50% using savings to survive

HALF of Irish adults are dipping into personal savings to cover day-to-day expenses, a survey has found.

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.

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