Business Irish

Sunday 15 December 2019

Personal debt is the real problem

JARLATH Jordan runs themoneybutler, a financial consultancy in Galway. His sector has transformed from insurance specialisation into a range of financial service advice.

Jordan went into the industry in 1981 doing 11 years in brokerage before working for various firms around the country and then setting up in Galway.

The 1980s:

"In the 1980s, people tended to save money and they put some by for things such as life assurance.

"They didn't have as much personal debt and, indeed, businesses didn't carry as much debt.

"From a business point of view people definitely worked as hard although our industry wasn't as regulated as it is today. It was more product driven and the range of products wasn't so vast as it is today so things were much simpler.

"That said, I do remember paying 65pc tax, with PRSI of 7.75pc and 6pc to the pension. Back then individuals didn't have a problem, it was the country that had the problem and was stumbling along.

"People were almost conditioned to it and were generally happier because they had fewer expectations. And if you worked hard, you were rewarded for it."


"The country is again in huge debt, but the difference this time is that the people are hugely in debt as well.

"As a result even people who do have money are still making blanket cuts across all their budgets, even if that is a bad decision in the long run.

"Now you can work harder and not get rewarded for it. People are genuinely fearful about what to do.

"A lot of them bought one ticket into property to make a fortune and ended up to their ears in debt.

"There are some pluses of course. We're definitely better educated, business is better regulated, the tax system is much more efficient.

"There are still plenty of savings out there but people today wonder whether they can trust the bank with their money."

The broker's verdict: This recession is worse.

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