BY JOHN ELLIS, FINANCIAL ADVISOR
DEPOSITS continue to remain at record highs, with €134 billion saved to the end of August 2021. While many households continue to face the real possibility that Covid-19 and the resulting economic turmoil could still leave them under pressure paying their mortgages and everyday expenses, the amount that people have saved has boomed.
But Central Bank data shows that from mid-April 2021 ‘card spending’ began to rise sharply as consumer sentiment improved and restrictions were eased. The most recent Central Bank quarterly report anticipates the economic recovery to continue into 2022 and beyond with domestic modified demand forecast to grow by 7.1% this year and 4.1 per cent in 2023 driven primarily by consumer consumption due to continuing pent up demand.
The Government and many economists are hoping that this trend will continue, with people spending some of their record levels of savings. But the Government may well have to incentivise people to part with their cash because, according to a recent Taxback.com “Taxpayer Sentiment Survey” of 1200 people, saving even more appears to be the primary goal for 2022.
Experts at Taxback.com say that the fact that so many people either want to save more (25%) or watch what they spend to a greater extent (31%) could come as a big worry to the Government and economists, as most suggest that we’re already saving too much.
The results of the survey were really mixed – while 7 in 10 people said that they had made changes to their financial behaviours since the pandemic began – there was a split between those who are now better at money management and those who are worse.
What is really surprising is that only 11% of those surveyed revealed that they plan to be more proactive in terms of looking for better deals on insurance and in getting their tax back etc.
Barry Cahill, Business Development Director at Taxback.com, said:”It’s a bit disheartening to learn that just one in 10 appears to want to be proactive when it comes to negotiating or sourcing better deals or claiming back money and it seems that unnecessary overspending and not claiming what you are owed have always been something the Irish consumer has grappled with.”
Another interesting fact revealed in the survey is that just one in 10 (11%) says they are focused on earning more money because of the pandemic. This seems to indicate that people are more focused on maintaining a better work life balance than they were before.
According to the online Trading Economics Report Ireland’s consumer price inflation rate rose to 5.3% year on year in November of 2021 due to the costs of transportation, prices for vehicles, airfares, the cost of Health, housing, utilities, higher rents and increases in electricity and gas to name a few.
Therefore, with the cost of goods and services increasing at an alarming rate as inflation bites both take home pay and outgoings need to be monitored regularly.
If your income has not changed in a few years, then it’s likely that your standard of living is going backwards. You need to negotiate a pay rise or if time is the issue discuss a more flexible working regime.
Equally you need to become more aware of the significant price differences on various products, for example, change your utility provider, change credit card provider. Research the market for car and house insurance. Don’t take the first quote offered.