Households chipping away at debt even as income falls
Householders have been desperately trying to pay down car loans, card debts and mortgages and now the average debt for every man, woman and child in Ireland has fallen to €41,000, down from €47,400 four years ago, new figures from the Central Bank indicate.
Consumers have been chipping away at their borrowings despite a sharp fall in incomes. But despite these efforts, Ireland has the highest private sector debt in the European Union.
The average gross disposable income (after taxes) per household has fallen from around €60,000 in 2008 to €52,250.
Pay cuts and job losses have pared away at gross incomes, while higher taxes and charges have meant that householders have less left for meeting day-to-day expenses.
And the average worth of each household has also fallen, with the net worth -- which takes in pensions, shares and other assets -- of each now averaging €102,000.
Over the past three years, households have repaid debts of over €27bn and the amount households owe now stands at €184.5bn.
Households in Ireland owe €200 for every €100 they get in income, according to Dermot O'Leary of Goodbody Stockbrokers. Across the EU, the average household has debts of €130 for every €100 of income.
The overall net wealth of Irish households has fallen by 37pc since the peak in 2007.
Meanwhile, figures show that the percentage of people who are not saving money in banks or credit unions increased in April from 31pc to 38pc.
Some 51pc of people intend to use surplus cash to pay off debts -- a 9pc increase on this time last year.
Another 36pc would save the money, a decrease from 39pc in April 2011. Some 9pc said they would spend any surplus cash they get.
The survey also shows that 13pc of people are saving €25 a month.