Cost-of-living pressures forcing homeowners to stall 'big life plans'

Billy Shannon of Aviva Insurance, for whom the survey was carried out, said: “Many people simply do not feel comfortable with starting the next chapter of their lives possibly out of fear that they won’t have the finances available to support themselves in the future.” File photo

Nearly half of homeowners are putting off “big life plans” due to the cost of living as they do not know “when the storm will pass”.

A new survey of 1,000 people also found that more than 80% of homeowners are shelving home-improvement plans as inflation continues to bite. People aged 45-54 are most likely (54%) to delay their plans due to inflation and the uncertainty it is bringing.

Billy Shannon of Aviva Insurance, for whom the survey was carried out, said: “Many people simply do not feel comfortable with starting the next chapter of their lives possibly out of fear that they won’t have the finances available to support themselves in the future.” 

The survey comes as the latest Consumer Price Index from the Central Statistics Office shows a 7.2% rise in the cost of living in the 12 months to April 2023. Energy bills and food prices are leading that surge which is hitting households’ pockets, while both renters and homeowners are being hit by rising rents and mortgage interest rates.

Consumer prices rose by 7.2% over the 12 months to April 2023https://t.co/M1C4qLIoLR#CSOIreland #Ireland #CPI #ConsumerPrices #Inflation #Deflation #Prices #BusinessStatistics #Business #BusinessNews #IrishBusiness pic.twitter.com/LDH74E7kgf

— Central Statistics Office Ireland (@CSOIreland) May 11, 2023

April 2023 marked the 19th straight month that inflation has remained above 5%, albeit it has fallen from its height of 9.2% in October 2022.

The survey suggests that the cost-of-living crisis is having an impact across different groups. Almost one in five (19%) people aged 55 and over said they are putting off retiring while over one quarter (28%) are stalling on either buying a home or moving to a new one.

Of those who cited concerns with cost-of-living pressures, inflation is making 15% of people aged 25-34 consider putting off having a baby and a similar proportion said it’s putting them off getting married. Meanwhile, 32% said inflation is making them put off saving into a pension.

On the other hand, from the people surveyed, 41% said they hadn’t had any “big plans” this year such as home improvement, buying a home or retiring. And, of those, who did not cite inflation pressures as an issue, 50% of 25-34 year-olds say they’re planning to buy a home this year.

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Mr Shannon said the current situation has made many people “think twice” when it comes to major outlays. “Many have not only put their plans on hold, but some have removed them entirely from their 2023 calendar in order to meet rising interest rates, rent, energy, and food bills,” he said.

“It costs much more to fill the trolley or to heat a house than it did this time 12 months ago and it is understandable that people are cautious with their finances as they do not know when this storm will pass.” 

However, for those who are looking to press ahead, home improvements do top the list of priorities this year. Of the 15% of people who are not putting off any big plans, a fifth of them are moving forward with plans to buy a house or apartment this a year.

“Making home improvements remains top of the agenda for people who are unaffected by inflationary pressures — with more women (55%) than men (32%) intending to do this,” Mr Shannon added.