The gap between the haves and have-nots in Ireland may be widening because of the pandemic, according to Bank of Ireland.
The results of research conducted for the bank in October by Red C show that 36pc of those surveyed are either struggling to keep their heads above water financially, or are stretched and living from payday to payday.
The picture would be even more dire were it not for the unprecedented financial supports provided by the State to more than one million people who found their jobs hit by the pandemic.
Additionally, mortgage breaks provided by lending institutions – now at an end – provided support to struggling homeowners.
But Gavin Kelly, the chief executive of Bank of Ireland’s Retail Ireland unit, said the obvious stress on a swathe of people because of the Covid crisis is “only one part of the story”.
“Our latest survey also found that about one in four – 27pc – are in the ‘thriving’ category, meaning that they can effectively manage their spending, savings and borrowing and can also plan ahead for the future,” he said.
“That number has increased by four percentage points from February, which probably reflects the fact that many people have been fortunate to keep their jobs and incomes intact,” said Mr Kelly.
Research: Gavin Kelly of BoI. Photo: Frank McGrath
He pointed out that lockdown restrictions forced people to curb their spending, resulting in increased savings.
“For the moment at least, it looks as if the pandemic may be widening the gap between those who have high financial wellbeing scores and those who don’t,” added Mr Kelly. “And that should be a big concern for us all.”
Sectors including hospitality, retail and the arts have been more severely impacted by the pandemic than others. Those sectors also have a bigger share of lower paid and part-time workers. In February, before the pandemic hit, hospitality accounted for 7pc of Ireland’s employees but just 1pc of PAYE contributions.
“There is indeed a strong correlation between income and financial wellbeing, but one doesn’t necessarily follow the other,” said Mr Kelly. “Our research shows that 44pc of those in the top financial wellbeing category, or ‘thriving’, have an income of less than €50,000.”
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