Closer to the Edge November 2011

An Amárach Briefing for RTE Frontline/Irish Daily Mail
November 2011
RTE Frontline/Irish Daily Mail 1

RTE Frontline and the Irish Daily
Mail have commissioned
Amárach Research to examine
the mood of the nation ahead of
Budget 2012.
With economic uncertainly
increasing rather than
decreasing, we have examined
the current financial
circumstances of the nation’s
households and families, and
their preferences for tax and
spending changes in the
forthcoming budget.
This report summarises the main
findings, and are based a
nationallly representative, online
survey of 1,000 Irish people in
November 2011.

RTE Frontline/
Irish Daily Mail

1. Under Pressure
consumer behaviour

2. Debt Problems
mortgages & loans

3. Balancing Act
Budget 2012

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 7

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 26

Q. Have any of the following happened/occurred in your household in the 35-44s 23 18
past 12 months?
45-54s 22 20
55+ 38 15

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
55+ 51 43

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?



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
55+ 12 19

Savings Habits

Rainy Days
60%
52%
50% 48%

40% 37%
34%
29% 27%
30% 25%
20% 18%
15%
10%

0%
don't 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?



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?



Difficulty Coping

100% The majority of adults would find it
90%
difficult to cope with a €50
reduction in after tax income.
80%
70% 57% Women and 45-54s are the most
60% 75% vulnerable to even the lowest of
83% the reduction scenarios.
50%
40%
19% €50 % %
30% decrease Easily Difficulty
20% 13% All Adults 24 57
10% 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 53

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 don't 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
55+ 47 53

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
don't 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 15
RTE 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?



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)?



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?



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%
Don't have Have health Renewal Will renew Won't renew Don't 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

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
55+ 31 69

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 don't go ahead
Q. For each tax or cut please say whether think the government should go ahead or not with each measure

RTE 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%
don't 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?



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



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+ 43

RTE Frontline/
Irish Daily Mail

Things are tough for Irish
families, and they are about to
get tougher.
The RTE Frontline/Irish Daily
Mail survey shows that a
growing minority of Irish adults
are ‘running out of road’ in terms
of their financial wellbeing.
The impact of Budget 2012 on
citizens, taxpayers and
consumers will play a significant
part in our economic prospects
next year.

RTE Frontline/
Irish Daily Mail

About Amárach Research

We are an independent market research
agency, providing a full range of research
services to our Irish and international
clients. We have worked with two thirds of
Ireland’s top 200 companies. Every year
we survey over 100,000 people at home
and abroad, as well as running hundreds
of focus groups.

Our experienced team of directors and
executives manage online, face-to-face
and cati surveys; as well as qualitative
research including focus groups, in-depths
and ethnographic studies. We also offer a
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Amárach Research is proud to be:

RTE Frontline/
Irish Daily Mail

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Closer to the Edge November 2011

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Closer to the Edge November 2011