Business Personal Finance

Monday 16 September 2019

Cost of living so high even the rich struggle to make ends meet

Stock photo: GETTY
Stock photo: GETTY
Charlie Weston

Charlie Weston

The cost of living is so high that large numbers of high-earning households are struggling to make ends meet.

A new survey has found more than a quarter of people in the highest-earning households say they have difficulties paying bills.

This was put down to the high cost of living and poor provision of public services.

If high earners are struggling to pay their bills it means others on lower incomes are in an even worse situation, the report authors said.

A separate report commissioned by KBC Bank found 22pc of consumers are unable to afford a holiday.

KBC's Austin Hughes said the results suggest a substantial number of households were still struggling financially despite the strong economic upswing.

And even top earners are feeling the pinch.

Research carried out by University of Cambridge academic Dr Marcos González Hernando, of the Tasc think tank in Dublin, found Ireland's top earners are much more likely to feel they did not earn enough in comparison to their equivalents in the UK, Sweden and Spain.

Tasc is an independent think tank supported by trade unions and receives funding from the Atlantic Philanthropies.

A quarter of those in the highest-earning 10pc of households in the State are struggling financially.

Dr Hernando used survey data on people in 34,000 households in the four countries to examine attitudes towards economic inequality.

The finding that many of the highest-earning households are struggling comes after recent data showed food prices are among the highest in the European Union, despite Ireland being an agricultural nation.

Prices of food and non-alcoholic beverages are 20pc higher than the average in the EU, according to Eurostat.

This makes it the fourth most expensive for food and soft drinks.

Dr Hernando found each adult in the 10pc of the surveyed households in this country had an after-tax disposable income of almost €42,000.

The disposable income figure is weighted to take account of household size, with higher weightings given to the number of adults in the household.

This compared with €44,944 for a similar group in Sweden, €29,496 in Spain and £40,350 (€44,066) in the UK.

The income of the top 10pc in Ireland was around twice the median income of people in the country as a whole, which is €20,707.

Difficulty

Dr Hernando found 24pc of people in Ireland's highest-earning households said they had some difficulty making ends meet. Another 3pc had difficulty making ends meet, and 1pc had great difficulty.

This compared with 15pc of the highest-earners in Spain having difficulty of some degree in making ends meet, 11pc of the highest-earners in the UK and 3pc of the highest-earning tenth in Sweden.

Dr Hernando said: "What this research reveals is that many people in the highest income bracket in Ireland are feeling insecure and vulnerable, despite their own acknowledgement that they are well-off comparatively."

Irish Independent

Also in Business