The number of consumers citing the cost of living as a “key concern” has increased by a third in the past quarter, while significant numbers have concerns around paying for food and electricity according to research by Permanent TSB.
The bank said 81 per cent of consumers have cited increases in the cost of living as a key concern, up from 62 per cent just three months ago and 53 per cent in October, making it the “dominant issue” for people.
The same research found 62 per cent of people feel they will have to cut back on food spending over the coming year in response to sharp price rises, while 53 per cent of people fear they will be unable to pay higher energy bills.
The findings are part of the latest report in the Permanent TSB research series called Reflecting Ireland. The series polls public attitudes each quarter and includes recurring questions about how people see their personal financial situation. The research was conducted by Kantar in April among a representative sample of 1,002 adults.
The report found that 85 per cent of consumers worry the cost of living is going to get much worse over the next 12 months, while 59 per cent now feel inflation is not a temporary or time-limited issue and say that there won’t be a return to normal in the near future.
Just 12 per cent of people feel that they will get a pay increase that will absorb the increase in the cost of living.
By contrast, Covid-19 continues to recede from many consumers’ list of concerns, in line with the removal of the majority of pandemic-related restrictions.
The pandemic was a key concern for just 15 per cent of people in the second quarter, down from 23 per cent in the first quarter and 33 per cent in October.
However, consumer pessimism is at its highest level for nine years. More than half of people feel they are less well off than they were a year ago, up from a third in January.
More than four in 10 feel they will be less well off in a year’s time, up from 22 per cent when asked three months ago. The last time pessimism about the future was that high was in 2013 when it reached 45 per cent.
Just 24 per cent of people feel they will be better off in a year’s time. However, younger people are more optimistic, with 47 per cent of 18-24 year olds saying they expect to be better off.
There is also significant concern about making ends meet. More than 60 per cent describe themselves as “just getting by” financially.
Some 58 per cent feel confident managing day-to-day expenses, while 22 per cent do not. About 43 per cent of people don’t have money left over at the end of the month, and 47 per cent don’t feel they could handle a major unexpected expense.
The research also examined consumer attitudes to switching. With Ulster Bank and KBC exiting the market shortly, the research found the number of people considering switching their current account has doubled over the past year to 23 per cent.
For people with a mortgage, one in four are considering switching over the next year. The survey also showed far greater appetite among consumers for switching other services to save money.
Fifty-five per cent of people plan to switch power or gas provider, up from 49 per cent last year, while 47 per cent plan to switch car insurer, up from 38 per cent. Finally, 46 per cent plan to switch television or broadband provider, up from 38 per cent.
