ONE IN FIVE IRISH HOUSEHOLDS did not have a bank account in 2008, according to a new report from the ESRI.

The 2008 study also found that 31 per cent of people did not have access to credit facilities including credit cards, loans and overdrafts, however almost two-thirds of those people said they did not need to borrow money.

In its report, the ESRI said that these ‘excluded’ households are at risk of “becoming increasingly marginalised” as the country moves further towards being a cashless society.

It said little progress appears to have been made to reduce the number of people excluded from banking:

A commitment to provide basic bank accounts to excluded groups was included as a part of the recapitalisation of the Irish banks in 2008. There is little evidence on progress on this commitment to date and it seems likely that increases in bank charges will exacerbate rather than reduce the problem.

Over-indebted

Almost 5.5 per cent of households were considered to be over-indebted in 2008.

This means they were in arrears on loan repayments on more than one occasion in the past 12 months, they found housing costs or loan repayments a heavy burden, and they were unable to raise money for unexpected expenditure.

The ESRI said the level of over-indebtedness ranged widely between different areas of the public. Of all of the over-indebted households, 24 per cent were households headed by an unemployed person, and 22 per cent were local authority tenants. Twenty-three per cent were among lone parent households.

The study’s authors said it “is likely that over-indebtedness has increased significantly since 2008″, but detailed data for more recent years has not become available yet. The report says that lack of resources was the main factor behind that year’s over-indebtedness, rather than borrowing or consumption levels:

Consequently, policies to tackle poverty rather than those that focus solely on responsible borrowing and consumer protection, are likely to be needed to impact positively on the problem of over-indebtedness.