Families struggling with rising bills for groceries, utilities and insurance must learn to shop around, writes Mark Channing
The low rate of inflation is masking the crippling effect that rising prices are having on families.
Despite an official annual inflation rate of just 0.7%, the cost of many family essentials are going up at a much faster rate.
According to research company Kantar Worldpanel, food prices are increasing at an annual rate of 5.5% — eight times the rate of inflation. Furthermore, the cost of health insurance for families has doubled in real terms since 2007, and bonkers.ie, a price comparison site, reveals that gas prices have gone up by 35% in two years — and will rise again by 2% in October following approval from the Commission for Energy Regulation.
As prices soar, nearly half of all households are struggling to stay afloat financially, claims research published by the Central Statistics Office (CSO). The CSO found that 43% of households were struggling to keep up with bills and debt repayments. Higher than expected or extra costs were cited by 73% of households when asked why they were having financial difficulties.
“In the good times there was often something left in the bank at the end of the month, but that’s no longer the case for a lot of families,” said Michael Culloty of the Money Advice and Budgeting Service.
Culloty added that cutting costs and drawing up a budget was crucial for families struggling with their finances.
“Budgeting is essential but it requires research,” he said. “You need to be aware of what you’re spending on bills, not just on a monthly basis, but on an annual basis too. ”We look at savings you can make to boost your family’s budget.
Families should consider ditching TV, home phone and broadband bundles and consider switching to standalone broadband services and free TV. “While UPC and Sky offer products with features that many people want, it can make good financial sense to go for a standalone broadband plan and use Saorview or Freesat for your TV needs,” said Simon Moynihan of bonkers.ie.
The broadband market in particular has become far more competitive. Moynihan suggests Smart Telecom’s home broadband and phone package which costs €29.95 a month. The cost includes free line rental and free calls to other Smart Telecom customers. It is not available in all areas, but more than 500,000 homes can sign up to the service.
Vodafone’s Simply broadband package is another alternative, costing €30amonth.
Ditching your pay TV subscription in favour of a combination box which receives both Saorview and free-to-air satellite TV can save families hundreds of euros a year. There is an initial cost for the equipment and box which can be bought for under €200. After that, however, there are no monthly charges.
The proportion of expendituregroceries has been declining but the weekly food shop still accounts for more than 16% of average household expenditure, according to the CSO. This equates to a weekly spend topping ¤130 on groceries — a figure likely to be higher for many families.
The downturn has forced 51% of consumers to cut back on how much they spend on groceries, claims the CSO.
The National Consumer Agency (NCA) has published research showing consumers make savings on groceries by shopping in more than one supermarket and by switching to cheaper own-brand items.
“There have been significant shifts towards supermarket own-brand labels as consumers believe that the quality of ownbrand products has improved,” said Fergal O’Leary, director of research and policy at the NCA. “Consumers are increasingly aware of the options and the potential for savings which own-brand products present.”
Families that switch their shopping away from mainstream supermarkets can make big savings. According to Aldi, families could save more than €3,000 a year by switching to the discount supermarket.