Wednesday 24 January 2018

Third of consumers borrowing cash to pay household bills

Breda Heffernan

Breda Heffernan

MORE than a third of consumers have had to borrow to pay their household bills in the past year and worryingly, one in 10 have resorted to moneylenders.

Meanwhile, a quarter of Irish credit card holders are using their flexible friend to make ends meet each month.

The second Irish League of Credit Unions (ILCU) quarterly 'What's Left' Tracker for 2012 found that disposable income in Ireland dropped in the last three months.

Over 80pc of people are now worried about how they will cope if further changes are made to social welfare or income tax rates.

The April tracker revealed that 560,000 adults (16pc) had no disposable income left at the end of the month once all their bills were paid. This has now risen to 602,000 adults (17pc).

Last quarter, 61pc of adults said they had €150 or less left at the end of the month. This has now risen to 63pc.

Consumer sentiment is also falling, with 61pc saying they were living to work as opposed to working to live, up from 57pc three months ago.

Other findings show that:

• 1.8m people are left with €100 or less each month after their bills are paid.

• 40pc of people have borrowed to pay their household bills in the past 12 months -- 10pc using moneylenders.

• Irish consumers owe on average €1,100 on their credit cards.

The survey of 1,000 adults last month found that almost two thirds have some form of loan, excluding mortgages, with 39pc exposed to credit card debt. Bank overdrafts are used by 54pc of adults, followed by credit cards (39pc) and credit union loans (18pc).

Of those consumers with credit cards, almost a third miss payments and another third make only the minimum payment.

Some 40pc of consumers were forced to borrow to pay bills over the past 12 months with most relying on help from their family and friends.

Commenting on the survey, chief executive of the ILCU Kieron Brennan said personal debt is a growing concern.

"Many of this group may not be in a position to pay off their credit card bills in full each month and will be subject to high interest rates. Worryingly in this tracker only 54pc know what interest rate is charged on their credit card."

He called on the Government to put a cap on the interest rates charged by moneylenders.

"No such cap currently exists but in practice, the ceiling is just below 190pc APR," he said.

Irish Independent

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