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1% Levy on Unit Linked Funds could be extended to other investors.

Published February 16, 2010 Ask the Experts , Investments Leave a Comment

Last weeks Finance Bill cleared the way for a 1% tax on Unit Linked Funds. This charge will mean a tax of €99 on an investment of €10,000. This charge could be extended to funds from banks, stockbrokers and overseas investment providers if the insurance industries lobby is successful as they feel it is unfair to exempt these groups.

The Finance Bill lifted the fee from pension contributions as the government feared it would discourage people from investing for retirement.

The levy could be more than €700 for investors contributing €250 per month over a 15 year time frame and this will be in addition to the existing charges.

Now more than ever it is vital that investors get independent advice on the type of investment plan they go for as tax and charges are a constituent part of a much larger decision making process.

- Steve Garavan

Why use a Qualified Financial Advisor?

Published February 5, 2010 Ask the Experts , Managing Your Money Leave a Comment

There are many reasons why someone may use a qualified financial advisor.

One of the most common is that financial planning can be complex, particularly when considering retirement planning when tax issues arise.

The rules and legislation surrounding this area of financial planning are constantly changing and it can be difficult to keep abreast of all the changes and how they can affect you or your retirement plan.

Even when your situation is not that complex very few people take the time to re-consider their goals, then develop or amend the appropriate strategy to achieve those goals. For couples, goals can be quite different and a QFA has a key role to play when advising clients through this.

There are certainly many people who are very aware and well read and are capable of managing their own financial affairs in relation to retirement planning. However some do not have either the inclination or the time to do so.

For example for someone in a very responsible or senior position, they often are time poor and value their leisure time.

For those who enjoy managing their own money guidance from a Qualified Financial Advisor is likely to be extremely valuable in checking whether your goals and financial arrangements are coming together. They should also ensure that you are using the most up to date tax allowances and exemptions. However engaging on an ongoing basis may not be necessary or appropriate.

It will cost nothing more than an investment in time to check it out!

-Boyd Scott

What is the Budget’s Impact on Pensions?

Published December 10, 2009 Ask the Experts , Budget , Retirement Planning Leave a Comment

Q. What, if any, is the impact on pension contributions from the budget announcement yesterday? - question submitted by Chris, Dublin 6w

A. The main news from yesterday’s budget regarding personal pensions is that there is really no news at all. Brian Lenihan, Minister for Finance has left legislation relating to personal pensions unchanged for now.

However he did strongly indicate that two areas in particular would change in the not too distant future:

A new rate of tax relief for personal pension contributions will be implemented, likely to be circa. 30%.
A limit of €200,000 will be introduced for tax-free lump sums on draw down of pension policies.

While both these proposed changes may be seen as attacking the super rich and their multi-million euro pension funds there is a significant argument that this will also discourage us “middle-income” earners from funding for our future retirement.

Economist Moore McDowell criticised both these proposals in a recent report. McDowell’s arguments against the proposals are that:

Contrary to common belief, the current tax relief’s encourage middle income earners to save for their pension much more than higher income earners
The proposed reforms will run counter to EU policy on tax relief for pensions
Critics of the current system are using flawed arguments
Changes will discourage saving for pensions

McDowell warns that the move to a single rate of tax relief on pensions (30%) will result in a tax structure which discourages saving for pensions and which will ultimately work against the stated policy goals of the State to increase the level of provision people make for themselves.

That strategy may be okay for the time-being with the State Pension remaining untouched yesterday. But Ireland has an ageing population, the pension “time bomb” is ticking and the Government have used the National Pensions Fund to bail out the banks.

So perhaps Mr. Lenihan should be giving us greater encouragement to fund for retirement rather than proposing to take away two of the main incentives?

- Niall O’Higgins

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Cars and Floods Don’t Mix

Published December 2, 2009 Ask the Experts Leave a Comment

So, with half the country under water, what is the best advice when faced with driving through flood water?

The answer is fairly straight forward…. don’t do it!

There are so many things that can go wrong, it should only be done where the risks are known to be low or where an absolute necessity.

Consider this, many exhausts are merely 8-9 inches off the ground, a reduction in revs will allow water ingress and damage. A hot turbo charger which is suddenly cooled with water may crack immediately. Air intakes are increasingly being located lower down on engines and particularly on diesels.

A diesel engine doesn’t require electrics to operate and can operate completely submerged once exhaust exit and air intakes are above water, this is true and based upon this there is a myth that diesels are safer to drive in a flood. However, unless your diesel has a snorkel fitted it is just as vulnerable.

Never enter water if you cannot:

See the exit point of the water clearly
Get to the exit point of the water without having to stop
Determine clearly the height of the water using the kerbs, footpath or items at the edge of the road such as a fence
Be sure there is no current or flow in the water
Enter the water slowly in a steady controlled manner, 1^st gear and don’t let the revs die

Remember, if your car gets stuck its not just about you, you will not only damage your car, you will also block the road for emergency vehicles.

Cars and floods don’t mix, never risk it unless its Shallow, Short and you’re Sure.

- Michael Whelehan

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