Ireland the second most expensive country in the EU

New data from Eurostat has confirmed what many of us probably already feel: the cost of living here is high. In fact, Ireland is the second most expensive country in the entire EU, with prices now 38% above the EU average — behind only Denmark.

This is a jump from 2015, when prices were 28% higher than average. And Irish prices are now even higher than traditionally costly countries like Finland, Sweden and even oil-rich Norway! 

*non-EU country

Where are we paying more?

Taking a deep dive into the figures, Ireland has the second most expensive alcohol in the entire EU with prices almost DOUBLE the EU average. Only the Finns pay more. 

There is a huge variation in the price of alcohol among EU countries, more so than any other product, which is mainly due to differences in taxation, with Ireland having some of the highest rates of tax on alcohol in the world. And of course the introduction of Minimum Unit Pricing (MUP) in recent years has added to costs even more.

The cost of food and non-alcoholic drink is also relatively expensive in Ireland. Our prices are the third highest in the EU, behind only Luxembourg and Denmark, at almost 15% above the EU average. However this is an improvement from 2020, when prices were over 21% higher.

Eating out or staying in hotels isn’t cheap either, with prices in hotels and restaurants 29% above the EU average, second only to Denmark.

Other areas where Ireland ranks among the most expensive include communication services, which are nearly 40% above average, and electricity, gas and fuel costs, which are 17% above average.

There is some good news though: clothing costs in Ireland are actually 1% BELOW the EU average (thanks Penneys!) and the cost of furniture, carpets, and flooring is just 6% higher. 

The "Harvey Norman'' effect can also be seen in our prices for household appliances. Although prices here are the fifth highest in the EU they're "only" 9% above the EU average.

Why is Ireland so expensive?

There are many reasons why Ireland is an expensive place to live.

These include:

• Our higher wages 
• A lack of competition in certain sectors 
• High taxation on certain goods such as tobacco, alcohol, and petrol and diesel
• Low government subsidies in certain areas such as public transport and childcare compared to our European neighbours
• Our small, dispersed population which pushes up the cost of delivering good and services 
• High insurance and energy costs for businesses, which then get passed on to consumers

We delve into all these reasons in more detail in this article here.

What can be done?

Ireland will never be a cheap place to live — nor should we necessarily want it to be. As it should be noted that most of the countries with the highest standards of living in the world (such as Switzerland, Iceland, Norway and Denmark) also have very high prices — often in excess of Ireland's.

However the problem is that wages in Ireland, while certainly high by international standards, generally don’t quite match the salaries in other very high-cost countries. In Ireland we have Danish prices but German wages. 

At the same time, taxpayers in more expensive countries tend to get back more from the Government in terms of better and more affordable healthcare, childcare and public transport — though there have been welcome improvements made here in Ireland in recent years.

In short, Ireland often feels like it charges Scandinavian prices and taxation while delivering mid-tier services for taxpayers.

But there are steps both the Government and consumers can take to help reduce the cost burden.

• The Government could look at lowering the standard rate of VAT (currently at 23%, one of the highest rates in the world) and tackling persistently high insurance costs.

• Consumer protection bodies like the CCPC, and regulators such as ComReg and the CRU, should be given more powers and be more proactive in standing up for consumers.

• A dedicated Minister for Consumer Affairs could help ensure consumer interests are better represented at Government level.

And while many of these issues are structural, consumers themselves can still take action. By shopping around and switching providers — whether for energy, broadband, or insurance — it’s possible to save hundreds of euro each year.

And that's where bonkers.ie can help! 

Switch and save

We're all about saving you money here at bonkers.ie so if you're fed up with the high cost of living, remember that you could save HUNDREDS of euro on your household bills right now by switching provider on bonkers.ie! 

Whether you’re looking for cheaper energy, faster broadband, a higher savings rate, better insurance cover or a lower mortgage rate, we can help.