This means that household net worth now stands at its highest level since the final three months of 2008. As highlighted in the Central Bank’s financial statistics, this is down to the continued increase in the combined value of households’ two main assets – property and financial (such as investments).
As well as this, in an environment where people have less ability to borrow, there has been a steady pay down of debts. This has meant that liabilities are shrinking and that household debt continued its decline during the quarter, falling to €157 billion, or €34,069 per person, representing a decline of 1.6% over the period.
It is, however, interesting to note that while household wealth rose and debt fell towards the end of the year, in the same quarter of 2014, the Insolvency Service of Ireland (ISI) reported a 148% increase in the number of Personal Insolvency Arrangements (PIA’s) approved over Q3 2014. Q4 PIA’s approved also exceeded the previous three quarters combined.
Nicola Hogan, Deloitte Restructuring Services, commented: “Although these figures may be slightly skewed due to the waiving of all ISI fees in October 2014, it brings deliberation as to whether those in financial difficulty were triggered to engage in the personal insolvency procedures in the final quarter of 2014 once they became aware of such improvements in the value of their net assets.
“This increase in personal insolvency procedure also highlights that while Ireland continues to emerge from its recession, the extended borrowing binge that brought on the crisis in 2008 continues to have longer-lasting consequences for many individuals and households.”