Family finances showing signs of recovery

There are signs of a gradual recovery in family finances with a slight increase in the number of people who have more than €100 left at the end of the month once all their bills are paid.

However, nearly four in 10 people are putting off paying their essential bills on time — up 32% since last December. Most of those sacrifice spending in other areas to pay their bills — health insurance and the grocery spend are most sacrificed.

Nights out, holidays, and clothing and footwear are the most sacrificed non-essential items. Consumers are also concerned the rising cost of motoring could force them to give up their car.

The findings are contained in the Irish League of Credit Union’s (ILCU) first What’s Left tracker of 2014.

The research, which has been compiled since 2011, has tracked how austerity and the recession has impacted on family finances, as people struggle to make ends meet.

The latest findings show the average net income per household is €2,710 per month, with an average family left with €327 at the end of a typical month, a slight decrease from €367 in December 2013.

Disposable income for all adults has increased by €13 since April 2013, with working adults showing a €20 increase.

There has been a €67 increase in the monthly cost of third-level education to €355 per month, and an €86 per month increase to €138 in primary and secondary school-related costs.

Despite this, more people are saving, with the average amount saved up €7 to €177.

The financial scandals in the charity sector have also hit donations, with 20% saying they have stopped donating to charity completely.

ICLU chief executive officer Kieron Brennan said the tracker has, over the past year, shown the first signs of possible economic recovery.

“Those struggling to pay their bills on time every month are becoming savvier and are shopping around for the best deals or switching providers in an effort to keep costs down,” he said, while adding that car fuel and car insurance remained concerns for people.

The survey came as the CSO released figures for 2012 which showed the average household’s disposable income fell by almost €500 to €17,702.

Research from price comparison website uSwitch.ie found 50% of households are being forced to go into debt to pay their essential bills, with 63% dipping into savings or accepting money from family and friends to make ends meet.

Electricity is the biggest concern. Eoin Clarke, head of uSwitch.ie: “Our research shows that the average energy bill has rocketed by over €500 per year in the last three years alone, due to the increase of unit prices and standard charges.”

Key findings

* 1.69m people have €100 or less left at the end of the month once all the bills are paid, an increase of 32,000 on December’s figures;

* 1.154m have €50 or less left at the end of the month once all the bills are paid — an increase of 56,000 on last December’s figure;

* 470,000 have nothing left at the end of the month — a drop of 10,000 since December.