Money Guide Ireland

Open an Tesco Credit Card account before the 24th of September 2007 and we you will get a €40 Tesco Gift Card.
Also – Tesco are offering 0% APR on balance transfers for the first 6 months, and a low standard rate of 14.9% APR for purchases.
Also – you get Clubcard points on ALL purchases – made anywhere.
Do your Online Shopping at Tesco too…

Ulster Bank have an introductory offer for new credit card customers
You get 0% APR on balance transfers & purchases for 9 months from the date that the account isopened
After that the Standard APR is 18.3% for purchases
No annual fee.
This matches the offer from First Active.

Inflation grew at an annual rate of 4.9% in June, down from 5% in May, according to new figures from the Central Statistics Office.

However, when the cost of mortgage repayments are excluded, the harmonised index of consumer prices, the common measure of inflation across Europe, shows prices are running ahead by 2.8%. This is 1% higher than the eurozone average.

June’s inflation figures show that the cost of mortgage interest has risen by 46% since June 2006, while there was also a notable increase in the gas and electricity prices.

The CSO report shows electricity prices are up 12.6% on last year and gas prices have increased by 20.5%.
Doctors’ fees have increased 4.9% since June 2006; dentist services are 3.3% higher and hospital fees are 4.4% ahead.
Health insurance costs have increased by 9.6%.

Transport costs, excluding fuel, are also substantially higher than a year ago. Air fares, perhaps reflecting extra charges for baggage and online check-in, are 2.7% more expensive, rail fares are up 6.7% and bus fares are 2.9% higher. Taxi fares are 12.4% higher.

Hotel accommodation price have risen by 3.6% in the past 12 months, eating in restaurants is 4.4% more expensive and drinking beer and wine in a licensed premises has risen by 4.1% and 4% respectively.

Food prices have risen by 2.5% since last year, though there were some categories of declining prices, including lamb, bacon, cheese and butter.

You can get financial advice from advisors who work in financial services firms like banks and insurance companies, who generally advise on and sell their own products; and intermediaries, such as investment or mortgage brokers, who advise on and sell products from a number of financial services firms.

All financial advisors must be authorised by the Financial Regulator in Ireland . They have to meet certain standards and must have the skills and knowledge necessary to provide advice. The financial regulator monitors advisors to make sure they continue to meet these standards and that they act in your best interests when giving you financial advice.
The number of financial services firms an advisor deals with affects the level of independence and choice your advisor can offer you for the type of product you want. The more firms an advisor deals with, the more they can shop around and find the most suitable product for you.An advisor may be authorised to offer you advice on products from: one financial services firm (a tied agent); OR a number of financial services firms (a multi-agency intermediary); OR all financial services firms in the market (an authorised advisor).For example, banks and building societies are often tied agents when giving advice on life assurance, pensions and investment products. They usually What is authorised status?The authorised status of a financial advisor tells you the type and range of financial advice they are allowedto offer and whether they deal with one or more financial services firms. Call the financial regulator on 1890 200 469 for information on the authorised status of a financial advisor or to get a list of authorised financial advisors in your area..

Income Protection and Critical Illness Cover

How long would your money last if you were unable to work because of sickness? The sobering fact is that the average family has enough savings to see them through just 18 days,
With interest rates rising, household finances are becoming stretched and many families would struggle if they lost their main income.

In a recent survey for Bank of Ireland – When asked how they would cope financially if either one became seriously ill and could not return to work 36% of parents did not know how they would cope. Nearly two-thirds of parents with children under 18 years, said they would cash in any savings & investments if this happened, while just 3% said they would get a loan or borrow money from friends and family. However with the average SSIA savings lump sum at just eur14,000 the family savings may not be enough to support a family during these difficult years.

There is always the Social Welfare system to fall back on – that is why we pay PRSI. Nobody would be destitute – but income could be significantly lower. A typical family with two adults and 2 children would qualify for € 18,360 – tax free – plus medical cards – not insignificant but would it be enough to live on?

Another option would be to move to a smaller house – generating capital from any equity and reducing mortgage payments. But moving home could have a significant impact for any family with children. For example the children may have to move schools and leave their friends, while parents may lose the support of family and friends that lived locally.
The option of the healthy parent doing two jobs is also not ideal, as they will want to spend some time with their ill partner and children, and perform some of the necessary household duties.

There are a number of insurance products designed to help in such circumstances. The most popular is critical illness insurance, which pays a lump sum if the policyholder is diagnosed with one of a number of serious illnesses. In theory, this should pay off any outstanding mortgage if the breadwinner is forced to give up work because of cancer or a heart attack.

Sample Cost – for Life Assurance & Critical illness cover eur 49.85 per month
(Based on eur100,000 dual life cover and eur50,000 dual Critical illness insurance for a couple both aged 30, both non-smoking, over a term of 25 years, with Bank of Ireland Life)

Another option is income protection insurance – it can provide more comprehensive cover than ctitical illness cover. Crucially, it provides a regular income, rather than just a one-off lump payment and will pay out for a far wider range of illnesses.

The most common reasons for people to be signed off sick are stress, depression – and back pain. Neither of these would trigger a pay-out from a critical illness policy but would be covered by an income protection plan.

Income protection insurance also ensures that policyholders receive a regular monthly income for as long as they are signed off sick, for serious conditions this payment will continue until they reach retirement age.
In contrast, most Accident and Sickness plans only pay out for a maximum of two years and some for only 12 months.
Anyone taking out an income protection policy insures a proportion of their income – typically the maximum allowed is 50 per cent of your current salary. However this benefit is paid tax-free, so in net terms the amount of benefit paid is roughly equivalent to 75 per cent of a person’s take home pay.

Policyholders can also claim more than once on an income protection policy. For example, if you are off for months with a back complaint, the policy will pay out. Provided you keep paying the premiums when you go back to work, you will still be covered and you can claim for the same condition again.

The cost of an income protection policy depends on a variety of factors, including a person’s age, occupation, salary and health.Anyone considering an income protection policy needs to ensure they have “own occupation” cover. This ensures that the policy pays out if you are unable to do your own job. Some cheaper policies offer “any occupation” cover which means they will only pay out if you are too ill to undertake any type of paid work.

It is also important to look at the deferral period. Standard income protection policies will pay out after the policyholder has been off work for three months: this is because most employment contracts will provide sick pay during this period. But if you are self-employed and don’t have sufficient savings to fall back on, you should take out a policy that has no deferral period. This will of course be more expensive than a standard policy.If you are lucky enough to have a longer period covered by sick pay – for example a civil service job – you can reduce your premiums by going for a policy with an extended deferral period. Some policies will also deduct any state benefits received from the payout.

Sample cost – Income Protection
As an example, the following is a quote for a non smoking male aged 35 next birthday, a 30 year term, based on a 13 week deferred period claiming a benefit of €2,200 per month.

He will pay *€38.59 after tax relief at 41 % per month for an income of €2,200 per month!

*Tax has been deducted on the above premium at the higher rate of tax. Tax relief must be arranged by claimant directly.

When looking to protect your family’s finances it is important to weigh up the pros and cons of the various policies available. Critical Illness cover or Income protection won’t be ideal for everyone but families should consider them.

A survey looking into the future of Ireland’s personal wealth has found that 65% of people with access to the internet do not use online banking. Coupled with the fact that less than half (43%) have access to the internet on a daily basis, online banking is used by as little as 14% of adults in Ireland.

The independent survey was carried out by Amárach Consulting on behalf of Halifax.

Online banking is used more by the younger generation where take-up is higher (40% of 25-34 year-olds who have internet access use online banking).

The availability of broadband is seen as critical to the development of online banking. According to the OECD**, Ireland currently has relatively low broadband penetration – 12.5 per 100 inhabitants; against the OECD average of 16.9, the UK at 21.6 and Denmark (the highest) at 31.9 per 100 inhabitants. However, this is changing fast with OECD citing Ireland as having the fifth fastest growth in broadband penetration in the World.

Other Facts from the survey

The highest penetration of online banking users is in the 35-44 age bracket – 44% of this age group who have internet access.

The majority of online banking users (62%) use it either once a week or 2-3 times a month.

47% of people bank online to save time, 42% enjoy the convenience and 30% because it is hassle free.

Most common transactions online are the more routine transactions – check balance (78%), pay bills (58%), pay credit card (45%) and transfer money (38%).

Only 11% of people think that online banking will replace bank branches.

The financial regulator did a price survey in Dec 2006 – comapring life insurance quotes. Obviously your individual circumstances will determine your quote – but the survey gives you an adea of which insurers have the lowest premiums.

Comparing term life insurance cover of 200000 for 30 years:
For a 26 year old male non smoker – Eagle Star had the lowest monthly premium at 16.05 – follwed by Caledonian Life at 16.55 and Ark Life (AIB) at 17.19 a month.
Eagle star did well overall with the lowest quote also for a male smoker aged 26 – of 26.85 with Caledonian Life in second place again.
For a 38 yar old smoker and cover of 300000 over 25 years :
Ark Life (From AIB) were just the cheapest at 87.41 a month followed by Eagle Star at 87.70.
Other companies included in the survey were:
Friends First
Irish Life
New Ireland
Canada Life
Hibernian

A credit union is an organisation of people that save together and lend to each other at an affordable rate of interest. It is owned by and exists solely to serve its members and is run by volunteers (committees and board of directors) to represent members’ interests. Each member has an equal say in the running of the credit union, irrespective of how much savings he or she holds. Recent statistics from the Irish League of Credit Unions indicate that about 3 million people in Ireland are members of a credit union, with over 530 credit unions in operation throughout the island of Ireland.

There must be a minimum of between 15 and 25 members to set up a credit union. If the required amount of people have gathered together, the group should apply to the Irish League of Credit Unions, which will test the feasibility of the union. In doing so, the League will call a public meeting of any interested members of the public, which will be attended by both a Field Officer (for the area) and a member of the board of the Irish League of Credit Unions. The members of the public who attend the meeting, the Field Officer and the board member will decide if there is potential for a credit union in the geographical area or profession. If the proposed credit union is deemed to be feasible, members are required to start saving and a “study process” begins. This lasts for approximately 18 months. The Field Officer visits the union every three weeks throughout this period to see that the group is capable of running the credit union.

When the study process is completed and the group is successful, the Irish League of Credit Unions applies to the Financial Regulator to seek approval and registration for the new credit union.

Everyone is entitled to become a member of a credit union but must have something in common with fellow members – they must either live or work in the same locality (community bond), work for the same employer (occupational bond) or work in the same occupation (associational bond). You can be a member of more than one credit union if you come within the common bond. If a member ceases to have a common bond (they leave the area or job where the common bond exists), they can continue to save in the credit union and retain their membership and voting rights.

Each member has the right to see how their credit union is being run and how it is performing. Members are entitled to information on the accounts of the credit unions, as well as the names of credit union employees and members on the Board of Directors and committees. However, the credit union staff and voluntary workers sign a pledge of confidentiality to keep the information on individual member accounts private. Members are therefore unable to obtain information on the accounts of fellow members.

Each member has only one vote, which can be exercised at the Annual General Meeting (AGM) to elect the Board of Directors. The Board then appoints the credit committee. Members at the AGM also appoint the supervisory committee. The supervisory committee’s role is to ensure that the Board of Directors works in the best interests of the members and within the law. The committee checks the books of the credit union and evaluates its operation.

Only members are eligible for election to the Board or committees. They are voluntary positions and holders do not receive any payment.

Every member can put him or herself forward for election to the Board or committees.

There is an entrance fee of 1 euro to become a member in most credit unions. You will also need to hold a minimum of shares between 1 euro and 10 euro.

How to become a member – Once you are within the common bond, you can apply for membership in your designated credit union. Each application must be in writing and accompanied by the required entrance fee and minimum share. You need to present written evidence of your address or place of work to staff at the credit union that you are applying to.

Who can apply for a loan – this depends on the rules of each credit union. Usually, any member of a credit union over the age of 18 can apply for a loan. If a member under 18 years of age applies for a loan he/she may need a guarantor for the loan.

You can fill in a loan application form in the credit union office where you are a member.

Some credit unions operate a credit telephone hotline where details of a loan application are taken from the member over the telephone.

In making a loan application for a larger sum (up to 38,092 euro), you may have to meet with the credit committee. There can also be a medical examination involved in making a larger loan application.

Some credit unions operate an online loan application facility.

The criteria for loans (amount, repayments, length and security offered) can be discussed with a member of the credit union staff.

Each credit union has its own policy on conditions that need to be met before a loan is granted. Once granted, you are asked to complete a promissory note, which is a legally binding document, in which you promise to repay the loan and to commit to regular payments.

Where To Apply If you are not already a member, call into your local credit union for more details. Contact details for your nearest credit union are available here, or check your local telephone directory or contact: