Tuesday 21 November 2017

Just paying bills leaves half of households in debt

Charlie Weston Personal Finance Editor

HALF of households are forced to go into debt to pay their essential bills such as electricity and gas.

Cash-strapped families are using credit cards, overdrafts and bank loans to meet household payments, a new survey shows. And large numbers of broke householders are dipping into savings or getting money from family and friends to make ends meet.

Households that use both electricity and gas have seen their annual energy bills shoot up by €500 in the past three years alone, Eoin Clarke of uSwitch.ie calculated.

The survey of 1,000 people found that almost two-thirds of households have to borrow money to pay for essential bills like electricity, broadband, insurance, telecoms, refuse collection and health insurance.

Half of consumers are resorting to using credit cards and bank overdrafts to pay their bills, the survey carried out by Coyne Research found.

One in 10 said they were using bank loans to help to pay the bills.

And three out of five householders said they were dipping into their savings or getting financial help from family and friends to make ends meet.

Almost half of all consumers feel major financial pressure from energy bills.

Mr Clarke said: "The findings reveal that Irish households are still struggling to stay afloat and keep on top of utility bills. "Consumers are continuing to struggle to find ways to raise cash for their bills however they can," he added.

Research shows that the average energy bill has rocketed by over €500 in the last three years alone, due to the increase of unit prices and standard charges.

Mr Clarke calculated that householders can save as much as €343 a year just by switching energy suppliers.

Calculating that the cheapest deal for electricity-only is from Electric Ireland, for those who sign up for direct debits, online billing and claim a credit of €50. The offer, which will cost the average household €1,008 a year, is available until the end of this month.

For gas only, he said the Flogas Optimiser direct debit discount costs €853 a year.

The combination of the two suppliers will cost €1,861 a year, €343 less than the standard rates charged by Electric Ireland and Bord Gais.

Irish Independent

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