THE VAST MAJORITY of Irish people are worse off financially than they were a year ago, a worrying new survey has found.
Research conducted by Red C on behalf of The Journal found that 76% of people are in a more difficult financial position than they were last year.
This is especially high among older people, parents and people who live outside of Leinster.
The research found that 48% said they were slightly worse off while 28% responded by saying they were “much worse off financially”.
Just 1% of people surveyed said they were much better off with 5% saying they were slightly better off than this time last year.
The results come after a year of ever increasing inflation as well as significant increases in daily cost of living expenses such as energy prices and petrol/diesel.
The coalition is currently engaged in discussions on how best to alleviate the crisis for people across the country.
This year’s Budget has been moved forward to the end of this month to announce efforts to combat the cost of living crisis. However, there was some hint of good news for the upcoming Budget as it emerged last week how the exchequer recorded a surplus of €6.3 billion.
This compares to a deficit of €6.7 billion recorded to end-August 2021, an improvement of €13 billion.
A statement from the Department of Finance stated that the “increase reflects strong growth in tax revenues and a decline in voted current expenditure due to the unwinding of Covid-19 supports”.
On a European level, the European Central Bank yesterday announced its decision to raise interest rates by a record 0.75 percentage points in a bid to combat inflation.
A statement released by the ECB stated that it took the decision because inflation remains far too high and is likely to stay above target for an extended period.
“Soaring energy and food prices, demand pressures in some sectors owing to the reopening of the economy, and supply bottlenecks are still driving up inflation. Price pressures have continued to strengthen and broaden across the economy and inflation may rise further in the near term.
“As the current drivers of inflation fade over time and the normalisation of monetary policy works its way through to the economy and price-setting, inflation will come down. Looking ahead, ECB staff have significantly revised up their inflation projections and inflation is now expected to average 8.1% in 2022, 5.5% in 2023 and 2.3% in 2024,” the statement read.
The increase means those on tracker mortgages face higher bills.
Energy Prices
The cost of electricity and gas has increased exponentially since the outbreak of the war in Ukraine.
Minister for Energy Eamon Ryan yesterday brought a memo to Cabinet setting out a series of actions to shore up energy supply.
Ryan confirmed that this year’s budget will involve ramping up the supports that householders got earlier this year, including another €200 energy credit.
He said it will be a combination of the same social welfare measures which target those most at risk of fuel poverty, as well as the energy credit “which we gave to every single householder build because everyone’s going to be affected”.
If the public, the Government and business do not cut back on their energy consumption between now and the end of the year, energy supply will be “very tight”, said Ryan.
It is expected the energy credit will be significantly higher than the last amount given out, with sources indicating it could be more than double.
His comments came as European Commission President Ursula von der Leyen said the EU will propose to cap the huge revenues earned by nuclear and renewable power companies that benefit from exorbitant electricity prices.
Leyen also said that a mandatory target for reducing electricity use at peak hours will be on the table, as the EU has to save electricity, but “in a smart way”.
Inflation
The cost of food and drinks have also increased significantly worldwide.
The latest statistics, published by the CSO in June of this year, found that producer prices rose by 49.1% for dairy products, by 14.5% for meat and meat products, and 11.7% for grain milling, starches and animal feeds.
Jillian Delaney, statistician in the CSO’s Prices division, said: “Prices in several food categories produced by Irish manufacturers were significantly higher in June 2022 compared to the same month last year.
This has resulted in knock-on effect for the Irish consumer who is now paying more for their weekly shop than they were 12 months ago. It has been estimated by supermarket analyst Kantar that the average grocery bills could rise by over €450 a year. The analysts said that grocery prices in Ireland have risen by 6.5%, the highest jump in a decade.
Some of the largest price increases were amongst essential items such as butter, eggs, bread and flour.
Education costs for parents
One of the cohorts the Red C found to be feeling the pinch more than most was parents of dependent children.
The Society of Saint Vincent de Paul’s (SVP) last month reported how it received, on average, 30 calls an hour from parents who are unable to afford the costs of sending their children back to school this year.
A statement from the SVP said that almost half of the requests came from one parent families, which they said reflected “the very high levels of poverty experienced among these families”.
Some of the stories SVP members heard when calls are made seeking help include parents being asked for €150 on the first day and being told “everyone has to pay” and that’s after paying for books, uniforms, tracksuits and stationery.
It’s a similar story for people trying to get into third level education.
A 25% increase in student grants and a considerable reduction in third-level fees are among the measures being considered.
A cut in the €3,000 college contribution charge is under consideration.
Higher Education Minister Simon Harris said earlier this week: “You can improve the student grants system, both in terms of the amount and making sure more families qualify. And you can also look at the registration fee,” adding those are two levers at his disposal.
However, third level students are also having serious trouble accessing the rental market with many priced out of living near their colleges.
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