Households have just €100 left after paying bills, report finds

Struggling households are left with €100 each month after bills are paid, according to a credit unions report which also calls for more action to limit the scope of moneylenders.

The June 2012 What’s Left Tracker Findings from the Irish League of Credit Unions (ILCU) shows deepening consumer worries over rising debt levels and possible cuts to either social welfare rates or income tax.

The report finds 17% of adults (602,000 people) say they have no money left at the end of each month once they have paid their bills, while 14% of working adults (252,000 people) say the same.

In the three months since the last installment of the ILCU tracker in April, the average amount of money left for households overall has fallen from €178 to €168 for all adults, and from €208 to €200 for working adults.

A growing number of people (61%) agreed they are living to work as opposed to working to live, while 62% of the population have some form of loan exposure.

It has pushed some towards the services of moneylenders, resulting in another warning from the ILCU to the Government to increase regulation of the sector.

ILCU chief executive Kieron Brennan said: “Many of this group may not be in a position to pay off their credit card bills in full each month and will be subject to high interest rates.

“Worryingly in this tracker only 54% know what interest rate is charged on their credit card.

“Even more concerning is that of those who are borrowing each month to meet payments on their household bills, 10% are turning to moneylenders. The ILCU recently called on the Government to put a legal cap on the interest rates charged by moneylenders in Ireland. No such cap currently exists but in practice, the ceiling is just below 190% APR.

“With the level of personal indebtedness and financial exclusion in Ireland, there is a real danger of compounding the problem by allowing legal moneylenders to charge excessive rates,” Mr Brennan added.

While 39% of people are exposed to credit card debt, 25% of credit card holders use it every month to cover basic bills.

The average amount owed on credit cards is €1,200, yet one-third of holders pay back the minimum amount each month and more than half have no idea of what bank charges operate on their current account and a similar number do not know their credit card interest rate.

With household bills rising in the past 12 months and more people having less disposable income, the level of worry expressed by those surveyed has increased, and placed renewed focus on income tax and social welfare levels.

Some 41% of those surveyed claim they do not see a future or themselves or their families in Ireland, while 38% believe that changes to the minimum wage mean they would be better off not working.