COST OF LIVING increases are now the dominant issue among consumers with 81% of respondents saying they are a key concern, new research has found.
New research by Permanent TSB has found that the level of worry about price increases is up from 62% just three months ago and 53% in October 2021.
The same research found that 62% of people feel they will have to cut back on food spending over the coming year in response to sharp price rises, while 53% of people fear they will be unable to pay higher energy bills.
The findings are part of the latest 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 and their views on the outlook for the economy and country, as well as a more detailed survey of different issues.
The research was conducted by Kantar in April 2022 amongst a representative sample of 1,002 people aged over 18.
Leontia Fannin, Head of Corporate Affairs at Permanent TSB, said that the boost in optimism as Covid-19 began to dissipate has been lost because of rising prices.
“The feel good factor that emerged as Covid-19 began to recede has clearly been halted by the recent surge in the cost of living and economic uncertainty arising from the devastating events in Ukraine.
“The cost-of-living issue is likely to dominate the thoughts of Irish consumers through the rest of this year and beyond and it is likely to have significant implications for businesses across the board,” she said.
Consumer pessimism is at its highest level for nine years – 43% feel they will be worse off in a year’s time, up from 22% in January.
53% of respondents feel they are less well off than they were a year ago, a huge increase from the 32% in January. 43% feel they will be less well off in a year’s time, up from 22% when asked three months ago.
The last time pessimism about the future was this high was in 2013 when it reached 45%. Only 24% of people feel they will be better off in a year’s time.
62% of people feel they will have to cut back on food spending over the coming year in response to sharp price rises, while 53% of people worry they will be unable to pay higher energy bills.
There is also significant concern about making ends meet. 61% describe themselves as “just getting by” financially. 58% feel confident managing day-to-day expenses while 22% do not. 43% of respondents don’t have money left over at the end of the month and 47% don’t feel they could handle a major unexpected expense.
Paul Moran, Associate Director at Kantar, said that many consumers have been shocked at the rise in prices.
“The unprecedented acceleration in inflation has to a certain degree, caught many consumers by surprise. We are now seeing a generation of consumers who have never experienced such a phenomenon.
“It is not just about the fiscal implications in the short term – there is a more deep-rooted emotional response; the fear of the unknown for many. They feel they are in uncharted territory but are now having to map a journey forward,” he said.
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