Report reveals fears over Northern Ireland household bills
Large numbers of people in Northern Ireland are rationing their fuel and borrowing cash from moneylenders to meet household bills, a new survey has found.
The first research of its kind by the Irish League of Credit Unions also revealed that consumers fear the next year will see further economic decline.
The group has 103 Credit Unions in Northern Ireland, and a total of 494 on the island of Ireland as a whole.
Its first Household Income Tracker for Northern Ireland produced evidence of families falling into debt as they struggle to pay their bills.
The organisation's report found:
- 65% of consumers fear 2012 will be more difficult than 2011.
- 87% ration fuel in cold weather.
- 44% have less disposable income than 12 months ago.
- 150,000 people turn to payday loans and moneylenders.
The Credit Union's Rosemary O'Doherty said: "The launch of the tracker is an important initiative by our movement as we identify the issues facing people, including our 409,000 members, in communities across Northern Ireland.
"It is clear that people are expecting a year of new challenges and financial pressures.
"The fact that people have to turn to high interest loans from moneylenders and payday companies in such large numbers is of particular concern.
"In the case of moneylenders loans are being offered which are up to 15 times more expensive than those available from local credit unions.
"Payday loan companies are currently quoting loans of £400 over 31 days at a cost of £129 - the same loan from a Credit Union costs about £4.
"I would again encourage anyone facing financial difficulties to speak to their credit union first.
"Unlike other lenders we are a not-for-profit community owned organisation and exist solely to meet the needs of our members."
The report's findings, based on a representative survey of 500 people, were broken down into key areas.
- On disposable income it found:
Almost two-thirds (65%) of people in Northern Ireland fear 2012 will be even more difficult financially than 2011. A quarter of consumers are worried about their ability to manage their finances over the next 12 months. The tracker estimated around 170,000 people (12% of all adults) have no money left after paying their bills, while 670,000 (44%) have less disposable income than this time last year.
Of the 35% of adults (493,000) who have less than 5% of their income left over after they pay their bills, over 400,000 worry about their ability to meet unforeseen expenses, while 296,000 fear about coping if income tax or welfare rates were to change.
- On the impact of energy costs, it found:
A total of 83% said the increased cost of energy and fuel has impacted on their spending ability. Almost nine in ten adults (87%) said they switch off heating during cold periods to save fuel. Half of residents (51%) say they were forced to sacrifice other household spending to pay for fuel this winter. The survey said a typical Northern Ireland consumer pays out £131 on fuel each month.
- On moneylenders, the survey revealed:
The increase in fuel costs saw over 100,000 people (8% of residents) take out loans to cover their bills. Almost a quarter of these loans (23%) were taken from moneylenders. A typical loan from a moneylender amounts to £300 with an average interest of 95% leading to a repayment of £286. A total of 14% of those who took out a loan were unable to meet their repayments.
- The tracker data on pay day loans showed:
Up to 40,000 people have taken a pay day loan to cover essentials such as food and bills - 26% of respondents who went to pay day companies did so to pay for food. A quarter of these who took the loans were unable to meet their repayments on time.