Economic crisis leaves Irish consumers struggling says European payment report
Published today, the European Consumer Payment Report 2021 shows the ongoing effects of the Covid-19 crisis on Ireland’s consumers. While many say they want to ensure they are in a stronger financial position before another global crisis, a quarter have less visibility of their short-term borrowing now than they did before the pandemic. The Ireland edition of the European Consumer Payment Report provides insights into the everyday lives of consumers, their spending habits and their ability to manage their finances. From savings to sustainability, download a copy for a comprehensive view of consumer finance trends.
The Covid-19 crisis has hit Ireland’s consumers hard, with 41 per cent saying they are worse off now than they were before the pandemic, according to Intrum’s annual Consumer Payment Report, published today.
In the survey of more than 24,000 consumers across Europe, more than one in three Irish respondents (37 per cent) said they had to stop working at some point, higher than the European average of 28 per cent. However, consumers are taking the opportunity to improve their financial literacy, with 63 per cent saying they want to ensure they are in a stronger financial position before another global crisis.
Despite this, a quarter say they have less visibility of their short-term borrowing now than they did before the pandemic, while 22 per cent say they don’t even want to know how much they owe.
Younger age groups denying debt
The 2021 European Consumer Payment Report shows this trend is especially pronounced among younger age groups, with 35 per cent of 22-37 year olds admitting they have their heads in the sand over their financial situation. It reflects a growing generational divide in the aftermath of the pandemic, which has widened existing financial inequalities.
“The Covid-19 crisis is a stark reminder of the essential role that financial education plays in helping consumers manage their money and withstand curveballs when they arise,” said Intrum Ireland Managing Director Eddie Nott.
The pandemic has encouraged parents to spend more time helping their children understand financial management – 66 per cent said they were more likely to do this now. However, although well-meaning parents are passing advice to their children, it may prove to be counterproductive if the parents themselves have not had a solid financial education, or do not take care to explain the nuances.
“Almost two thirds (66 per cent) say they are more likely than they were to urge their children not to take on debt. This isn’t necessarily good advice. Managed correctly, debt supports entrepreneurial pursuits and forms an integral part of the business community and wider economy,” said Nott.
Consumers taking action on sustainability
This year’s survey shows that Ireland’s consumers are increasingly holding firms to account on sustainability, with 60 per cent saying they wouldn’t buy from a company they knew to be responsible for harming the environment.
Four in 10 Irish consumers (40 per cent) say they would feel no guilt about paying a company late if they had reason to believe that the company was unethical, compared to a European average of 29 per cent.
“While it’s true that consumer intentions don’t always translate into action, businesses would be wise to pay attention to this trend if they are to retain the loyalty of these customers,” said Nott.
The European Consumer Payment Report contains detailed information on consumer payment behaviour and attitudes. For more information, download the report here.