Optimism surges, but so too do fears of another property crash
Our poll has eye-catching findings on the mood of the nation, housing and pensions. It has implications aplenty
Today's Sunday Independent/Kantar Millward Brown poll shows a surge in optimism over the past six months. Never, in the three decades the pollster has been posing the question, has a larger share of respondents been more upbeat about their future personal financial situation. More than one in three people believes that they will be better off in a year's time than now. It was just one in five last October.
The surge has been quite sudden. Up to last autumn, people's optimism about their future finances had been creeping up only gradually since the economy turned around in 2012. The slow rise over that period probably reflected little or no wage growth at the time.
Though there are increasing signs of life in pay settlements, the surge in the share of people expecting to be better off in 12 months in our poll is not easy to explain. If it has been caused by unrealistic pay expectations in the public sector, following the intimidatory behaviour of strike-threatening gardai at the end of last year, the seemingly positive finding in today's poll could actually be a cause for concern.
More unambiguously good news comes from the pessimists. The number of people expecting to be worse off in 12 months has fallen sharply.
Only 15pc of respondents believe their financial situation will worsen in the foreseeable future. While that is not quite back to pre-crash levels, when a consistent one in 10 people expected to be poorer 12 months on, it is a fraction of the worst of times.
For almost half a decade up to 2013, more than half of people expected their personal financial situation to deteriorate over the following year.
The nation's much more upbeat attitude was only partly reflected in last Friday's retail sales figures for March. They showed a solid increase between the first three months of this year and the last three months of 2016. But they did not show the sort of surge that our poll suggests today.
At first sight there might appear to be a contradiction between what people feel about the future and what they are spending now. But an altogether different question in the survey may well explain the difference.
A quite astonishing 38pc of people believe that the housing market is destined to collapse as it did during the last recession. That is a much larger share than those who believe the contrary.
Growing fears about another property crash are reflected in another question put by the pollsters - "Is this a good time to buy a house?"
Five years ago, when the recovery hadn't got going and property prices were on the floor, an overwhelming majority thought it a good time to buy. Now less than half do.
The fear of history repeating itself with another crash in house prices could well explain why, despite high and rising levels of optimism, spending in the shops is not rising at the same pace.
Another standout finding from the survey is how little optimism there is among two groups of people.
The pollsters categorise the people they survey by social class. There are five groupings.
Those in the three better-off classes - mostly white collar types - are all similarly upbeat. Approximately half of people questioned in the top three classes said they expected to be better off in a year's time, multiples of the numbers who are downbeat.
But that changes dramatically for the "lowest" social class and farmers. In both cases there are far fewer people anticipating improved personal financial circumstances. Many people in these categories are expecting their personal financial situation to be worse in 12 months' time.
For farmers, the huge threat posed by Brexit is likely to be the cause of their lack of optimism - no sector is more threatened by Britain's break with Europe.
Among the social class which includes the low skilled and the welfare dependent, an explanation for low levels of optimism is not so clearly obvious.
While it is likely that those on social welfare payments are - quite correctly, given the limited fiscal space - not expecting much in the way of increases over the next year, labour market developments should be boosting optimism across the board.
In recent years, there has been strong growth in jobs in lower-skilled sectors, such as construction, retail and the hospitality sector. Unemployment is falling and wage growth is beginning to pick up.
But from a political perspective, it is perception that counts. With the poorest social class feeling a little left behind, the deepening class cleavage that has emerged over the past decade does not appear to be about to reverse.
Another big social cleavage highlighted in today's poll is the differing outlooks between the young and the old. Age and optimism are closely linked, the survey finds.
The 25 to 34 age group is the most upbeat, with more than half of people in this bracket expecting to be doing better financially in a year from now. But optimism declines with age, the poll shows. Those of pensionable age are the most glum. Only 15pc of the over-65s expect an improvement in their personal financial situations over the next year. Many more - one in four - believe that they'll be poorer.
The unhappiness of older voters is somewhat surprising. In many ways the current generation of retirees are a lucky generation. Most have decent pensions. They have benefited from the startling increases in longevity of recent decades while retiring as the same age people have retired at since the 19th century. Most measures of economic well-being show that they came through the recession less scathed than younger people.
But whether or not the elderly are right to be glum about their financial situations, those in the world of politics would do well to note it. Older voters, as is the case in all countries, turn out to vote more than their younger counterparts. They also pay more attention to politics.
The rise of grey power has been accelerating as the number of people over the age 65 has increased rapidly - there are now close to 650,000 people in that age bracket, an increase of more than 50pc over just two decades.
Political parties that are not seen to be friendly to the elderly are likely to suffer electorally. Those who promise them goodies could stand to gain substantially.
That brings us to the issue of pensions. Our opinion poll asked people about their retirement preparations. Nearly 60pc of those who answered don't have a pension.
With more elderly people around, and their share of the total population rising fast, but fewer people paying into pensions, there is almost inevitably going to be more poverty among the aged in the future.
Demographic trends show with certainty that grey power will rise. The much talked about "pensions time bomb" will likely make the elderly of the future militant. The inter-generational cleavage may turn out to be the deepest one of all as the century progresses.