Consumers have slightly more cash left over, survey shows

Consumers have slightly more cash left over at the end of the month once all essentials are paid for compared to this time last year and more people are able to save.

However, dependence on credit cards has also increased and many people are facing hard choices when it comes to paying their property tax this year with groceries in the firing line for cutbacks.

The latest “What’s Left” survey by the Irish League of Credit Unions shows the average person has €182 in monthly disposable income compared to €133 in Dec 2012.

People with jobs fare slightly better than the population in general with the €182 average disposable income rising to €217 for working adults.

Another positive trend from the survey is an increase in the number of people who are able to save with 44% of adults saying they can save each month compared to 31% in 2012, although the average amount is down from €180 to €175.

Kieron Brennan, chief executive of the Irish League of Credit Unions, said the survey bore out the signs of gradual recovery evident throughout 2013.

“Disposable income is continuing the creep upwards and more people now find themselves in a position where they are able to put a small bit away in savings every month. This certainly correlates to what we are seeing across the credit union movement and what our credit unions are telling us.”

However, despite the general improvement, there are still huge numbers with little left over once they have covered bills and groceries. The survey shows 1.66m have €100 or less, 1.1m have €50 or less, and 480,000 have nothing at all left.

Employment offers only slightly more protection against empty wallets, with one in seven of all adults having no disposable income left at the end of the month while the figure is one in 10 for adults in work.

One of the less welcome trends from the survey is the increase in credit card dependence. About 76% of people now have credit cards, up from 74% at the end of 2012, and 31% of those say they need their credit card to make ends meet each month, up from 25% in 2012.

Around 30% of credit card holders are not clearing their bill each month, a drop from 39% in 2012, which is a positive change, but 70% of card holders currently owe money on their cards, an increase from 63% in 2012, and the amount they owe is €2,480, up from €2,400. One in 25 had their card revoked during 2013.

Four-in-10 homeowners were expecting to have to cut back on their usual spend to be able to pay their property tax this year, with socialising, clothing, and footwear the most common areas to be hit.

But almost 40% said they would also have to cut back on groceries while 28% said they would have to sacrifice their children’s activities.

Other common areas of expenditure to be cut are car-related costs, while significant numbers of people said they would also have to put off paying household bills, or making credit card or loan repayments.

One in eight said they would not be able to pay health insurance if they paid their property tax and one in 20 said they would have no choice but to delay making their mortgage payment in order to pay the tax.