A study carried out by the Economic and Social Research Institute has found that 5.4% of Irish households were considered 'over-indebted' in 2008.

The over-indebtedness level rose to 24% in households headed by someone without a job, 23% among lone parent households and 22% among local authority tenants. The ESRI said these figures are likely to have increased significantly since 2008.

The report also found that 20% of households did not have a bank current account. This was almost three times the EU average. 10% of households were defined as 'credit excluded' - meaning they did not have credit cards or access to loans or overdraft facilities.

The study defined over-indebted households as those which were in arrears on housing or other bills more than once in the previous year, considered their housing costs or repayments to be a heavy burden and were unable to raise money to deal with an unexpected expense.

The ESRI study said the move towards a cashless society meant that financially excluded households risked becoming increasingly marginalised.

It pointed out that a commitment to provide basic bank accounts to excluded groups was part of the recapitalisation of Irish banks in 2008. 'There is little evidence of progress on this commitment to date,' the ESRI said, adding that higher bank charges were likely to exacerbate the problem.

It suggests legislation or action from the banking sector to support access to basic or low-cost banking services, while it suggests greater State involvement in negotiating rent reductions for households receiving Rent Supplement.