360,000 households to spend on improving home in 2018
- Average spend on home improvements over the last five years was €7,500, according to latest Aviva Family Finance Report December 2017
- Growing confidence in the economy tempered by cautious approach to Family Finances but holidays abroad now seen as a staple of family budgets
12th December 2017: Just over half of all homeowners plan to undertake some improvements to their homes over the next five years. That amounts to almost 600,000 households and almost three in five of them (360,000) intend to get their improvements done over the next 12 months. These are among the findings of the latest Aviva Family Finance Report December 2017, which provides a snapshot of the financial health and wellbeing of households across Ireland.
The research, carried out for Aviva by Red C, found that the vast majority (70%) of those planning to renovate say they will pay for the work from savings with just 6% of respondents saying they will take out a bank loan and 9% relying on a loan from a credit union. The average spend on home improvements over the last five years was just over €7,500 with the majority (57%) spending less than €4,000.
Most of the work being planned can be classified as modest with 80% of respondents saying they will upgrade their interior décor while 40% intend to have their gardens landscaped. Just 10% plan to extend, nearly double the percentage that extended their homes over the last five years.
Commenting on the Report, Ann O’Keeffe, Head of Individual Pensions and Investments at Aviva, said: “Home improvements are a good barometer of financial wellbeing in the average household and our findings in this area reflect the gradual uplift in confidence that emerges from our household research over the last 12 months. But it is a confidence tempered by controlled consumer spending out of savings rather than borrowing. So while householders are growing in confidence, they are certainly not losing the run of themselves.”
Our findings make clear that householders are motivated to make their homes more energy efficient with the majority of work done over the last five years and a third of projects planned over the next five involving some energy saving measures. Yet, the take-up of energy efficiency government grants among respondents is low at just 8%. Asked why they did not apply for a grant:
- 45% said they did not think they were spending enough
- 34% believed they would not qualify
- 8% said it was too much hassle/paper work
- 5% just didn’t bother
“The interest among householders in sustainable energy measures is a positive signal for our overall environmental sustainability but it’s clear that if government grants are to have an impact, they need to be more accessible and attractive to households,” said Ms O’Keeffe.
Another barometer of household financial health is the family holiday. Our survey found that over a third (35%) of respondents had taken one holiday abroad in the last 12 months and one in five (19%) enjoyed two foreign trips while nearly a quarter enjoyed three or more.
Among those who say they struggle to make ends meet, 65% took at least one holiday abroad, with the younger 18 to 34 strugglers more likely to travel abroad than their older counterparts. Only 12% of those who describe themselves as living comfortably did not holiday abroad while one in three enjoyed at least three foreign trips. Over 55’s in the comfortable category emerge as the most travelled on an annual basis of any cohort in the population.
“In our strongly recovering economy, a holiday abroad is now a feature of most household budgets irrespective of financial pressures. The majority of over 55’s take at least one holiday abroad but those in this cohort who are living comfortably are certainly enjoying life to the full with 42% taking between three and five holidays abroad over the last year.”
Overall, reassurance about the positive impact of the recovery on household finances can be taken from the finding that 62% said they felt in control of their finances, up nine points from October 2016. Precautionary saving appears to be ingrained in family budgets with over 60% saying fear of the future has made them more likely to save, a finding that is consistently strong across all categories: struggling, comfortable and those getting by.
Although there has been some slight movement within these three categories over the last six months, their characteristics remain the same. Those benefiting most from the recovery are likely to be male, over 65 and without children. Those who struggle are typically female, middle aged with children: 50% of those with families now say they struggle.
“The picture emerging from the data we have gathered over the last year is of a persistent complex divide that owes as much to life stage as it does to job prospects. This presents some serious challenges to policy makers seeking to ensure that the fruits of a growing economy benefit all. It’s clear that the rising tide of economic recovery cannot be relied upon to put wind in the sails of all boats,” concludes Ann O’Keeffe.
For further information about Aviva, visit: www.aviva.ie.
For media queries, please contact:
Emily Kelly, Client Director, FleishmanHillard, 087-9759248
Cathy Herbert, Head of Communications, Aviva Ireland, 087-2395393
Note to the editor:
The research by RED C was conducted from September 20th – 27th. To reach a representative sample of adults, an online survey of 1,306 adults aged 18+ was conducted using RED C’s own online panel, RED C Live.
Quotas are set and final data weighted to known profiles on age, gender, class and region to ensure that the sample is representative of the total Irish population aged 18+. A boost sample of home owners was included to ensure a robust sample of those making home improvements in the past 5 years.
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