Consumers are being forced to borrow just to meet the cost of their essential household bills, according to new research from Switcher.ie, the independent price comparison and switching service.
The latest findings show that as many as three in five Irish households (59 per cent ) had to borrow to meet the costs of essential household bills last year.
A third of consumers resorted to using credit cards, while others turned to overdrafts (17 per cent ) and bank loans (12 per cent ). Two in 10 borrowed money from family and friends, while 13 per cent were gifted money to pay for troubling household bills.
The findings also spell potentially bad news for longer-term savings, with 40 per cent of people forced to dip into their nest eggs last year to pay for bills.
The findings show that motor insurance is now a serious concern for cash-strapped households. With CSO figures showing that premiums have risen by 57 per cent in the last three years, four in 10 consumers say that their motor insurance bill puts them under financial pressure.
When it comes to bill woes, mortgage and rent payments are the next biggest cause for concern, putting one third of people under pressure, closely followed by gas and electricity (27 per cent ) and motor tax (27 per cent ).
Eoin Clarke, managing director of Switcher.ie, said: “Many of us are facing into the new year with debt, be it from credit cards, overdrafts or even loans from family and friends. And for lots of consumers, this debt is stacking up because the cost of running a home, and paying for essentials like gas, electricity, broadband, and phone is simply too high.
“If you’re starting off January in debt and you’re worried about it, like one in five of the people surveyed, there are some simple steps you can take to ease the pressure. The first thing to do is to draw up a realistic budget, including all your income and outgoings, as well as a buffer for unexpected expenses, and stick to it. In addition to having a good budget, making savings on household essentials will really help on a day-to-day basis, and is a lot simpler than many people may think.
“Energy bills, for instance, are one of households’ biggest headaches, but savings can easily be made if consumers make some small changes to their energy usage - by turning off lights when a room is not in use, or plugging out appliances rather than leaving them on standby. The energy market is also really competitive at the moment and consumers who shop around for a better deal and take advantage of the offers out there could save up to €402 a year off their bill.
“This is a significant saving for minimal effort and could go some way towards clearing existing debt and will hopefully help householders avoid going into debt to pay basic bills like this in the future.”
For more information visit Switcher.ie