From food and fuel to beer and broadband – how price rises are costing families an extra €3,500 a year
The price we pay for almost everything has gone up and it is likely to keep rising. Shocking and repeated rises are sucking money out of household budgets.
ere, we take a look at a family’s typical outgoings and show how much prices have gone up this year. All told, the average family in Ireland is probably facing around €3,500 in extra costs over a year.
Grocery price inflation in Ireland has reached 5.5pc, the first time it has risen above 5pc since August 2013, according to figures published by research group Kantar. The group analyses the prices of more than 30,000 products to determine the inflation rate.
The figures show the average household is facing an annual increase of €330 in the cost of groceries.
Higher energy prices, accelerated by the ongoing conflict in Ukraine, have made it more challenging for producers to make and transport food.
Since the end of January, prices have increased in Aldi, Lidl, Tesco, SuperValu and Dunnes, with three out of the five having an increase of €2 or more.
Staples such as milk, bread, pasta, cooking oils, coffee and meat have all risen in price.
Some estimates warn that the cost of groceries will rise by €800 this year.
The relentless rise in the cost of petrol and diesel is causing huge anxiety for motorists, as it is a massive drain on incomes. It now costs more than €100 to fill a typical family car, with the annual increase in the cost of motor fuel now €750 compared with last year, according to AA Ireland.
Many can’t remember having to pay €100 to fill up.
And the omens are not good for the next few months, with bans on Russian oil and a reluctance by Opec members to fill the void meaning prices are likely to remain elevated.
Never before have we had so many and such large rises in the cost of electricity, gas and home-heating oil.
The succession of double-digit cost rises last year and at the start of this year have added €1,100 to the cost of heating and lighting the average home, according to the Economic and Social Research Institute (ESRI).
And it is not just the unit prices of energy that have gone up to reflect crazy rises in wholesale prices.
Two of our largest energy supplies have used the current energy crisis to hike their standing charges.
Electric Ireland’s standing charge for electricity went up by 35pc in May. Bord Gáis Energy’s standing charge for electricity went up 29pc earlier this year, and 43pc for gas, according to price comparison site Bonkers.ie.
This means even customers who reduce their usage to zero will still end up having to cough up lots of money.
The ESRI estimates the typical household faces hikes of €2,000 over a year.
Rents and mortgages
The cost of renting has doubled in the past decade.
The average national asking price for a new rental, if you can find one, is now €1,567, according to Daft.ie.
Dublin rents now average €2,100 a month after jumping by 10pc in a year.
It is cheaper to service a mortgage than rent, but many renters either don’t qualify for a mortgage or can’t find anything in their price range.
And mortgage costs are on the rise. Close to half a million households face higher costs when the European Central Bank starts hiking rates from July. This is because they are on variable or tracker rates.
These mortgage holders are set to be hit by the first in a series of interest rate rises from next month, a move that will push annual repayments up by more than €1,000 for a family with a typical tracker.
Even the cost of a pint is on the rise. A pint of plain will now set you back €5.20 in most pubs, but far more in some. Lager has increased from €5.30 to €5.50 a pint.
And a can of lager bought from an off-licence is now €2.16, up by 28c in a year, according to the CSO.
The introduction of minimum unit pricing in January was an example of very poor timing.
One out of five families with young children are paying more than €1,200 per month on childcare.
A third are paying more than €1,000, according to a survey conducted by Newstalk. Childcare costs in Dublin have jumped 20pc in the past four years – with parents now paying an average of €1,276 per month.
Cup of coffee
The average cup of coffee in Ireland costs around €3.65.
Late last year, the Irish coffee industry warned of expected increases in the cost of a morning cup of Joe following unfavourable weather conditions in Brazil which led to a large portion of the crop in the region being destroyed.
The pandemic has also had an impact on the global supply chain and coffee drinkers are starting to feel the pinch amid price hikes.
Hundreds of thousands of domestic Eir customers and small businesses are to be hit with price rises from August.
Around 500,000 customers will have to pay €5 a month more for landline, television, broadband and mobile services. This rise, which includes VAT, will mean customers will pay an extra €60 a year, adding more to the cost of living.
Just last September, Eir increased voice and broadband prices by €6 a month. This added €72 a year to the average bill.
Vodafone and Three Mobile are also hiking prices.
Now for some good news. Fares on public transport have been slashed – the first such reduction in almost three-quarters of a century. It is part of Government plans to help encourage more sustainable travel.
Fares on Dublin Bus, Luas, Go Ahead Ireland and Irish Rail and Dart commuter services in the Greater Dublin Area will drop by 20pc for the rest of this year.
All Irish Rail intercity and commuter fares across the country will also drop.
Fares on Bus Éireann and Local Link services were reduced by 20pc. Those aged between 19 and 23 can get a 50pc reduction in fares on all subsidised public transport by using an existing Student Leap card or applying for a new Young Adult Leap card.
More good news: pharmacy chain Boots Ireland has promised to freeze the price of more than 1,300 products. Boots said the lines where prices are being frozen cover beauty, health, wellness and baby, and include everyday essentials.
With all these price hikes, consumers need to be earning more. But income increases have been minor, if non-existent, for many.
Average hourly earnings were €27.33 in the first three months of this year, an increase of just 1.9pc from the same period last year, according to the Central Statistics Office.
In the Dáil this week, Finance Minister Paschal Donohoe said the Government may move income tax credits and bands in the Budget.
This would increase incomes, he said.