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Cowen's betrayal of the middle class

IT WAS Bertie Ahern's boast that everyone was now middle class - there was no more working class.

Now Brian Cowen's government stands accused of obliterating that very body of people.

A new survey shows middle income families are struggling like never before with escalating unemployment coupled with serious mortgage repayment difficulties.

Charities and debt advisors are concerned a series of interest hikes could force thousands of families into default.

One in 20 residential mortgages is now in arrears for more than 90 days, a 12pc increase on figures revealed at the end of March.

Separately, the largest increase in people signing on for dole benefits came from those in the professional sector.

Live Register figures continued their upward climb last month by a further 30,198, 1.2pc of this was from the professional group.

And the increase in the numbers signing on in the last six months has been in the professional category, up by 26.8pc, with a 14.6pc jump for the clerical and secretarial category and 11.9pc for wrokers in sales.

Middle-income families are continuing to slash payments on what they consider to be non-essential payments.

The Health Insurance Authority revealed that 10,000 people, or 800 per week, gave up their private health insurance in the second quarter of this year.

And figures released by the Central Statistics Office outlined that retail sales dropped by 0.1pc by volume in the 12 months to July and 0.2pc from June.

Debt

This was the first year-on-year drop in sales on record since January.

Despite what Taoiseach Brian Cowen says, economists believe that the country has "hit a wall" in terms of economic recovery as people have less disposable income to spend, which has a wider knock-on effect.

But householders are being slapped with rising prices on essential utilities bills as the ESB confirmed electricity bills for households will rise by 4.9pc from October 1 as a result of the Public Service Obligation (PSO) Levy.

Housing charity Respond said tens of thousands were at risk of default after building societies and banks hiked rates up by as much as 0.6pc in the summer months.

"Homeowners in Ireland are particularly vulnerable because there is no limit on the number of interest rate increases lenders can impose," said a representative.

Mortgages

Debt advisors Money Village said that they are receiving more calls from people who have had an "income shock".

"If people have borrowed on two incomes initially, now they could be left with just one income," said managing director, Eugene McDarby.

The agency said that often financial difficulties can give rise to ill health, depression and family problems, and this can exacerbate the difficulties as well as giving rise to wider societal costs.

The number of homes repossessed during the first six months of the year jumped to 387, and banks applied for 170 court actions against struggling homeowners, an increase of 5pc.

Independent mortgage and insurance brokers group, PIBA, said it was a very worrying for homeowners who found themselves in serious difficulty.

Rachel Doyle, PIBA director, said rules on how to deal with debt-hit homeowners should take into account the still rising jobless figures.

cmurphy@herald.ie


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