Sunday 19 November 2017

The middle classes see the cost of living soar

Inflation is back -- and most prices are rising. Some parts of society are getting squeezed badly but others are doing fine. Nick Webb reveals the winners and losers in the Sunday Independent/ KBC Bank cost of living survey

Nick Webb

Nick Webb

Aspirational family

Cost of living

Up 2.5 per cent since October 2009

National average

Up 0.7 per cent

The middle-class tiger cubs must be punch drunk at this stage, with one bit of bad news after another. Their cost of living has rocketed at more than three times the national average over the last year -- though it is still about 9 per cent cheaper than it was in October 2008.

Soaring mortgage interest costs for that €2m loan for the red brick in D4 are squeezing the life out of them but at least the bags of shopping are a bit cheaper. Christian Louboutin shoes or that little Gucci number may be that little bit more affordable as shoes and clothing have fallen by about 7.2 per cent in the last year, according to the cost of living survey .

Heading off skiing may be less of a burden with overseas holidays down around 1.5 per cent this year. Mind you, zipping over to New York for a quick cruise around Macy's is not so cheap, as air travel prices have jumped 20 per cent in the last 12 months.

With third-level fees set for a comeback, the price of education is the staple dinner table conversation these days. Primary school costs have risen 13 per cent in the last month alone and all together education charges have jumped 9.1 per cent over two years.

A new Land Rover or Jag is also better value with car prices down 6.2 per cent. However, insuring the rapidly less valuable home and car is much dearer, with home cover up 14.5 per cent this year alone and car cover rising too. But the price of eating out in fancy restaurants is falling fast, with a 3.6 per cent drop in night club bills too.

Looking perky is a little dearer with plastic surgery and hospital costs up 1.3 per cent in a year. But if you don't want to look like Joan Rivers, it's cheaper to try more natural methods, with other health and beauty treatment costs falling 6.2 per cent and hairdressing charges sliding slightly. Lipstick and other cosmetics are now 3.7 per cent cheaper than they were a year ago.

Welfare recipients

Cost of living

Down 2.2 per cent since October 2009

National average

Up 0.7 per cent

Over the last two years, the cost of living for those on benefits has dropped by 6.7 per cent, falling faster than the national average. This fall has slowed over the last 12 months.

Food prices have fallen 7.7 per cent since October 2008, the pace has slowed dramatically in the last year with some items such as flour rising sharply (up 8.8 per cent last month alone), butter is up 5.8 per cent this year and jam is up 3.9 per cent.

Alcohol prices have dropped 7.8 per cent in the last year but tobacco prices have increased by 1.3 per cent in the same period. Clothing and footwear prices have shed almost 20 per cent over the last two years but those falls are slowing. However, these falls are offset to a certain extent by the 4 per cent rise in the cost of TV ownership as well as thoroughly sharp rises in bus fares -- 12.6 per cent over two years and an 8.6 per cent jump in train fares.

Pensioners

Cost of living

Up 0.6 per cent

National average

Up 0.7 per cent

Over the last two years their cost of living has fallen just 3.2 per cent, compared with the national average of 5.7 per cent.

In October, pensioners actually saw their cost of living rise by 0.6 per cent. The first rise since early 2009. Electricity, gas and other fuel is a major outlay and the cost of heating and lighting homes has risen over the last year by more than 7.2 per cent. Home heating oil is up a staggering 30.5 per cent in the last year, with bottled gas and electricity both jumping a more modest 3 per cent each.

Lower food prices are a major saving for the State's senior citizens. But the trend is showing signs of changing with tinned sardines up 0.3 per cent last month alone and baked beans also up 3.8 per cent this year, biscuits fell by 1.4 per cent in price this year.

Politicians

Cost of living

Up 3.9 per cent since October 2009

National average

Up 0.7 per cent

Why would anyone be a politician? Job security is pretty much zero and their cost of living has started to increase by almost six times the national average. However, it is still well down compared to what it was at the start of the recession.

The ministerial Mercs may be up for grabs sooner than politicians might think but until there's an election, bog-standard TDs will have to make do with lower car prices, down 6.2 per cent in the last year. Green TDs will benefit less as bicycle prices are only down 0.4 per cent. Apart from funerals, elected representatives spend a lot of time at sporting events which , IRFU aside, have seen prices fall by 1.2 per cent this year. But keeping plugged in to Twitter accounts is dearer with telephone and communications services up 3.1 per cent this year; however, computers and laptops have fallen by 19.2 per cent. Keeping informed is a little dearer with newspapers and magazines up 0.6 per cent over the last year. Junketeering off to other countries must be far more attractive, especially if the taxpayer picks up the bill as air travel has risen 20.4 per cent this year alone.

First-time buyers

Cost of living

Up 5.3 per cent since October 2009

National average

Up 0.7 per cent

Lumbered with biblical levels of negative equity for a semi-D in a field near Athy, it's hard not to feel desperately sorry for the first-time buyers sold a pup in the boom years.

Their cost of living is well down on what it was two years ago but by gum it's rising fast, at more than seven times the national average.

This is primarily down to increased mortgage interest rates, which have seen repayments leap 24.7 per cent in the last year. With mortgage payments accounting for about 30 per cent of expenditure, it's a massive dent in spending power.

But on the plus side, their remaining money will stretch a bit further with sofas, curtains and other home furnishings plummeting by 6.4 per cent this year. Washing machines, cookers and freezers are also much cheaper, falling by about 4.3 per cent, the survey shows.

The cost of commuting from the field near Athy is dearer with rail fares up 0.3 per cent and bus fares jumping 0.8 per cent in the last year. Petrol is up 13.7 per cent with diesel also jumping 18.6 per cent in the last 12 months.

Young families

Cost of living

Up 2.8 per cent since October 2009

National average

Up 0.7 per cent

Young families have seen their cost of living start to rise sharply in recent months but it remains almost 12 per cent cheaper than it was in October 2008.

The 24.7 per cent rise in mortgage interest over the last year is the biggest increase but rapid jumps in fuel costs have also hit hard. Primary education prices increased by 1.3 per cent in October alone. Childcare costs are down by a chunky 10.7 per cent in the year to date.

Food is generally cheaper but certain products such as fruit juice (up 1.3 per cent), ice cream (up 2.1 per cent), fresh fruit (up 1 per cent) and bread (up 0.5 per cent) have also seen increases in the last month.

The cost of medical services has risen an unbelievable 18 per cent in just two years with recent spikes in drug costs due to new prescription charges. Visits to the dentist and dental services have risen by almost 9 per cent over the last 12 months.

However, toys have tumbled in price since October 2008, falling 18.8 per cent, although the pace of price falls has slowed.

Stay-at-homers

Cost of living

Down 1.8 per cent since October 2009

National average

Up 0.7 per cent

And sure why would you leave home? The cost of living for those who have failed to leave mummy's cooking is falling despite the average cost for everyone else rising. These are the real winners in the cost of living stakes.

Going out on the beer or dining in restaurants is 1.9 per cent cheaper than it was a year ago, with nightclubs also 3.6 per cent cheaper. Harry Potter 7 may give Toy Story 3 a run for its money as the biggest grossing movie of the year when it opens next week but it'll be that bit dearer as cinema entry fees are up 1.2 per cent.

The cost of personal grooming products such as hair wax or gel has risen sharply, spiking 3.9 per cent last month alone, the survey shows. Blingy jewellery or watches are also dearer, some 5.9 per cent dearer in the last 12 months. Meanwhile magazines such as FHM or Heat are slightly dearer, up 0.6 per cent this year.

Sunday Independent

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