The vast majority of would-be homebuyers fear they will not be able to raise enough cash for a house deposit due to soaring inflation, a survey has found.

For 60% of young people, their biggest concern is that they "are unable to save for their deposits", a survey from insurance firm Aviva revealed yesterday.

However, the increases in energy bills are currently the biggest financial worry for all adults, and this is highest amongst homeowners at 39%.

However, 21% said that their greatest financial concern was just keeping their heads above water as day-to-day living expenses bite.

This was more pronounced among women at 23% than men at 19%.

In Association with

Housing campaigner David Hall, of the Irish Mortgage Holders Organisation, said: "The cost of everything is going up now: fuel prices, supermarkets, everything to do with living. So, it's depleting your ability to save; coupled with house prices going up, it's a complete disaster."

House prices are currently rising by more than 15% a year which coupled with inflation at 6.7% is sparking fears the European Central Bank (ECB) will move soon to increase interest rates.

Mr Hall advised buyers to opt for fixed-rate deals on home loans to protect themselves from expected mortgage interest rate rises.

The financial squeeze is worst for those in their 20s and early 30s when most people "are living paycheque to paycheque", the survey found.

Dr Seán Healy, of Social Justice Ireland, said the poorest were being worst affected by tightening finances.

He called for a €27-a-week pension increase for older people, which would raise the basic State pension to around €280 a week.

He said: "€27 per week is the increase required to core social welfare rates and pensions in the next Budget if current trends are maintained." He said this is "simply to bring these payments back to where they were 15 years ago, before the bank crash".

Rising prices mean that most of the €5 increase in the State pension announced in October's budget has been lost to inflation, according to Age Action's Celine Clarke.

She said: "We've seen with the cost of living and particularly the cost of energy going up, older people are struggling, there's no doubt about it. Two-thirds of them do not get the fuel allowance, so while we may hear the fuel allowance has been topped up, that doesn't reach two-thirds of people over the age of 65."

She added: "The €5 increase in the State pension in Budget 2022 replaced less than half of the money that had been lost in purchasing power since January 2019. So people's income didn't stay static; it fell behind because of inflation. If you depend on the State pension, you've little bandwidth to cope with economic shocks."

Aviva's David Lyons said: "Fuel costs are hitting households hard and are currently cited as the biggest financial worry for homeowners, particularly for those over 55."

He added: "Unfortunately, this situation is only going to deteriorate further as inflation is expected to continue to surge, with the Central Statistics Office reporting that inflation is now running at 6.7% as of March, up from an annual increase of 5.6% in the year to February 2022, with this trajectory set to continue.

"Reviewing your finances on a regular basis may prove to be a useful exercise as it allows you to assess your budget and where potential savings can be made."