Inflation and high cost of living ‘are pushing people’s financial dreams out of reach’

Surging prices are getting in the way of people paying off their mortgage, owning their own homes, and providing some funds for their children, according to a survey carried out among 4,000 respondents who are members of Capital Credit Union in Dublin.

More than half of the respondents to the survey said Ireland’s high cost of living and ongoing inflation are the primary barriers to achieving their financial aspirations.

The next reason cited was insufficient income, with a lack of savings third on the list.

The survey also found that most people believe their financial situation has stabilised.

This comes after years of rocketing food and energy inflation, higher mortgage costs and motor fuel price rises.

Chief executive of the Capital Credit Union Pat Byrne said the survey findings reveal a nuanced picture of ­financial stability in Ireland.

“The majority of respondents said they believe their financial situation to be stable to various degrees, yet more than half (51pc) identified Ireland’s inflationary pressures as the most significant barrier to achieving their financial goals.

“This suggests that while people might be able to pay the bills, the high cost of living often hinders their progress towards furthering their financial situation.”

He said that the core financial goal of most people is to pay off their mortgage and own their house.

The second goal for parents is generally to raise their children and to see them make a start on their life and financial goals.

The third is to ensure that they provide for a comfortable retirement.

“We try to encourage members to set their financial goals as early as possible. That way they’re more likely to achieve them,” Mr Byrne said.

Mr Byrne said that insufficient income was in second place when respondents were asked to rank the reasons for not being able to realise their financial aims.

“And fewer still say ‘lack of savings’ is the big challenge,” Mr Byrne said.

The credit union boss said that in the last couple of years this country has seen house prices increase at a consistent pace, mortgage rates increase for hundreds of thousands of households, and fuel prices soar.

“All of these have created the perfect storm whereby financial ambitions such as saving for a house or future financial security for your family are continuously pushed out of reach.”

The survey showed that almost half the respondents say they make their financial decisions in conjunction with their partner.

Mr Byrne said: “How people make their financial decisions, whether it be the weekly budgeting lists or the bigger ticket decision, is really interesting as it gives an insight as to how we, as a nation, approach our personal ­financial affairs.

“Our survey would seem to point to a ‘two heads are better than one’ strategy in many households.”

Capital Credit Union has over 50,000 members and several branches across south Dublin.

It offers its members personal loans, mortgages and business loans.