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Closer to the Edge November 2011
 

Closer to the Edge November 2011

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New research for the Irish Daily Mail and RTE Frontline shows Irish consumers are under increasing pressure ahead of the 2012 Budget. ...

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.

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    Closer to the Edge November 2011 Closer to the Edge November 2011 Presentation Transcript

    • An Amárach Briefing for RTE Frontline/Irish Daily MailNovember 2011RTE Frontline/Irish Daily Mail 1
    • RTE Frontline and the Irish DailyMail have commissionedAmárach Research to examinethe mood of the nation ahead ofBudget 2012.With economic uncertainlyincreasing rather thandecreasing, we have examinedthe current financialcircumstances of the nation’shouseholds and families, andtheir preferences for tax andspending changes in theforthcoming budget.This report summarises the mainfindings, and are based anationallly representative, onlinesurvey of 1,000 Irish people inNovember 2011.
    • RTE Frontline/ Irish Daily Mail1. Under Pressure consumer behaviour2. Debt Problems mortgages & loans3. Balancing Act Budget 2012
    • 1. Under Pressure
    • Feeling the Pinch The vast majority of Irish adults Incomes Under Pressure have seen their disposable 45% incomes fall in the past year. 40% 39% Women and those aged 45-54 35% are more likely to have seen a 29% fall in incomes. 30% 25% % % Decreased Increased 20% 18% All Adults 68 14 15% 11% Males 65 14 10% 4% Females 70 14 5% 0% 18-24s 37 31 decreased decreased no change increased increased significantly slightly either way slightly significantly 25-34s 62 18 Q. Would you say your level of disposable income has 35-44s 78 11 increased or decreased over the last year? 45-54s 86 6 Source: Amárach Research, November 2011 55+ 74 7RTE Frontline/Irish Daily Mail 5
    • Deep Impact Tax increases have been the Past Experiences predominant source of pressure on incomes. a reduction in income due to Women and 25-34s are more tax increases 54% likely to miss a loan repayment. missing a loan repayment 19% % % buying groceries on credit due None Miss to insufficient funds 15% Payment All Adults 31 19 missing a mortgage repayment 9% Males 28 16 none of these 31% Females 34 22 18-24s 44 17 0% 20% 40% 60% 25-34s 26 26Q. Have any of the following happened/occurred in your household in the 35-44s 23 18past 12 months? 45-54s 22 20Source: Amárach Research, November 2011 55+ 38 15RTE Frontline/Irish Daily Mail 6
    • Making An Effort Cutting Expenditure Just over half of all adults have made a strong effort to cut 60% 56% spending. 50% Once again, women and those aged 45-54 are more likely than 40% 38% others to have changed. 30% % % Strong Slight 20% All Adults 56 38 10% 6% Males 52 42 0% Females 60 34 A strong A slight No effort at 18-24s 38 51 effort effort all 25-34s 58 36 Q. What effort, if any, have you made in the past 12 months to reduce you household expenditure? 35-44s 60 36 45-54s 75 22 Source: Amárach Research, November 2011 55+ 51 43RTE Frontline/Irish Daily Mail 7
    • Cut Leaders Areas of Reduced Expenditure 100% 90% 86% 83% 80% 80% 74% 70% 60% 58% 50% 40% 30% 26% 20% 10% 0% leisure groceries & phone & car & travel insurance childcare & expenses clothing energy schooling Q. In which of the following areas, if any, have you reduced household expenditure in the past 12 months? Source: Amárach Research, November 2011RTE Frontline/Irish Daily Mail 8
    • Bridging the Gap 3 in 10 adults have borrowed from Making Ends Meet friends or family in past year. 50% 47% Women and young people are 45% more likely to borrow from friends 40% and family; 45-54s more likely to 35% 32% 30% use their credit card to pay bills. 24% 25% 20% % % 15% 9% family credit 10% 5% 5% All Adults 32 24 0% Males 31 23 borrowed depended borrowed not none of money more on money declared these Females 34 25 from credit card from a income to friends or to pay bills money avoid tax 18-24s 42 19 family lender 25-34s 46 27 Q. Over the past year, have you done any of the following? 35-44s 39 22 45-54s 30 37 Source: Amárach Research, November 2011 55+ 12 19RTE Frontline/Irish Daily Mail 9
    • Savings Habits Rainy Days 60% 52% 50% 48% 40% 37% 34% 29% 27% 30% 25% 20% 18% 15% 10% 0% dont save save dipped groceries phone & car & insurance leisure childcare none of regularly regularly into & clothing energy travel expenses & these savings to bills expenses schooling pay for: Q. Do you save regularly? Q. All who save regularly: Have you had to dip into savings over the last year to help pay for any of the following? Source: Amárach Research, November 2011RTE Frontline/Irish Daily Mail 10
    • Future Concerns Concerns for Next 12 Months 70% 66% 65% 60% 50% 45% 42% 39% 38% 40% 33% 30% 20% 10% 0% Income cut for Income Reduced hours Redundancy for Missing a loan Buying Missing a self or partner reduction due to for self or self or partner repayment groceries on mortgage tax increases partner credit due to repayment lack of funds Q. How concerned that the following might happen in the next 12 months? Source: Amárach Research, November 2011RTE Frontline/Irish Daily Mail 11
    • Difficulty Coping100% The majority of adults would find it90% difficult to cope with a €50 reduction in after tax income.80%70% 57% Women and 45-54s are the most60% 75% vulnerable to even the lowest of 83% the reduction scenarios.50%40% 19% €50 % %30% decrease Easily Difficulty20% 13% All Adults 24 5710% 24% 9% 12% 8% Males 28 51 0% €50 monthly €100 monthly €150 monthly Females 20 64 decrease decrease decrease 18-24s 30 50 Cope Easily Neither/Nor With Difficulty 25-34s 26 55 Q. We would now like you to tell us the likely impact that the following scenarios would have on your after tax income: 35-44s 13 66 €50/100/150 monthly decrease in income Source: Amárach Research, November 2011 45-54s 16 65 55+ 31 53RTE Frontline/Irish Daily Mail 12
    • 2. Debt Problems
    • 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). % % 50% 50% Pay Don’t Pay Mortgage Mortgage All Adults 50 50 Males 58 42 Females 45 55 18-24s 14 86 pay mortgage dont pay mortgage 25-34s 50 50 Q. Are you responsible - solely or jointly - for paying a 35-44s 61 29 mortgage on your home? 45-54s 68 32 Source: Amárach Research, November 2011 55+ 47 53RTE Frontline/Irish Daily Mail 14
    • Negative Equity Positive & Negative Equity The majority of those with mortgages report ‘positive equity’ in their home. 9% Men and those aged 25-34 are more likely than other mortgage payers to experience negative 22% value of home greater equity. than mortgage 50% value of home same % as mortgage Negative Equity value of home less All Mortgagees: 22 19% than mortgage dont know Males 26 Females 17 Q. Base – all who pay mortgage: Now thinking about the value of 18-24s 11 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 25-34s 33 your mortgage, or less than you currently owe on your mortgage? 35-44s 30 Source: Amárach Research, November 2011 45-54s 14 55+ 15 15RTE Frontline/Irish Daily Mail
    • Mortgage Type 100% 90% 80% 70% 60% 50% 40% 86% 30% 20% 46% 30% 24% 10% 0% 8% Variable Fixed Other Contacted to Not contacted switch Base: All responsible for paying mortgage on the home Q. What type of mortgage do you have? Q. Has your mortgage provider contacted you within the last year and suggested you switch type? Source: Amárach Research, November 2011RTE Frontline/Irish Daily Mail 16
    • Missed Payments 90% 80% Average 70% number of monthly 60% repayments 50% missed = 3.3 40% 81% 73% 30% 20% 10% 19% 26% 0% Have not missed Have missed one Have not missed Have missed at any mortgage or more mortgage any other loan least one loan repayments repayments repayments repayment Base: All responsible for paying mortgage on the home Q. Have you missed any mortgage repayments in the past 12 months? Q. In the past 12 months have you missed a repayment on any other debt (e.g.: car loan, utility bill, phone bill etc)? Source: Amárach Research, November 2011RTE Frontline/Irish Daily Mail 17
    • Missed Payments Mortgage Provider Contact 90% 80% 70% 60% 50% 40% 77% 79% 72% 30% 20% 10% 19% 0% 8% Not contacted Contacted by If contacted, Post Phone Email by mortgage mortgage how? provider provider Base: All mortgage payees who have missed a repayment in past 12 months Q. If you have missed a mortgage repayment, have you been contacted by your mortgage provider? Q. If so, how were you contacted? Source: Amárach Research, November 2011RTE Frontline/Irish Daily Mail 18
    • Health Insurance Plans for Renewal 4% 90% Will maintain 13% present level 80% of cover Will reduce 70% level of cover 60% Will increase 83% level of cover 50% 40% 77% 30% 53% 47% 20% 10% 18% 0% 5% Dont have Have health Renewal Will renew Wont renew Dont know health insurance plans: insurance Base: All Adults 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? Q. When renewing your Health Insurance policy; which of the following do you intend on doing?RTE Frontline/Irish Daily Mail Source: Amárach Research, November 2011 19
    • 3. Balancing Act
    • Budget Balance There is a clear consensus in favour of spending cuts over tax increases. There are no gender differences, 33% though 35-44s favour cuts more. % % Tax Spending Increases Cuts 67% All Adults 33 67 Males 32 68 Females 33 67 18-24s 38 62 tax increases spending cuts 25-34s 33 67 Q. What do you think should be the share of tax increases 35-44s 31 69 and spending cuts in meeting its requirements? 45-54s 32 68 Source: Amárach Research, November 2011 55+ 31 69RTE Frontline/Irish Daily Mail 21
    • Closing the Budget Gap 100% 90% 24% 80% 70% 59% 61% 61% 61% 62% 65% 67% 67% 60% 77% 80% 84% 50% 40% 76% 30% 20% 41% 39% 39% 39% 38% 35% 33% 33% 10% 23% 20% 16% 0% Increase top Cut social Cut single Introduce a Reintroduce Introduce Cut Introduce Increase Cut in state Increase Increase income tax welfare rates parents septic tank university water rates childrens property tax rate of VAT pension bottom charges for rate to allowance charge fees for benefit for level income tax doctor unemployed households households rate visits/A&E go ahead dont go ahead Q. For each tax or cut please say whether think the government should go ahead or not with each measureRTE Frontline/Irish Daily Mail Source: Amárach Research, November 2011 22
    • Child Benefit Child Benefit Recipients 80% 70% 60% 50% 40% 30% 67% 20% 35% 40% 33% 10% 25% 0% dont receive receive if receive, no. 1 2 3 or more benefit of children: Q. Do you receive child benefit? Q. For how many children do you receive child benefit? Source: Amárach Research, November 2011RTE Frontline/Irish Daily Mail 23
    • Main Use of Child Benefit 60% 53% 50% % 50% Save Benefit 42% 40% All Recipients 20 Males 25 30% Females 16 20% 20% 18-24s 28 10% 25-34s 22 35-44s 17 0% spend on spend on use to pay put in 45-54s 18 groceries the children bills savings 55+ 30 etc account Q. What do you do with your child benefit payments? Base: all who receive child benefit Source: Amárach Research, November 2011RTE Frontline/Irish Daily Mail 24
    • The Budget & Child Benefit 4% Introduce means testing decrease average amount 13% tax just like other income other % 20% Means Test 63% All Recipients 63 Males 61 Females 64 18-24s 61 25-34s 70 Q. If cuts were to be made to child benefit payments in the 35-44s 69 upcoming budget how would you prefer it was done? Base: all who receive child benefit 45-54s 50 Source: Amárach Research, November 2011 55+ 43RTE Frontline/Irish Daily Mail 25
    • RTE Frontline/ Irish Daily MailThings are tough for Irishfamilies, and they are about toget tougher.The RTE Frontline/Irish DailyMail survey shows that agrowing minority of Irish adultsare ‘running out of road’ in termsof their financial wellbeing.The impact of Budget 2012 oncitizens, taxpayers andconsumers will play a significantpart in our economic prospectsnext year.
    • RTE Frontline/ Irish Daily MailAbout Amárach ResearchWe are an independent market researchagency, providing a full range of researchservices to our Irish and internationalclients. We have worked with two thirds ofIreland’s top 200 companies. Every yearwe survey over 100,000 people at homeand abroad, as well as running hundredsof focus groups.Our experienced team of directors andexecutives manage online, face-to-faceand cati surveys; as well as qualitativeresearch including focus groups, in-depthsand ethnographic studies. We also offer aunique field-only service to universities andinternational agencies.Amárach Research is proud to be:
    • RTE Frontline/ Irish Daily MailCall us on 01 410 5200 if you want your business to bounce forward to success: Mark Nolan Managing Director or Michael McLoughlin Chief Executive or Gerard O’Neill Chairmanfor a confidential discussion about your needs and toexplore how we can help you succeed through world class market research. e. gerard.oneill@amarach.com w. www.amarach.com b. www.amarach.com/blog t. twitter.com/AmarachResearch