An inability to process financial information leaves many Irish consumers vulnerable to poor money decisions, increasing debt, and long-term financial burdens. With an aging population and a rising cost of living, financial literacy is more crucial than ever.
To address pressure on the state pension system, the Irish Government introduced a pension auto-enrolment scheme, live Sept 2025, aimed at assisting low-income workers with retirement planning. However, this initiative highlights a deeper issue: Ireland’s financial literacy deficit.
A Department of Finance report found that 43% of Irish adults fail to meet the OECD’s minimum level of financial literacy.
The National Bureau of Economic Research defines financial literacy as “people’s ability to process economic information and make informed decisions about financial planning, wealth accumulation, pensions, and debt.”
These decisions impact individuals daily, yet many Irish consumers lack the knowledge to make informed financial choices.
As the cost-of-living crisis continues, financial anxiety is increasing, leading to growing interest in financial wellbeing. However, Ireland lags behind other countries in prioritising financial education. Like many social challenges, responsibility has fallen largely to the private sector, and come with bias and ethical questions.
Financial habits form early, with research suggesting that attitudes toward money develop as young as seven years old. Historically, Ireland’s financial literacy shortcomings were masked by restricted access to credit, which limited borrowing. However, since the Celtic Tiger era, easy access to credit has led to significant personal debt accumulation.
Today, the prevalence of short-term credit resembles conditions before the 2008 global financial crisis. While reckless mortgage lending was a major factor in that crisis, today’s issue is more subtle: the rise of small, impulse-driven, debt-fuelled spending habits. Online shopping has made it so much easier to spend money. Many consumers now finance everyday expenses through credit, creating a cycle of short-term debt.
Retailers have capitalised on this trend, fostering hyper-consumerism in a financial landscape where many lack the necessary literacy skills to manage credit effectively. Subscription models and hire-purchase agreements have existed in Ireland for decades—slot televisions in the 1960s are an example—but modern financing options, including “buy now, pay later” (BNPL) schemes, have increased consumer vulnerability.
Subscription services have become widespread, with many Irish households maintaining multiple streaming, grocery, and retail subscriptions. Even Revenue and An Post have adopted this model, offering property tax deductions at source and direct debit payments for TV licences.
While convenient, these arrangements normalise small, ongoing payments, often masking the true annual costs. Digital payments further encourage “tap-happy” spending, where consumers are less mindful of their financial outflows compared to using cash.
Companies exploit behavioural biases to retain subscribers, using strategies such as default bias, loss aversion, and dark patterns in cancellation processes. Consider free trials for streaming services: consumers sign up for a flagship show, forget to cancel, and continue paying due to the “sunk cost” effect. Similarly, services use “coming soon” content and personalised recommendations to keep users engaged.
BNPL services are now widely available in Ireland, with providers such as Klarna aggressively promoting their ability to increase shopping frequency. A concerning 36% of consumers fail to recognise BNPL as a form of debt.
These services encourage overspending, with BNPL users shopping 20% more frequently and spending 45% more per transaction than non-users. More troubling is the growing reliance on BNPL for essentials, with reports of Irish consumers using these services to finance groceries and household bills.
Despite these challenges, emerging trends suggest a shift toward financial mindfulness. “Deinfluencing,” a social media movement encouraging consumers to question their spending habits, is gaining traction. This movement challenges impulse buying and urges consumers to ask, “How much is enough?”
Practical steps can help mitigate impulsive spending:
• The 72-hour rule: Delay purchases for 72 hours to determine if they are necessary.
• Subscription audits: Regularly review direct debits and subscriptions to assess their value.
• Debt awareness: Recognise BNPL schemes as debt obligations rather than convenient payment methods.
The increasing reliance on digital payments, BNPL, and subscription models underscores the urgent need for financial literacy education in Ireland. Without it, consumers remain vulnerable to poor financial decisions, rising debt, and long-term financial insecurity.
The swift implementation of a national financial literacy strategy is crucial in equipping Irish consumers with the knowledge to navigate an increasingly complex financial landscape.
It’s advisable to seek professional financial advice to tailor a financial planning strategy that aligns with your personal goals and circumstances, with careful planning and consideration, you can make an informed decision that sets you on the path to financial success.
Andrew Hamilton is a journalist, investigative reporter and podcaster who has been working in the media in Ireland for the past 20 years. His areas of special interest include the environment, mental health and politics.