Six in 10 Irish consumers pay household bills with credit, survey finds

Almost 60 per cent of Irish consumers are forced to dip into their overdrafts, use credit cards or borrow from friends to pay essential household bills, according to new research out today.

The online survey of 1,000 adults carried out by price-comparison website and switching service Switcher.ie suggests 59 per cent of respondents had to borrow to cover the cost of essential household bills last year, raising concerns over affordability and financial pressure mounting on already squeezed household budgets.

The survey indicates that, of those who had to borrow money, 35 per cent resorted to using credit cards while 17 per cent dipped into their overdrafts.

A further 12 per cent took out a bank loan to cover bills and 20 per cent borrowed money from family and friends, with 13 per cent telling researchers they had been gifted the money to pay their bills.

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The findings also spell potentially bad news for longer-term savings with 40 per cents saying they had no option but to dip into their nest eggs in 2016 to pay for bills. Only 24 per cent said they didn’t have to resort to any of these measures in order to cover the cost of their bills last year.

The findings suggest that, in spite of the recovery, many Irish households are still struggling to keep on top of the costs involved with running their homes.

Motor insurance

The survey show that motor insurance is the biggest concern for households. With Central Statistics Office figures indicating that premiums rose by 57 per cent in the last three years, just under 40 per cent of consumers said their motor insurance bill had them under financial pressure this year.

When it comes to bill woes, mortgage and rent payments are the next biggest cause for concern, with a third of those polled saying they put them under pressure, closely followed by gas, electricity and motor tax on 27 per cent.

"Many of us are facing into the new year with debt – be it from credit cards, overdrafts or even loans from family and friends. And for lots of consumers, this debt is stacking up because the cost of running a home – and paying for essentials like gas, electricity, broadband and phone – is simply too high," said Switcher managing director Eoin Clarke.

He suggested people who were worried about making ends meet needed to draw up realistic budgets and make a conscious decision to save on household essentials by monitoring utility usage and by shopping around for better value for money when it comes to utilities including gas, electricity and broadband.

“The energy market is also really competitive at the moment and consumers who shop around for a better deal and take advantage of the offers out there could save up to €402 a year off their bill. This is a significant saving for minimal effort and could go some way towards clearing existing debt and will hopefully help householders avoid going into debt to pay basic bills like this in the future.”