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OVER HALF OF Irish households cannot save income regularly, and this figure rises to 77% for low-income households as they feel the squeeze from the debt burden placed upon them, according to new research from Tasc (Think Tank for Action on Social Change).
The research found that over one in three renters in the private sector, who are in debt, are now overburdened by debt repayment while slightly less (28%) are in arrears with their utility bills.
People renting in the private sector are nearly four times more likely to go without heat due to lack of money than those who own their own homes.
Tasc is also calling on more action at government level to integrate managing debt into its interventions on housing, health and other services.
According to the Tasc report, getting into manageable levels of debt is often seen as a “personal failing or problem… in both policy and practice”.
“The report challenges this notion and recognise that debt is intimately connected to key structural and political factors outside individual action and behaviour,” Tasc says.
It classifies those “struggling” if they are at the greatest risk of financial difficulty with debt repayments that are a “heavy burden”.
Tasc says those who are in the private rental sector are “struggling” due to some of the factors listed above
Furthermore, it says a significant number of working households are both “struggling” and “squeezed” – barely getting by – because one in five workers in Ireland with debt are struggling with debt repayment burdens and nearly 50% of all workers are at risk of becoming over-indebted in the future.
Single parents, similarly, are also described as “struggling”.
Amie Lajoie, senior Tasc researcher, said: ““A large number of people in Ireland are living without financial security. Instead they face high living expenses, no savings and are at risk of being over-burdened with debt.
They don’t have extravagant lifestyles. They are just paying the bills to meet basic needs. If they lose their job, or if they have to deal with an unforeseen issue, they are unable to cope.
This is a very precarious situation, not just for individuals and families, but for the economy. We have to change the way we regard dangerous over-indebtedness – to shift it from being an issue of blame or solely personal responsibility to a national policy issue, where government programmes integrate managing debt into actions on housing, health and other services.
The report was compiled using a number of data sources, including money advisors with the national Money Advice and Budgeting Services (Mabs) and a review of quantitative data from the 2017 EU survey on income and living conditions.
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So lucky we have a think tank to empower us with such information, telling us something that is clear & obvious! What next, a rent tribunal?
@Conor Dunne: I suppose people paying back a mortgage from the Celtic tiger times do not struggle and are living extravagant lives? Their houses are in negative equity still.
@Ronan Mc Namara: Negative equity doesn’t affect a mortgage repayment and very few are in negative equity at this point I time Mortgage repayments are generally less than rent on an equivalent property.
@Ronan Mc Namara:
Buying a house is a huge investment, people are responsible for their own investments. nEgAtIvE eQuItY is only an issue if you plan to sell, otherwise you’re paying for what you bought. Even if you bought at the height of the housing bubble, you’re paying less than an average renter. So honestly, go cry about it.
If you lost your job and are struggling to pay for a mortgage that you can no longer afford, then yes of course that’s terrible, there should be help for people who lost their jobs. But most people crying about negative equity are simply people who made bad investments, and really, dug their own hole.
Sure property values are higher than 2008 levels now anyway. Make a bad investment -> lose money. If only we had treated the banks that way we’d have only half our current mess
Totally agree with all above. There was a woman. crying on Joe Duffy last week who had 35 properties and a few of them were in negative equity. Which I think is kind of irrelevant considering they have been rented for the last 10years and probably will be for another 10. it is impossible for people renting to save for a rainy day so if anything unforeseen happens they are in dire straits immediately.
@Ronan Mc Namara: that’s old chestnut excuse is too worn out now. It’s called personal responsibility – no one forced them to buy a over priced house. They could have done what the rest had to do – rent
Deposit interest rates are so low it’s not worth saving.
@John Considine: If you’re saving to buy a house it’s absolutely worth it regardless of how bad interest rates are.
@John Considine: Agreed. I feel like they dont need savers anymore.The banks can go to the Central Bank, get a loan for 1%, add another 1-2% on top of it and repackage it as a mortgage for the Irish consumer.
I guess if they go back to the previous ways of doing things, mortgage interest rates would have to be 5-6% so saving deposits can have a 3% interest rate.
I just wish our regulators could release a booklet every year on the best ways to save/create assets. I’m having to get most of my financial advice from YouTube these days.
@Mark Murray: “I’m having to get most of my financial advice from YouTube these days.”
Considering the track record of financial ‘experts’ in Ireland you’re probably better off.
@John Considine: It’s worth saving to ensure you have a buffer of 3-6 months salary.
@Will: I’m sure there are good ones but feel they have to be independent advisors rather than a banks or brokers. But definitely recommend learning as much as possible before handing over money.
@jerry Slattery That ‘ electric picnic’comment reminds me of Joan burtons remark about the water protestors owning mobile phones
TASC is basically a left of centre think tank of academics and Union types. Can’t argue much with analysis. Renters must find it difficult to save. That’s why despite the surplus economy and full employment the FG message did not resonate.
Build more and build affordable and social.
Wait until the Landlord’s Front of the Greater Area comes on here moaning for our sympathy about how much tax they have to pay, and how hard it is to be a landlord. Heart wrenching stuff really. Sure, tis all renters fault…didn’t you know!!!
@RobPup:
It’s terrible, after they pay off the mortgage on the house I can sell in 15 years for €250,000 (at which point I won’t need to every work again), I barely make a few hundred a month for doing nothing.
It’s SOOOOOO HAAAARD being a landlord, I have to pay INCOME TAX???!?!???!! Just like my tenants??? The government needs to give me yet another tax cut, after all, rental income should be free money for nothing. Now let me tell you more about how expensive my mortgage is, without pointing out that after the mortgage is paid I have a massive asset that I can retire on.
@David Bourke: the complaint isn’t about paying income tax as such. The complaint is it is taxed differently than any other investment and income coming from the investment. They also changed the rules adding extra taxes and expenses. Say if you invested into a pension and the government came along and took 6% away and charged you €300 for having it too. On top of that your income drops and it also costs you more to keep putting in your contributions. See how you feel then. That is what happened to landlords
@Craic_a_tower:
Oh the poor landlords. You forgot to mention that landlord income has been rising constantly & dramatically, year on year for the past 10 years. They’ve also implemented loads of tax cuts for landlords that you never hear mentioned while landlords are crying. Mortgage interest as a write-off (100% write-off on 2019 builds).
€300? That’s a week’s rent of a single room in Dublin, it’s nothing.
Landlords making crazy money as it is, but they never stop crying about their expenses. Welcome to business, you get taxed, you’re not producing anything, you’re getting money for nothing just because you had money to spend, so stop crying.
I didn’t forget to mention it I just didn’t mention it. What you are not considering is the years where rent dropped and it was at that point charges and expenses were increased while rent was dropping. I alluded to this in my post but you didn’t understand. For ever €1 increase in expenses to a landlord it takes €2 increase in the rent to recover it. The return to 100% mortgage relief was that a return after removing it for 10 years. Renting is a service and requires work and risk. Did your pension fund ever ring at 4am because it couldn’t find their keys? Rent has not increase year on year for 10 years. Prove it did if you want to make that claim. There was one returned relief all other changes were increases to costs to landlords. You don’t know what you are talking about
@Craic_a_tower: you keep telling people they don’t understand. Like only you can see what’s what. Oh, we understand. Renting out property is not a service to anyone but yourself. Its already been explained to you. Getting the odd call at 4am is part of your chosen occupation. Did you pick up pieces of people off the road after car accidents? Or risk your life putting drug dealers in jail? Or putting out fires? Rescuing people from the sea/rivers? These are some of the things renters do for a living. They dont moan about it. They just do them and then you take 80-90% of their income for the roof over their head while moaning how hard it is all the way to the bank. Thats the service you provide.
@RobPup: you don’t know what I do for a living or how many people rely on what I do to survive. I didn’t decide to become a landlord it was a family business just like owning a shop. It is a service no matter what you think. So gardai, nurse etc… don’t moan about their work? Strange how they have gone on strike so. I am not charging anybody 80-90% of their income. I have dealt with drug dealers, domestic abuse, addiction, fires, floods etc… as a landlord but according to you I just sit back and take in money. How many times have you been threatened doing your job? Common to experience as a landlord and if I get injured I don’t have any claim to make like the gardai do. The reason I keep tell people they don’t understand because they make comments that are untrue like you have.
@Craic_a_tower: your whatabouttery is never ending and, frankly, pathetic. You do not and will not inspire any sympathy in anyone other than another landlord. You must be very obtuse to not realise that and keep carrying on like that. Just pleasr stop for your own dignity, really. Putting yourself right up there with life savers and what not… there’s a definite touch of delusion there pal…no need to say you are most definitely FFG of course. You must be delighted Leo and Mehole are going to marry soon. Hey, this all seems to matter to you so good luck.
@RobPup: you can look back and see I haven’t personally insulted you. You question my dignity all you like
Bring on Electric picnic and all the other outdoor events which are populated by young people renting
@jerry slattery: not all have trouble making ends meet, but a disproportionate amount do. And lots of festivals have closed down.
@jerry slattery: they’re students, they have to rent. Should they not have any fun because they’re renting? I don’t understand your point here.
@jerry slattery:
they’re students, they have to rent. Should they not have any fun because they’re renting? I don’t understand your point here.
@jerry slattery: Great to be so smug.
@SC: I’m with you man. Just the other day I saw a load of renters on a bus! Maybe they should spend less time complaining and more time walking. I also heard a bunch of upstarts moaning about their rent and how they might be facing homelessness, while they were eating …food! Food?!? Can you believe the cheek of them?!? Hanging’s too good for them eh?
@jerry slattery:
Yes, how dare they try enjoy their lives, they should be saving!
(Except, since they have feck all to save, there’s really no point in trying to save for something they’ll never afford).
Assuming they can save 50 euro a week, they can save for electric picnic in a couple of months. If they want to save for a mortgage for the cheapest, mouldiest, tiny apartment in Dublin, which is €150,000, they’ll need a minimum deposit of €15,000 + solicitor fees of say €2000. So €17,000. That will take them 340 days, or 6 and a half years, by which time inflation will have made that €150,000 apartment now cost about €180,000 (probably more if current trends continue).
So they can either save every penny they have and live a miserable youth so they can get a mortgage for a mouldy shoebox in Ballymun when they turn 30, or they can enjoy a nice festival and forget about their problems for a weekend.
Let them have their fun, jesus
@jerry slattery: What does that mean? Are young people not supposed to live? Would you like them to be as austere and miserable as you seem to be, Jerry, the Fine Gael, “I’m alright Jack” apologist.
If the government want to help renters they should give them a 4% tax rebate for all rent paid. Would make sure landlords are tax compliant too. The only issue is REITs don’t pay tax on the rental income so the tax would come from the small landlords tax payments.
@Craic_a_tower: Good idea.
One can hardly expect an outfit named “Think Tank for Action on Social Change” to publish any other type of results from their investigation. I’m sure not all people struggling with debt got there due to irresponsible, avoidable spending and the lure of credit, but I’d like to learn more about the parameters they used.
I dunno how they are surviving. I own my house thank god so no rent or mortgage, but barely have enough with my husband having been made redundant and trying to put my daughter through college with no grant. The country is a joke.
Can’t understand why young renters don’t just move abroad and set up a happy life for themselves, it must be a miserable existence sharing your space with strangers, Dublins a fairly grim city as it is without added crap….
@Pat Corrigan: Yes once you leave Ireland there are no problems and every other country is paradise. Have you seen how expensive rent is in London, Paris, Rome etc… There are housing shortages in many many countries and cities. A friend of mine rents in Madrid. He pays €1200 a month for a bedsit that wouldn’t be allowed here when bedsits existed. Think of a box room divided to have a bathroom and kitchenette in it and that is where he lives
@Craic_a_tower:
Average rent in Madrid: €1000
Average rent in Dublin: €2000
Your mate is getting fleeced, I know people in Madrid and they pay nothing close to that.
€1200 for a room with its own kitchen and bathroom would be considered a bargain in Dublin. You’re so out of touch if you think that’s worse than here.
Let me guess you used google and took the first results you got. You compared apples and oranges. The place he is renting wouldn’t be legal here so you cannot rent the same here. The size of rental properties for single people in Madrid is very very small. Rome apartments are equally small and many wouldn’t be legal here either. You can of course rent a place bigger in Madrid but the central properties are very small and expensive. He lives in the city centre not the suburbs. Same way living in Dublin city centre is more expensive than the suburbs.
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