Crisis alert as austerity hits savings
CSO figures show two in five people in Ireland have no savings in their accounts.
The details, available at irishexaminer.com, show one in four people have used “some or all” of their savings on basic goods such as food shopping or to pay off bills, while 8% have used savings to pay off loans.
The findings were in the CSO’s latest national household survey which examined trends during the third quarter of 2012.
Of those who do have some savings, one in three have reduced it due to increasing financial pressures, with just one in 10 raising their rainy day funds.
And an age breakdown of the figures shows younger people are the worst savers in the country — an issue which potentially risks another personal financial crisis, even if an economic recovery takes place.
According to the CSO, 67% of 18-24-year-olds have no savings whatsoever compared to 41% of 25-34-year-olds, 36% of 35-44-year-olds and 29% of people over the age of 65.
Half of people who finished their education at school-level said they have no savings compared with one in four who have a third level qualification.
Brendan Dempsey, a regional vice-president of St Vincent de Paul, said it could take some families “years to get out of debt”.
“People say a rising tide lifts all boats but it doesn’t. It never has. The economy will eventually improve but it won’t lift everybody, it will take some families years to get out of debt again. At the moment, savings don’t even enter these families’ thoughts, they’re spending any money they have to pay bills, keep their children in clothes, get food.
“We even know of cases [where] people have sold their wedding rings to pay off debt and for basic goods. There’s two affects of austerity here — people struggling, absolutely desperate to get by and then those same people not being able to plan for any future.
“The Government thinks it can get blood from a stone, but if you squeeze a stone too hard you’ll eventually smash it to pieces.”
Consumer Association of Ireland chief executive Dermot Jewell said it has now become “an absolute necessity for consumers to use savings just to live”.
“Anything people have had saved up is being completely eroded away.
“Saving is really important if you can manage to do it at all, and An Post have some good deals over three-to-four years.”
The CSO document also shows that 40% of people are “very concerned” or “somewhat concerned” about their levels of debt. This includes more than half (54%) of the 34-44 age group — the highest out of any age bracket.
The figures come less than a month after the Money Advice and Budgeting Service said it has already overseen more than 2,000 “emergency cases” this year.
* MABS help line: 0761072000, Monday to Friday from 9am to 8pm.
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