According to a study carried out by iReach, 50% of adults are spending money they initially had saved for a rainy day.
Of those who responded to the survey, 20% said they need to adjust their lifestyle to their new income level. A further 30% feel it is the only way they can survive.
Females were found to be more prone to spending beyond their means, with 53% admitting to it as opposed to 44% of males. Those aged 18 to 24 years were found to be most affected by this, with 58% of them falling into the trap of spending their savings.
When asked what they had originally intended to spend the money on:
n 27% said they were saving to purchase a house.
n24% said they were saving for a holiday.
n21% said they were saving for their children’s future.
A total of 70% of those saving for a specific purchase said they no longer felt they would be able to afford what they hoped to spend this money on.
Of those saving for a house, 58% no longer believe they will be able to afford a house due to this dilution of savings.
iReach general manager Oisin Byrne said that the need to dip into personal savings is mostly likely down to a lack of faith in economic recovery.
“We are hitting the lowest levels in terms of positive economic sentiment since mid-last year, and we see this is having a direct impact on how the public are eating into their rainy-day savings.”
According to iReach’s Monthly Consumer Sentiment Tracker, in January of this year, 38% of adults felt the economy was getting worse, while a further 38% felt that the economy was bad but had stabilised.
However, there was an increase in negative sentiment this month, with a jump from 40% of those that believed the economic situation was getting worse in August to 60% being very negative in September.
The number of people who see the economic situation as bad but stabilising was also down, from 34% in August to 23% in September.