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Irish Independent
5 days ago
- Business
- Irish Independent
Large numbers of consumers confused about impact of inflation on purchasing power
And many consumers have a limited understanding of how the tax on savings accounts works. That is according to a new survey that lays bare the extent of financial illiteracy in this country. The PTSB 'Reflecting Ireland' research revealed that nine out of 10 of respondents think they have average or high financial literacy. But specific questions asked as part of the survey contradict this view that people understand personal financial matters. The research found that four out of 10 respondents could not correctly answer a Junior Cert level business sample exam question on the impact of inflation on household purchasing power. They were asked if high inflation is bad for their purchasing power – the quantity of products and services available for purchase with a certain amount of money. The research found that only 58pc of respondents identified that high inflation is bad for their purchasing power. Some 27pc got it wrong, answering that high inflation was not bad for their purchasing power. And 10pc incorrectly said their purchasing power would remain the same in a period of high inflation. Some 5pc said high inflation makes their personal finances more stable. ADVERTISEMENT Consumers were also asked about the impact of DIRT (Deposit Interest Retention Tax) on their savings. Only of respondents were able to correctly calculate the total amount of savings they would earn after DIRT is applied. PTSB said these findings were consistent with other aspects of the survey, which also asked respondents to assess for themselves their ability to understand financial terms, concepts and products. Just under 10pc of respondents said their financial literacy is low. This cohort reported feeling down about their finances and feeling uncomfortable talking about money to family and friends. Some 40pc of respondents cited the belief that feelings of embarrassment can be a key barrier to improving financial understanding. The survey, conducted by Core Research, also found that only 53pc of people are comfortable talking to a friend or family member about money. PTSB chief sustainability and corporate affairs officer Leontia Fannin said the results of the survey show that more needs to be done to raise financial literacy levels. 'These results highlight that support is needed to educate people on the importance of financial literacy in order to increase financial resilience, inclusion, and protection against financial scams,' she said. Almost half of respondents felt technology has helped them to better understand fees and charges, financial products and services available, and their personal spending habits. This increases to an average of 57pc for those aged between 18 and 24. Those over-55 are the least likely group to have used technology to help understand their finances better. A drop in consumer sentiment towards the economy was also recorded in the replies. More than half believe the country is on the wrong track, a number which has grown significantly since the start of the year. Some 42pc say their financial situation has deteriorated over the past 12 months. And a third say they expect to be worse off in a year's time, and a similar proportion say they will be no better off.
Irish Times
26-06-2025
- Business
- Irish Times
Irish consumer confidence improves as public adapt to global instability
Irish consumer sentiment improved in June as worries around tariffs cooled and interest rates fell, but concerns over trade wars, escalating military conflicts and cost of living pressure kept the gains marginal. The latest Credit Union barometer saw its first back-to-back improvement since July last year as the consumer sentiment index rose from 60.8 to 62.5 from May to June. The report said the large gap since the most recent back-to-back gain emphasises 'how uncertain and threatening the circumstances facing Irish consumers have been of late, notwithstanding the continued solid performance of the economy through this time.' The level of consumer confidence, despite the slight increase in the past month, remains well below the reading in June 2024 of 70.5, and well below the long-term survey average of 84. READ MORE The survey, which was conducted in partnership with Core Research, was compiled before the 'heightened geopolitical uncertainty related to the escalation in military conflict in the Middle East', the report said. Within this context, the rise in Irish consumer sentiment in June was mirrored in gains in similar measures for the US and UK. In Ireland, the consumers' assessment of the current economic conditions brightened, and 12-month expectations were resurgent. Falling from a height of 90.1, consumers' evaluations of their personal financial situations in 12 months' time has recovered somewhat from a trough in the low 70s in April and May, in reaction to the announcement of US import tariffs. People's general economic outlook has brightened also, but consumers have not yet regained their pre-tariff confidence. The report indicated that Irish consumers have become used to the economic instability in the system. 'As uncertainty and a threatening geopolitical landscape are now almost permanent features of the Irish economic landscape, consumers have already adapted their behaviour to these developments in recent years,' the report said. 'So, the threat of a trade war or even the increased threat of military conflict are not altogether radical changes in the landscape.' Irish consumers are generally in a slightly stronger position in holiday spending power than a year ago, but an increased number of consumers are planning to spend more on holidays this year – 26 per cent – than it stood last year (23 per cent). At the same time, the level of consumers unable to afford a holiday was little changed at 22 per cent this year. The rate of people planning to spend less on holidays increased from 15 per cent to 17 per cent. The barometer said the results 'highlight wide variations in financial circumstances across Irish consumers' and indicated a three-tiered financial situation among consumers. The chief executive of the Irish League of Credit Unions David Malone, said: 'The improvement in consumer sentiment in June, while marginal, is encouraging in that it hints that Irish consumers are adapting to a very challenging environment.'
Irish Independent
26-06-2025
- Business
- Irish Independent
Nearly one in four can't afford a holiday this year, survey finds
Close to one in four said they will not be able to afford a holiday this year, according to the June Credit Union Consumer Sentiment Index. Those most likely to say they cannot afford a holiday included women, those aged 45 to 54, and those struggling to make ends meet. This is despite the fact that the cost of travelling abroad is lower than last year. However, domestic restaurant and hotel prices are higher. The survey, carried out in partnership with Core Research, indicates that the vast majority of consumers do not intend to spend more on their holidays this year. One in four plan to spend more on their holiday than they did a year ago Economist Austin Hughes, who oversees the compiling of the consumer sentiment index, said this suggests discretionary spending power remains limited for most Irish households. The survey showed roughly one in four consumers plan to spend more on their holiday than they did a year ago. Broadly similar numbers plan to spend the same amount. But 22pc said they are unable to afford to go on holidays this year. 'So, these results are consistent with a range of other responses to special questions in previous sentiment surveys in that they highlight wide variations in financial circumstances that might be summarised as suggesting a three-tier breakdown in the financial health of Irish households that ranges from fit to feeble,' Mr Hughes said. ADVERTISEMENT He added that the results are marginally more positive than a year ago, as the share of consumers spending the same or more is fractionally up. The share of those unable to afford a holiday is marginally down. However, there is also a small increase in the share of consumers who say they will spend less on holiday this year, Mr Hughes said. The demographic breakdown suggests consumers in Dublin, those on higher incomes and those aged 25 to 34, are more likely to plan to spend more on holidays this year than others. Men are more also likely to plan to spend more than women. Overall, consumer sentiment improved marginally in June. This was due to tariff threats easing slightly, oil prices and interest rates falling, and the economy continuing to post strong growth in activity and employment. The survey for June has an index reading of 62.5, up slightly on the 60.8 figure for May.
Irish Times
23-05-2025
- Business
- Irish Times
Cooling-off of tariff rhetoric boosts Irish consumer confidence
The cooling-off of tariff rhetoric in May slightly improved shoppers' confidence, though it remains well below the long-term level, a new survey has indicated. Amid the cost-of-living crisis, 15 per cent of Irish consumers say they would not be able to cope with an emergency cost of €1,000, according to the Irish League of Credit Unions (ILCU). 'With some rollback of the scale and timing of increased tariffs in recent weeks and a sequence of largely reassuring domestic economic releases, a very slight pickup in Irish consumer sentiment in May is not altogether surprising,' it said. Despite the bump in confidence, Irish consumers still 'remain gloomy', the survey found. Although at an index reading of 60.8 in May – an improvement on 58.7 in April – the level is significantly lower than the long-term average of 84.0. READ MORE The growth in the overall consumer sentiment figure was driven by a 'limited easing' in the subindexes measuring consumers' outlook for the economy and employment. This positive step outweighed a weakening in the index for consumers' perceptions of their personal finances. The survey, which was conducted in partnership with Core Research, found that Irish consumers still expect a contraction in the general and job economies, but sentiment had recovered slightly from its recent low last month. Irish consumers downgraded their perception of their own finances, falling from 72.3 for the past year and to 71.8 for the year ahead. 'Our sense is that renewed consumer concerns around their household finances owe much to a continuing step-up in grocery price inflation that has translated into ongoing and somewhat unexpected financial strains for significant numbers of consumers,' the Irish survey noted. The number of those who would be able to use savings to deal with an unexpected financial emergency costing €1,000 has decreased from 39 per cent to 37 per cent, down from the 2023 peak of 44 per cent. [ 'No long-term commitments to anything' – Ireland's economy is experiencing a silent slowdown Opens in new window ] In broader financial terms, the survey said: 'It remains the case that a significant 15 per cent of Irish consumers say they would be unable to cope with a financial emergency costing €1,000 in 2025.' The survey concluded that just over half of consumers in Ireland are 'comfortable' financially at present, with a further one in four 'clinging on', and would respond to such an emergency by borrowing or selling something. Between those two consumers sections is a share described as 'coping' financially, and could respond to an unexpected financial burden by borrowing from family or friends, or from a bank or credit union, or by using a credit card. David Malone, chief executive of the Irish League of Credit Unions, said: 'The special question in the May credit union consumer sentiment survey highlights the wide range of conditions facing Irish consumers at present. While many are reasonably comfortable at present and planning a better future, others would face substantial problems in the event of an unexpected expense or bill.'
Irish Examiner
22-05-2025
- Business
- Irish Examiner
Consumer sentiment rises after tariff pause but remains low compared to long-term trends
Irish consumer confidence picked up marginally this month as the threat of tariffs receded but the overall outlook remains 'gloomy' with confidence levels 'well below' long-term trends, the latest Consumer Sentiment Index shows. This month's consumer sentiment index reading stood at 60.8 - up from 58.7 during April but significantly lower than the 74.9 figure seen as recently as January. The May survey reading is also some distance below the long-term survey average of 84.0. The Credit Union Irish Consumer Sentiment Survey is based on a sample of 1,000 adults and is conducted by Core Research on behalf of the Irish League of Credit Unions. The analysis of the survey was written by economist Austin Hughes. Mr Hughes said the increase between April and May 'is not altogether surprising' but the 'latest survey reading still suggests Irish consumers remain gloomy, with confidence remaining well below the level of a year ago and its long-term trend'. He said the improvement in Irish consumer sentiment during May was driven by a 'limited easing in concerns about the outlook of the economy and jobs' which more than offset a 'slight weakening' in consumers' assessments of their own personal finances. The survey shows the weakest elements of consumer confidence related to household finances likely reflecting a pick-up in grocery bills of late. While the outlook for household finances over the next 12 months was effectively unchanged, Mr Hughes said this should be seen in the context of that being the weakest element of the April survey reading. 'Our sense is that renewed consumer concerns around their household finances owe much to a continuing step-up in grocery price inflation that has translated into ongoing and somewhat unexpected financial strains for significant numbers of consumers,' he said. 'The tone of the May sentiment survey suggests consumers are slightly less nervous about an apocalyptic collapse of the Irish economy than they were a month ago but there is still a strong sense that economic and financial conditions will be very challenging.' The strongest improvement in consumer sentiment between April and May was seen in the outlook for jobs. 'This likely reflects a partial correction of the thinking that prompted a sharp weakening in sentiment in April,' Mr Hughes said. 'Comfortable' v 'clinging on' In the survey, consumers were also asked how their household would deal with an unexpected financial emergency costing €1,000. It showed 15% saying they couldn't deal with an unexpected financial outlay while 37% said they would rely on savings. Another 18% said they would use their current incomes to handle such a problem. 'Drawing together those who can meet an unexpected financial emergency through savings or from their current incomes, the 2025 survey might suggest that a little over half of Irish consumers might be described as 'comfortable' at present,' Mr Hughes said. 'At the other end of the financial spectrum, roughly one in four Irish consumers might be considered to be 'clinging on'. This grouping includes those who say they could not handle a financial emergency at present as well as those who would resort to borrowing from a lender other than a bank or credit union and those who would sell something,' he said.
