More than 1 million people on State supports during Covid peak

More than 1 million people were reliant on State income support during the peak of the Covid lockdown in May, with over half of that number still depending on subsidies three months later, new figures show.

A new report covering the impact of the coronavirus pandemic on the household credit market shows around a fifth of houselds nationwide were reporting income falls due to the pandemic in June.

Those aged between 35 to 54 years were most likely to report a reduction, although some studies have indicated temporary income gains among the lowest income households.

Demand for mortgage and consumer credit has recovered since declining early on in the Covid crisis, but remains below 2019 levels, according to the Central Bank’s latest research.

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Its report reveals household mortgage approvals were 11 per cent lower year-on-year in August, having fallen 61.9 per cent in May, with similar percentage declines seen on consumer credit agreements.

At the end of June, over 10 per cent of residential mortgages worth a combined €11.5 billion were on a payment break, as were 6.5 per cent of consumer loans. This fell to 6.1 per cent and 4.3 per cent respectively by early September as restrictions were lifted.

In addition to payment breaks, some 5.6 per cent of mortgages were already over 90 days in arrears in June.

Household spending patterns changed dramatically during the lockdown with credit and debit card transaction for groceries rocketing between March and August, while expenditure on transport and accommodation declined.

Household deposits are at an all-time high after jumping in April and May. Reliance on overdrafts fell by 24 per cent year-on-year in August, and personal loan enquiries were at a low in April before beginning to claw back in later months.