Friday 26 May 2017

Sales may be rising but one in three struggle to pay bills

Charlie Weston Personal Finance Editor

ALMOST one-in-three consumers admit they are having problems paying their bills, a new survey indicates.

This is way up on the numbers struggling last year to meet their payments on mortgages, loans, credit cards and electricity bills.

And increasingly cautious consumers are preparing for a more expensive future by continuing to cut back, the survey by the Irish Mortgage Corporation indicates. The findings coincided with official figures showing a rise in retail sales in February, helped by a surge in sales in the motor sector.

The Central Statistics Office said the volumes of sales in February was up 3pc compared with the same month last year, the first annual increase for more than two years.

Stripping out car sales, sales increased by 1.2pc in February compared with January. That followed a 0.4pc rise in January.

"Core" sales, which exclude cars, were up for two consecutive months for first time in two-and-a-half years, Davy Stockbrokers economist Rossa White said.

Economists said many of those pushing up the sales figures were the half of the 1.5 million households that do not have a mortgage and have resisted running up large "lifestyle" debts on credit cards.

The retail sales figures also appeared to indicate that some people were still spending hard despite having huge debts.

The findings of the Irish Mortgage Corporation survey also indicated that some people were failing to dispense with the bad habits associated with the boom, as the survey found that 15pc of respondents felt credit cards represented "good value for money".

This is despite the fact many credit cards charge between 15pc and 20pc interest rates on revolving card balances.

Close to three out of four consumers said they planned to reduce their spending further to cope with higher charges, particularly rising mortgages rates.

One-in-five mortgage holders said they had been preparing for increases to their monthly repayments by saving.

The survey of 1,000 adults found large numbers of people had set as a priority paying off high-interest debts such as credit cards, while four out of 10 adults planned to dispense with the family holiday.

Irish Independent

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