New research by Permanent TSB has found that cost of living increases are now the dominant issue among consumers with 81% of respondents saying they are a key concern – up from 62% just three months ago and 53% in October 2021.
And 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 18+.
Consumer confidence falling as attitudes to personal circumstances and the economy deteriorate
Looking at the recurring questions on attitudes to the economy and their own personal circumstances, key findings include:
Switching providers is on the rise
The research also examined consumers attitudes to switching. With Ulster Bank and KBC exiting the market shortly, the survey found the number of people considering switching their current account has doubled over the past year – from 12% last year to 23% this year.
For people with a mortgage, 1 in 4 (24%) are considering switching their mortgage over the next year. This contrasts with recent Central Bank and BPFI data on mortgage switching activity which shows just under 9% of mortgages were switched in 2021 with almost 4% switched in the first four months of this year.
The survey also showed far greater appetite among consumers for switching other services to save money:
Speaking on the findings, Leontia Fannin, Head of Corporate Affairs at Permanent TSB, said: “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.”
Claire Cogan, a behaviour scientist and founder of the consultancy Behaviour Wise, said; “the rising cost of living is having a deep impact on how we are feeling and behaving. Optimism is fading and anxiety is on the rise, which is a concern. There is evidence that people are adopting their behaviour to meet the challenges, but there is also evidence that many feel in a financially precarious position. It will be increasingly important over the coming months to build our financial resilience, as upward pressure on the cost of living shows no sign of abating.”
Paul Moran, Associate Director at Kantar, commented, “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”.