A significant proportion of Irish consumers remain financially vulnerable, with 15% of households saying they would be unable to cope with an unexpected €1,000 expense, according to the latest Credit Union Consumer Sentiment Survey.
The findings, released this week, highlight persistent pressure on household finances, despite broader improvements in the Irish economy. While over a third of respondents said they would rely on savings in a financial emergency, that figure has dropped from 44% in 2023 to around 34% this year. Meanwhile, 18% said they would turn to their regular income, and a small but growing number indicated reliance on credit cards or other non-bank lenders.
The question about emergency financial preparedness has been a staple of the sentiment survey for five years, mirroring a similar measure used in the U.S. Federal Reserve’s annual economic well-being report. Economist Austin Hughes noted that the reduced dependence on savings may reflect both the drawdown of Covid-era reserves and the rising cost of living, which continues to erode household purchasing power.
“Although real household income has increased, the number of households has likely risen faster, meaning the average spending power may actually have declined,” Hughes explained. “Inflation has eased in the past year but prices remain high, and for many families, the burden of fixed costs remains severe.”
Those aged over 65 and young adults aged 25 to 34 were the most likely to rely on savings, while under-25s and those aged 45 to 64 were least prepared. The latter group, Hughes said, may be grappling with high fixed costs, leaving little room to manage unforeseen expenses.
Interestingly, the share of respondents turning to their income has risen modestly over the past six years. Hughes attributed this to both a more resilient economy and the fact that some households no longer have accessible savings.
The data also revealed that financial stress is more acute among low-income households and those struggling to make ends meet. These consumers are more likely to depend on costly forms of credit or even resort to selling possessions in an emergency.
From a policy standpoint, Hughes warned that the survey results should challenge the narrative that easing inflation and growing incomes eliminate the need for further government support. “The notion of a ‘representative consumer’ lifted by macroeconomic growth doesn’t reflect the reality for many,” he said. “Budget 2026 must acknowledge that domestic financial strains, not just global trade tensions, pose a real threat to economic stability.”
