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08/03/2011
Study Reveals Over-Indebtedness Increase
The Economic and Social Research Institute has said that the level of over-indebtedness is likely to have increased significantly in the last two years.
These claims came after the institute published a study on financial exclusion and over-indebtedness in Irish households.
The study draws attention to measures in the bank recapitalisation scheme that it says have not yet been implemented.
It revealed that 20% of Irish households do not have a bank account and the level of banking exclusion here is three times higher than the EU average.
Such exclusion affects access to credit, ability to save and access to housing insurance and it makes basic functions such as paying bills and receiving earnings or welfare payments very difficult.
In 2008 5.4% of households were in arrears, considered housing costs to be a heavy burden and had difficulty meeting unexpected expenses.
The over-indebtedness level rose to 24% in households headed by someone without a job, 23% among lone parent households and 22% among local authority tenants.
It is likely that over-indebtedness has increased significantly since then, although the detailed data used in this study are not available for any subsequent year.
A quarter of over-indebted households were 'consistently poor'.
The report states that there is little evidence of progress on a commitment in the bank recapitalisation scheme to provide basic bank accounts to excluded groups, it says increased bank charges will exacerbate rather than reduce the problem.
The research study was commissioned by the Social Inclusion Division in the Department of Community, Equality and Gaeltacht Affairs, as part of its remit to monitor poverty trends under the National Action Plan for Social Inclusion 2007 - 2016.
A spokesperson for the Department commented: "This is a timely study on two emerging issues which are likely to impact on poverty. The findings will be used to inform current policy initiatives on financial exclusion and household debt. This report also underpins the continued importance of tackling poverty and social exclusion as national policy issues. The challenge is to promote sustainable economic growth along with imaginative social policies, so as to enable citizens and communities to overcome the current difficulties." See The Economic And Social Research Institute
(JG)
These claims came after the institute published a study on financial exclusion and over-indebtedness in Irish households.
The study draws attention to measures in the bank recapitalisation scheme that it says have not yet been implemented.
It revealed that 20% of Irish households do not have a bank account and the level of banking exclusion here is three times higher than the EU average.
Such exclusion affects access to credit, ability to save and access to housing insurance and it makes basic functions such as paying bills and receiving earnings or welfare payments very difficult.
In 2008 5.4% of households were in arrears, considered housing costs to be a heavy burden and had difficulty meeting unexpected expenses.
The over-indebtedness level rose to 24% in households headed by someone without a job, 23% among lone parent households and 22% among local authority tenants.
It is likely that over-indebtedness has increased significantly since then, although the detailed data used in this study are not available for any subsequent year.
A quarter of over-indebted households were 'consistently poor'.
The report states that there is little evidence of progress on a commitment in the bank recapitalisation scheme to provide basic bank accounts to excluded groups, it says increased bank charges will exacerbate rather than reduce the problem.
The research study was commissioned by the Social Inclusion Division in the Department of Community, Equality and Gaeltacht Affairs, as part of its remit to monitor poverty trends under the National Action Plan for Social Inclusion 2007 - 2016.
A spokesperson for the Department commented: "This is a timely study on two emerging issues which are likely to impact on poverty. The findings will be used to inform current policy initiatives on financial exclusion and household debt. This report also underpins the continued importance of tackling poverty and social exclusion as national policy issues. The challenge is to promote sustainable economic growth along with imaginative social policies, so as to enable citizens and communities to overcome the current difficulties." See The Economic And Social Research Institute
(JG)
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