Household debt decreases by €27bn

Households have reduced their debts over the past three years by more than €27bn, according to the Central Bank.

In contrast to the Government’s ballooning balance sheet, homeowners have been working hard to pay down debts they owe, reducing liabilities such as mortgages and credit card debt.

The figures were released by the Central Bank in its quarterly financial accounts for the fourth quarter of 2011.

The bank reported that their figures recorded the first increase in disposable household income since the last quarter of 2008.

Bloxham economist Alan McQuaid said the increase in disposable income was a technical increase based on the lower debt levels in households.

“Households are still under serious pressure and in difficulty. They are very cautious when it comes to spending. This has been reflected in the retail sales figures. What they are saying here is that households have lower debt,” he said.

Mr McQuaid said there won’t be any real recovery in disposable income until the labour market stabilises and people return to work.

The decline in the value of people’s homes continued to impact householders’ net worth. The figures showed the fall in value from peak net worth of households in 2007 to today’s value was almost 40%. The net worth of households now stands at €457bn, or €101,962 per person.

This figure still outstrips the amount of money households owe. Average household liability stands at €41,169 per capita or, as a group, households now owe €184.5bn.

Businesses not involved in banking, the non-financial corporate sector, also saw their accumulative wealth decline. Corporations in Ireland saw their wealth fall 5% to €207bn in the last quarter of 2011 as their financial liabilities outstripped an increase assets value.

Government liability hit its highest level ever in the last quarter of 2011, climbing 2% in the second half of the year to €173.3bn.

The national debt stands at €129.6bn.


Lifestyle

Rower Philip Doyle believes there is no gain without pain when it comes to training. “You have to break a body down to build it up,” says the 27-year-old matter of factly.Irish rower Philip Doyle: 'You have to break a body down to built it up'

The bohemian brio of kaftans seems a tad exotic for socially distanced coffee mornings or close-to-home staycations. Perhaps that’s their charm.Trend of the Week: Cool Kaftans - Breezy dressing redefined

Eve Kelliher consults a Munster designer to find out what our future residences, offices and businesses will look likeHow pandemic life is transforming homes and workplaces

Nidge and co return for a repeat of a series that gripped the nation over its five seasons.Friday's TV Highlights: Love/Hate returns while Springwatch looks at rewilding

More From The Irish Examiner