Report: One-third of renters ‘overburdened by debt repayment’

People in private rented accommodation and single-parent households are the most vulnerable to crippling debt, according to a report.

The research by Think Tank for Action on Social Change paints a concerning picture of high numbers of households and workers “struggling” or “squeezed” because of the burden of debt they are repaying.

This is often as a result of the high cost of living and rental costs in particular, according to the research, which is focused on non-mortgage debt only.

The study, Exploring Household Debt in Ireland: The Burden of Non-Mortgage Debt & Opportunities to Support Low Income Households, finds one-third of renters in the private sector, who are in debt, are now overburdened by debt repayment and nearly 28% face utility arrears.

Those who are renting in the private sector are nearly four times more likely to go without heat due to a lack of money than those who own their own homes. In Dublin, rent accounts for over half (51.9%) of a single person’s minimum living costs.

A lack of flexible financial services for people in debt or on lower incomes forces many to turn to money- lenders or high-interest debt purchase companies, says the report.

About 53% of all households cannot save income regularly, rising to a massive 77% for low-income households. Overall, households here remain the fifth most indebted in the European Union.

Amie Lajoie, senior Think Tank for Action on Social Change researcher and author of the report, says a high proportion of people are not going into debt for lavish expenses but are doing so just to put a roof over their heads, heat their homes or provide food for their children.

“A large number of people in Ireland are living without financial security. Instead, they face high living expenses, no savings and are at risk of being over- burdened with debt,” she said.

“They don’t have extravagant lifestyles. They are just paying the bills to meet basic needs. If they lose their job, or if they have to deal with an unforeseen issue, they are unable to cope. This is a very precarious situation.”

People in private rented accommodation and single-parent households are most likely to be “struggling”, the report said.

According to the research, 36% of single-parent households who are in debt, are overburdened by debt amounts, and one in two said their overall housing costs are a heavy burden. A further 21% of single-parent households faced utilities arrears and 27% faced mortgage or rental arrears.

In addition, nearly 20% of workers with debt are now struggling with repayment burdens.

This figure jumps to nearly 40% for those who are unemployed. Nearly 50% of all workers in debt face repayment levels that are described as a “somewhat heavy burden” placing them at risk of becoming over- indebted in the future.