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Service debt or spend?

EFFORTS by households to overpay their mortgages and other debts will mean they spend less on goods and services, a Central Bank research paper has found. Older and wealthier households are more likely to engage in what the researchers call deleveraging – reducing their personal debt levels.

And those engaged in overpaying their debts to reduce them are more likely to have a third-level education, said the paper, entitled Deleveraging in a Highly Indebted Property Market.

Those households making efforts to overpay their debts also save less, the research by Yvonne McCarthy and Kieran McQuinn found. Consumers who overpay their debts are seeking to "re-establish their desired debt levels", the researchers said.