closer to the edge november 2011
DESCRIPTION
New research for the Irish Daily Mail and RTE Frontline shows Irish consumers are under increasing pressure ahead of the 2012 Budget. The research looks at household financial stresses, preferences for tax increases vs spending cuts, and issues such as negative equity.TRANSCRIPT
1 RTE Frontline/Irish Daily Mail
An Amárach Briefing for RTE Frontline/Irish Daily Mail
November 2011
RTE Frontline and the Irish Daily Mail have commissioned Amárach Research to examine the mood of the nation ahead of Budget 2012. With economic uncertainly increasing rather than decreasing, we have examined the current financial circumstances of the nation’s households and families, and their preferences for tax and spending changes in the forthcoming budget. This report summarises the main findings, and are based a nationallly representative, online survey of 1,000 Irish people in November 2011.
RTE Frontline/
Irish Daily Mail
1. Under Pressure
consumer behaviour
2. Debt Problems
mortgages & loans
3. Balancing Act
Budget 2012
1. Under Pressure
5 RTE Frontline/Irish Daily Mail
Feeling the Pinch
The vast majority of Irish adults have seen their disposable incomes fall in the past year. Women and those aged 45-54 are more likely to have seen a fall in incomes.
Source: Amárach Research, November 2011
%
Decreased
%
Increased
All Adults 68 14
Males 65 14
Females 70 14
18-24s 37 31
25-34s 62 18
35-44s 78 11
45-54s 86 6
55+ 74 7
Q. Would you say your level of disposable income has
increased or decreased over the last year?
39%
29%
18%
11%
4%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
decreased significantly
decreased slightly
no change either way
increased slightly
increased significantly
Incomes Under Pressure
6 RTE Frontline/Irish Daily Mail
Deep Impact
Tax increases have been the predominant source of pressure on incomes. Women and 25-34s are more likely to miss a loan repayment.
Source: Amárach Research, November 2011
Q. Have any of the following happened/occurred in your household in the
past 12 months?
31%
9%
15%
19%
54%
0% 20% 40% 60%
none of these
missing a mortgage repayment
buying groceries on credit due to insufficient funds
missing a loan repayment
a reduction in income due to tax increases
Past Experiences
%
None
%
Miss
Payment
All Adults 31 19
Males 28 16
Females 34 22
18-24s 44 17
25-34s 26 26
35-44s 23 18
45-54s 22 20
55+ 38 15
7 RTE Frontline/Irish Daily Mail
Making An Effort
Just over half of all adults have made a strong effort to cut spending. Once again, women and those aged 45-54 are more likely than others to have changed.
Source: Amárach Research, November 2011
%
Strong
%
Slight
All Adults 56 38
Males 52 42
Females 60 34
18-24s 38 51
25-34s 58 36
35-44s 60 36
45-54s 75 22
55+ 51 43
Q. What effort, if any, have you made in the past 12 months
to reduce you household expenditure?
56%
38%
6%
0%
10%
20%
30%
40%
50%
60%
A strong effort
A slight effort
No effort at all
Cutting Expenditure
8 RTE Frontline/Irish Daily Mail
Cut Leaders
Source: Amárach Research, November 2011
Q. In which of the following areas, if any, have you reduced household expenditure in the past 12 months?
86% 83% 80% 74%
58%
26%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
leisure expenses
groceries & clothing
phone & energy
car & travel insurance childcare & schooling
Areas of Reduced Expenditure
9 RTE Frontline/Irish Daily Mail
Bridging the Gap
3 in 10 adults have borrowed from friends or family in past year. Women and young people are more likely to borrow from friends and family; 45-54s more likely to use their credit card to pay bills.
Source: Amárach Research, November 2011
%
family
%
credit
All Adults 32 24
Males 31 23
Females 34 25
18-24s 42 19
25-34s 46 27
35-44s 39 22
45-54s 30 37
55+ 12 19
Q. Over the past year, have you done any of the following?
32%
24%
9% 5%
47%
0% 5%
10% 15% 20% 25% 30% 35% 40% 45% 50%
borrowed money from
friends or family
depended more on
credit card to pay bills
borrowed money from a money lender
not declared income to avoid tax
none of these
Making Ends Meet
10 RTE Frontline/Irish Daily Mail
Savings Habits
Source: Amárach Research, November 2011
Q. Do you save regularly?
48% 52%
37%
29% 27% 25%
18% 15%
34%
0%
10%
20%
30%
40%
50%
60%
don't save regularly
save regularly
dipped into
savings to pay for:
groceries & clothing
phone & energy
bills
car & travel
expenses
insurance leisure expenses
childcare &
schooling
none of these
Rainy Days
Q. All who save regularly: Have you had to dip into savings over the last year to help pay for any of the following?
11 RTE Frontline/Irish Daily Mail
Future Concerns
Source: Amárach Research, November 2011
Q. How concerned that the following might happen in the next 12 months?
66% 65%
45% 42%
39% 38% 33%
0%
10%
20%
30%
40%
50%
60%
70%
Income cut for self or partner
Income reduction due to
tax increases
Reduced hours for self or partner
Redundancy for self or partner
Missing a loan repayment
Buying groceries on credit due to lack of funds
Missing a mortgage repayment
Concerns for Next 12 Months
12 RTE Frontline/Irish Daily Mail
Difficulty Coping
The majority of adults would find it difficult to cope with a €50 reduction in after tax income. Women and 45-54s are the most vulnerable to even the lowest of the reduction scenarios.
Source: Amárach Research, November 2011
€50
decrease
%
Easily
%
Difficulty
All Adults 24 57
Males 28 51
Females 20 64
18-24s 30 50
25-34s 26 55
35-44s 13 66
45-54s 16 65
55+ 31 53
Q. We would now like you to tell us the likely impact that the following
scenarios would have on your after tax income:
€50/100/150 monthly decrease in income
24% 12% 8%
19%
13% 9%
57% 75%
83%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
€50 monthly decrease
€100 monthly decrease
€150 monthly decrease
Cope Easily Neither/Nor With Difficulty
2. Debt Problems
14 RTE Frontline/Irish Daily Mail
Mortgage Matters
Roughly equal proportions of adults pay or don’t pay a mortgage. Men and those aged 45-54 are more likely to pay a mortage (solely or jointly).
Source: Amárach Research, November 2011
%
Pay
Mortgage
%
Don’t Pay
Mortgage
All Adults 50 50
Males 58 42
Females 45 55
18-24s 14 86
25-34s 50 50
35-44s 61 29
45-54s 68 32
55+ 47 53
Q. Are you responsible - solely or jointly - for paying a
mortgage on your home?
50% 50%
pay mortgage don't pay mortgage
15 RTE Frontline/Irish Daily Mail
Negative Equity
The majority of those with mortgages report ‘positive equity’ in their home. Men and those aged 25-34 are more likely than other mortgage payers to experience negative equity.
Source: Amárach Research, November 2011
%
Negative Equity
All Mortgagees: 22
Males 26
Females 17
18-24s 11
25-34s 33
35-44s 30
45-54s 14
55+ 15
Q. Base – all who pay mortgage: Now thinking about the value of
your home today, do you think it is worth more than you currently
owe on your mortgage, about the same as you currently owe on
your mortgage, or less than you currently owe on your mortgage?
50%
19%
22%
9%
Positive & Negative Equity
value of home greater than mortgage
value of home same as mortgage
value of home less than mortgage
don't know
16 RTE Frontline/Irish Daily Mail
Mortgage Type
Source: Amárach Research, November 2011
Q. What type of mortgage do you have?
46% 30% 24%
8%
86%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Variable Fixed Other Contacted to switch
Not contacted
Q. Has your mortgage provider contacted you within the last year and suggested you switch type?
Base: All responsible for paying mortgage on the home
17 RTE Frontline/Irish Daily Mail
Missed Payments
Source: Amárach Research, November 2011
Q. Have you missed any mortgage repayments in the past 12 months?
81%
19%
73%
26%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
Have not missed any mortgage repayments
Have missed one or more mortgage
repayments
Have not missed any other loan
repayments
Have missed at least one loan
repayment
Q. In the past 12 months have you missed a repayment on any other debt (e.g.: car loan, utility bill, phone bill etc)?
Base: All responsible for paying mortgage on the home
Average
number of
monthly
repayments
missed = 3.3
18 RTE Frontline/Irish Daily Mail
Missed Payments
Source: Amárach Research, November 2011
Q. If you have missed a mortgage repayment, have you been contacted by your mortgage provider?
Q. If so, how were you contacted?
19%
77% 79% 72%
8% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90%
Not contacted by mortgage
provider
Contacted by mortgage provider
If contacted, how?
Post Phone Email
Mortgage Provider Contact
Base: All mortgage payees who have missed a repayment in past 12 months
19 RTE Frontline/Irish Daily Mail
Health Insurance
Source: Amárach Research, November 2011
Q. Do you have health insurance? E.g. with VHI, Aviva, Quinn, etc. Q. Will you renew your Health Insurance policy the next time it is due for renewal?
Base: All Adults
53% 47%
77%
5% 18%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
Don't have health
insurance
Have health insurance
Renewal plans:
Will renew Won't renew Don't know
Plans for Renewal
83%
13%
4%
Will maintain present level of cover
Will reduce level of cover
Will increase level of cover
Q. When renewing your Health Insurance policy; which of the following do you intend on doing?
3. Balancing Act
21 RTE Frontline/Irish Daily Mail
Budget Balance
There is a clear consensus in favour of spending cuts over tax increases. There are no gender differences, though 35-44s favour cuts more.
Source: Amárach Research, November 2011
%
Tax
Increases
%
Spending
Cuts
All Adults 33 67
Males 32 68
Females 33 67
18-24s 38 62
25-34s 33 67
35-44s 31 69
45-54s 32 68
55+ 31 69
Q. What do you think should be the share of tax increases
and spending cuts in meeting its requirements?
33%
67%
tax increases spending cuts
22 RTE Frontline/Irish Daily Mail
Closing the Budget Gap
Source: Amárach Research, November 2011
Q. For each tax or cut please say whether think the government should go ahead or not with each measure
76%
41% 39% 39% 39% 38% 35% 33% 33%
23% 20% 16%
24%
59% 61% 61% 61% 62% 65% 67% 67%
77% 80% 84%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Increase top income tax
rate
Cut social welfare rates
to unemployed
Cut single parents
allowance
Introduce a septic tank
charge
Reintroduce university
fees
Introduce water rates
for households
Cut childrens benefit
Introduce property tax
for households
Increase rate of VAT
Cut in state pension
level
Increase bottom
income tax rate
Increase charges for
doctor visits/A&E
go ahead don't go ahead
23 RTE Frontline/Irish Daily Mail
Child Benefit
Source: Amárach Research, November 2011
Q. Do you receive child benefit?
Q. For how many children do you receive child benefit?
67%
33% 35% 40% 25%
0%
10%
20%
30%
40%
50%
60%
70%
80%
don't receive receive benefit
if receive, no. of children:
1 2 3 or more
Child Benefit Recipients
24 RTE Frontline/Irish Daily Mail
Main Use of Child Benefit
Source: Amárach Research, November 2011
Q. What do you do with your child benefit payments?
Base: all who receive child benefit
53% 50%
42%
20%
0%
10%
20%
30%
40%
50%
60%
spend on groceries
etc
spend on the children
use to pay bills
put in savings account
%
Save Benefit
All Recipients 20
Males 25
Females 16
18-24s 28
25-34s 22
35-44s 17
45-54s 18
55+ 30
25 RTE Frontline/Irish Daily Mail
The Budget & Child Benefit
Source: Amárach Research, November 2011
Q. If cuts were to be made to child benefit payments in the
upcoming budget how would you prefer it was done?
Base: all who receive child benefit
63%
20%
13%
4% Introduce means testing
decrease average amount
tax just like other income
other
%
Means Test
All Recipients 63
Males 61
Females 64
18-24s 61
25-34s 70
35-44s 69
45-54s 50
55+ 43
RTE Frontline/
Irish Daily Mail
Things are tough for Irish families, and they are about to get tougher. The RTE Frontline/Irish Daily Mail survey shows that a growing minority of Irish adults are ‘running out of road’ in terms of their financial wellbeing. The impact of Budget 2012 on citizens, taxpayers and consumers will play a significant part in our economic prospects next year.
RTE Frontline/
Irish Daily Mail
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and cati surveys; as well as qualitative
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Irish Daily Mail
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