the average family remains cautious and sceptical about the future, according to a new report on family finances from insurer Aviva.

The report found what it called "widespread insecurity among households about the extent of economic recovery" here.

This meant families were cautious about their spending heading into a new year and were uncertain of their future, according to the 'Aviva Family Finances Report'.

"While many acknowledge a recovery in the general economy is under way, a majority say it has not benefited them personally and a significant number worry about holding on to their jobs," the report said.

Aviva actuary Ann O'Keeffe
Aviva actuary Ann O'Keeffe

Households were uncertain and wary across a range of measurements, including job security, salary expectations, cost of living, work-life balance, and future finances. Although 40pc of workers expected a pay rise or a bonus, the same percentage feared a pay cut.

The survey, which involved a representative sample of 1,280 adults, was carried out last month when public sector workers were threatening strikes in pursuit of pay claims.

People between the ages of 55 and 64 were the most unconvinced about the recovery, despite the fact this age group was usually the most secure in their jobs.

A large number of people acknowledged the economic recovery was under way, but a majority said they were not benefiting personally from the pick-up. Belief in the recovery was strongest in Dublin and Leinster.

Also feeling better off were the already affluent, known as AB1s in social demographic terms.

Only 9pc of 55 to 64-year-olds said they were experiencing the recovery, compared to 26pc of 18 to 44-year-olds. Fearful households were saving as a precaution.

Some 58pc agreed that fear about an uncertain future had made them more likely to save, with the younger age groups expressing the strongest level of agreement.

Commenting on the report, actuary at Aviva Life and Pensions, Ann O'Keeffe, said it was surprising workers were still worried about losing their jobs, given that unemployment had fallen steadily over the last four years and was now at it lowest level since late 2008.

"It is also remarkable that respondents had such a pessimistic view of their job and pay prospects at a time when other workers were pointing to our economic recovery as justification for their pay demands," she said.

She said the report painted a picture of families taking more control of their finances and making prudent preparations to protect themselves from unexpected events in the future, and Brexit, in particular.

"But it may be that in the aftermath of our crisis, there is a heightened awareness of the susceptibility of our economy to external economic shocks and families have decided to take measures to build their own buffers," she said.

The introduction of a specific module on personal finance at second level education would help empower families of the future to manage their financial positions more effectively for their own protection.

Irish Independent

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