Friday 23 February 2018

Grim choices are being made as households struggle to survive

MONEY’S too tight to mention – a stark new report reveals the scale of what we’ve already lost and how families are struggling to survive.

Whether it’s buying a coat, taking a holiday or simply paying the bills, families all around the country are facing grim choices over how to make ends meet.

The average household suffered a €4,000 drop in income last year according to official figures – and that’s before they get the Government’s parting gift of another €4,600 of cuts and tax hikes to come.

So how are people coping with this precipitous decline in living standards and how does this bode for the even more difficult four years ahead?

Firstly, we’re getting into arrears at a faster rate than ever before.

One in four of us fell behind with our mortgage, rent, household bills and other debts last year, the CSO survey on Income and Living Conditions found.

That’s more than double the numbers a year earlier, and even the (once) wellheeled among us are finding it increasingly difficult to meet routine monthly expenses, with an eight-fold increase (to 17pc) in the numbers of high earners in arrears.

Nearly a third of families found themselves so cashstrapped at times they were unable to put meat on the dinner table, heat the house adequately or buy new clothes or furniture.

The situation gets even worse when it comes to unexpected expenses.

Almost half of those surveyed said they wouldn’t be able to meet a sudden expense of €1,000 without having to borrow, while 11pc said they were already having to borrow to meet day-to-day expenses.

Banking statistics may suggest that households have oodles of savings to draw on – but the CSO report shows that averages can conceal an awful lot of misery. The only slightly good news amongst all the gloom is that at least the gap between richest and poorest isn’t widening as we’re all getting poorer together – although obviously those on the margins are more exposed to deprivation.

Between tax hikes, pension cuts, higher VAT and carbon taxes, new property and water charges, the average family can expect income reductions of another €4,600 by 2014 as revealed in the Irish Independent today – but that could be even higher if the kind of wage cuts we’ve all seen in the past year continue.

The draconian cut to the minimum wage announced this week is certain to have knock-on downward effects on all pay rates, particularly at the lower end of the scale, meaning further pain for families. And while the Government gave itself a clap on the back yesterday for how much social welfare payments were helping mitigate families’ financial losses, they still refused to disclose how much next month’s welfare cuts would be for individuals – the only certainty being that it wouldn’t be pretty.

Irish Independent

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