Poor are ‘struggling with their ESB debts’

DEBT attached to ESB bills was yesterday highlighted as the major source of financial headache for the nation’s least well-off.

The ESB has been criticised by budgeting services officers for charging some people up to 22.9% interest on basic necessities such as fridges, cookers and heaters. Its deferred payment rate is just 0.1% less than that charged by moneylenders.

Those who bought household items over Christmas are struggling to pay their bills, which are combined with their bi-monthly ESB bill. Charges for power have already increased by 13% over the past 12 months.

More and more are calling into Money Advice and Budgeting Services (MABS) offices nationwide desperate for help, MABS spokesman, Michael Culloty said.

“It is the poorer in our society who don’t have savings they can dip into for things like a washing machine or a fridge who end up signing up to agreements which cost them a lot more in the long-run,” he said.

The ESB said that it was forced to introduce a 9% price increase last October and a further 4% increase in January. On hire purchase rates, a spokesman said: “The goods got on deferred payment are unsecured loans and have to attract this particular rate of interest.”

The Irish Financial Services Regulatory Authority advised people not to be tempted by drip-feed offers which end up costing them a lot more in the long-run.

“We would urge people to watch out for fixed term loan agreements which carry penalties if you settle up early. We would also ask people to look at personal loans rather than hire purchase agreements.”

Further financial advice is available from IFSRA on www.itsyourmoney.ie