Saturday 24 March 2018

Majority of consumers forced to borrow money to pay everyday bills

Charlie Weston Personal Finance Editor

Large numbers of consumers are being forced to borrow money to pay everyday bills.

New research shows that three out of five households claim they were forced to borrow to meet the costs of essential bills like electricity and motor insurance.

A third of consumers are resorting to paying for essential household bills by credit card, according to a survey commissioned by price comparison site

Motor insurance costs, which have surged in the past two years, are proving to be a huge cause for concern for householders.

Premiums have shot up by more than 50pc on average in the last two years, with many drivers being quoted much higher rises when they seek to renew their cover.

Along with using credit cards, consumers are resorting to overdrafts and bank loans to meet day-to-day bills, the survey shows.

Two out of ten borrowed money from family and friends, while 13pc were gifted money to pay for troubling household bills.

The findings also show that many are forced to raid their savings to pay household bills, the survey, which was carried out by Coyne Research on 1,000 adults for

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Some four out of 10 people said they were forced to dip into their nest eggs last year to pay for bills.

However, at the other end of the scale a quarter of respondents said they didn’t have to resort to any of these measures in order to cover the cost of their bills last year.’s Eoin Clarke said the findings suggest that Irish households are still struggling to keep on top of the costs involved with running their homes.

“This is perhaps unsurprising, given that electricity costs in Ireland are the sixth highest in the EU, and the energy bill for an average household now comes in at an eye-watering €2,060 per year.

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“Meanwhile, broadband costs in Ireland consistently rank amongst the highest in Europe,” he said.

Motor insurance is putting a huge strain on household budgets, with four out of 10 consumers saying their vehicle cover puts them under financial pressure.

When it comes to bill woes, mortgage and rent payments are the next biggest cause for concern, putting a third of people under pressure.

This is closely followed by gas and electricity and motor tax.

Mr Clarke said is likely to be little let up in 2017, with one in five people saying that they are in debt and worried about it.

“Many of us are facing into the new year with debt - be it from credit cards, overdrafts, or even loans from family and friends. And for lots of consumers, this debt is stacking up because the cost of running a home - and paying for essentials like gas, electricity, broadband and phone - is simply too high,” he said.

Mr Clarke advised those in debt to ease the pressure by drawing up a realistic budget, and switching services to get better value.

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