IRISH HOUSEHOLDS ARE the third most indebted in the European Union, despite reducing their debts more than any other country in the space of a year.

Ireland’s household debt fell by 25.1 percentage points over the year. As shown in the chart below, this is a much bigger decrease than the other countries examined.

Ireland's household debt decreased significantly more than the other countries examined. European Central bank European Central bank

Household debt is the total of household loans, including mortgages, loans and credit cards.

Spanish and Portuguese households reduced their debts by 6.1 percentage points and 4.6 percentage points respectively.

Household debts in Ireland have been decreasing since 2008, when the debts peaked at  €203.7 billion.

Household debts decreased by €1.6 billion (1.2 percent) during the final months of 2015. This is due to Irish households repaying their debts and debts being written down or written off.

Household debt is now at its lowest level since Q1 2006 Central Bank of Ireland Central Bank of Ireland

Signs of household debt sustainability continued to improve during the final months of 2015. The fall of debt as a proportion of disposable income reflects both a decline in household debt and a strong growth in annual disposable income.

The Irish annual disposable income is at its highest level since mid 2009.

The ratio of household debt to disposable income has fallen by 60.2 percentage points. Debt as a proportion of total assets has also decreased.

Mainly due to an increase in the value of houses, the household net worth has increased by 1.4 per cent to €626.1 billion in the final months of 2015.

The final months of 2015 also saw the highest level of investment in financial assets by households since late 2009.

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