Families facing financial ruin as 'economic tsunami' gathers pace
Friday, 5 September 2008
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Thousands of Northern Ireland households are teetering on the brink of financial ruin as the rising cost of living tightens its unrelenting grip on already-strained budgets.
According to new research, published by the Consumer Council today, almost 90% of respondents are becoming increasingly alarmed about how to make ends meet.
The survey, which was conducted via a number of public meetings across the province also showed consumers are depriving themselves of such essentials as home heating (73%), fuel (52%) and food (46%).
The revelations come one day after householders were told to brace themselves for a hike of over 30% in electricity bills, as well as a double digit increase in the cost of Phoenix Natural gas, from next month.
Speaking to the Belfast Telegraph today, Eleanor Gill, chief executive of the Consumer Council in Northern Ireland, warned the public to expect the “economic tsunami” to gather pace.
“Consumers are facing hard choices,” she said. “The financial crisis is impacting on everyone as people face the biggest drop in disposable income in a decade.
“With an average family having to find an extra £3,120 a year for the ‘must haves’, such as food, heating, fuel and mortgages, it is clear there is a real worry across the board about the force of the economic tsunami we are experiencing.”
Chief among the findings of the study was that consumers are making drastic cutbacks and lifestyle changes, where possible, to alleviate some of their financial hardship.
Savings have already suffered in 45% of homes according to the research, while 21% of those surveyed said they had had to forgo home insurance.
Holidays, leisure activities and going out have also been knocked on the head by many.
And there are serious concerns among householders about managing to keep a roof overhead, with 35% admitting they are worried about defaulting on mortgage repayments or rent.
“Households are placing themselves in greater financial risk in order to cope with the demands of rising costs,” Ms Gill said.
“Consumers are worried about paying mortgages and rent, which sounds alarm bells when we know there has been a 59% increase in mortgage repossession action here compared to this time last year.”
The research has also thrown up important questions about how residents in Northern Ireland will be able to protect themselves against unforeseen eventualities, including the weather.
“It is worrying that nearly half of people have cut back or made changes to their insurance and savings over the last year — or have no insurance for loss of income or property — particularly given the unprecedented floods in August alone,” said Ms Gill.
“The Consumer Council has a real concern for those who are already struggling to make ends meet and those who are on the financial edge.
As winter approaches, the stark findings paint an extremely bleak picture, particularly in the light of recent hikes in everyday essentials
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M Spence and Liam are correct and this is coming from a pensioner who is also feeling the pinch.
Many people, nowadays, rarely save but spend,spend,spend and must have the latest whether they can afford it or not. Some also got greedy with regards to the housing market but the greedy lenders must also be to blame by dishing out 100%, and greater, mortgages.
We cannot blame everything on Government as they are impotent to deal with increasing world commodity prices caused by rising demand and diminishing resources. They could, however, be more forward thinking by encouraging farmers to bring more land under intensive production and to expand on renewable energy resources, including geothermal.
Handouts from Government don't work as this only increases taxes and encourages dependency rather than responsibility.
One thing is certain - commodity costs will continue to rise in the long time.
Posted by robbo | 05.09.08, 17:32 GMT
In my personal opinion this financial crisis was sparked by greedy UK banks and mortgage lenders jumping on the American mortgage market gravy train. Now that things have went pear shaped for them who is paying the price need I say more.
In my humble opinion what they did was negligence they played with people's money without any notion of the consequences that it would have on their UK customers. Yes I accept that it is all part of this so called game that these corporate leviathans play and it is no different than playing the tables at a Las Vegas casino on the gambling side of it but were the difference is that when you lose at the tables in Vegas you down have a customer base to bleed dry to pay for your mistakes.
As for the energy producers they are only doing what any business would do monopolize on someone else's bad fortune supply and demand.
As for the Banks and Mortgage lenders they should be fined made to pay compensation like anybody else for their negligence.
Posted by Paul | 05.09.08, 16:52 GMT
M Spence - I agree with you. For too long people were too greedy, borrowing too much, paying with plastic and not saving anything. It's only natural the consequences of such horrible book keeping will come back to haunt you.
The UK banks are basically insolvent. October will bring about a whole new wave of problems.
The Bank of England are stuck between a rock and a hard place; Raise interest rates and they'll speed up recession and the House Price Crash/reposessions as well as umemployment levels increasing although they will slow inflation, but if they cut interest rates then we'll be paying a tenner for a loaf of bread as inflation soars leaving us all worse off, especially the poor who are already struggling to pay for heat and electricity!
More depression is to come and I think we will see crime rates soar. It will become a nasty place for the forseeable future in my opinion.
Posted by Liam | 05.09.08, 16:17 GMT
The govt couldn´t care less about people, as long as they can stay in power and have all the perks at our, the taxpayer´s expense.
They have shown they are not interested in the plight of British citizens,many of them senior citizens,now denied the same additional benefits as the rest of the country, because after years of substandard living, they have had to go abroad for health reasons. I will throw up the next time a labour politician talks about doing everything for the "hardworking taxpayers and families. Their fixed pension now attracts, what a laugh, over 30% less to the euro than a few years ago. Alastair- not my - Darling, recent statements have reduced their income even further as he tries to position himself as a future Nu Labour leader. British ciotizens are now just taxpayers to keep the govt and MPs in jobs
remember when labour last in power, 27% inflation, going begging money from the IMF to keep the country running.
Posted by scraping by | 05.09.08, 16:10 GMT
This economic problems are seriously exasperated by European Governments' obsession with Carbon and Carbon taxes.
The current eco-movement have a lot to answer for; BioFuels have pushed up global food prices, and this fixation on CO2 is directly responsible for higher electricity and fuel costs.
We all agree that pollution is bad, but until viable alternatives are found, don't penalise the poor. If you want to chase someone, go after the big bad oil companies who are posting obscene profit increases.
Posted by Seán | 05.09.08, 14:42 GMT
Concerned Reader;
Rubbish! It is time people accept Northern Ireland is an economic backwater and begin living within their means! This is simply reality ripping the false economy out form under everyones feet. I saw it coming and prepared freeing myself from the debt economy (not easy but I was prepared to make sacrifice's), as a result I have ever more disposable income. You made your bed, you can sleep in it. I am not prepared to bail such people out, where exactly is the money coming from. Another point I would like to make is that commodities will stabalise and potentially fall in the short term due to economic stagnation / recession but we have reached peak oil and I guarantee the kind of price rises you have seen to date are chicken feed.
Posted by M Spence | 05.09.08, 14:21 GMT
It is time that the government starts to address the issue of raising costs.
Posted by concerned reader | 05.09.08, 12:52 GMT