Government to Introduce the graduated property tax early

Following hot on the heals of the December 7th budget, the government (small g) has decided to bring forward plans for a graduated property tax to be introduced in 2013, a year earlier then the EU/IMF bailout decreed.
Its likely to be based upon your house value, and it could mean that the €100 property tax in 2012 could grow by 30 times that amount for certain householders:

According to the Irish Times:

Under the commission’s proposed scheme a charge of €188 would be paid on houses valued at up to €150,000; €563 on houses between €150,000 and €300,000; €938 on houses up to €450,000; €1,313 on houses valued at up to €600,000; €1,699 on houses up to €750,000; €2,188 on houses valued at up to €1 million; €3,125 on houses up to €1.5 million and 0.25 per cent of the valuation on houses over that.

FS

Market Emotions Cycle

Save Money...buy a classic car!

What is a 'Classic' car? According to the revenue, its a car that was registered for the first time over thirty years ago.

What are the benefits?
1. Car tax of only €48 per year
2. No Vehicle registration tax (VRT) when you import a classic car
3. No NCT requirements for all cars registered before January 1st 1980
4. Cheap Insurance (there are some restrictions on usage), certain brokers specialise in this sort of insurance.

Irish prices among EU's highest

Written By Olivia Kelly in today's Irish Times:
http://www.irishtimes.com/newspaper/breaking/2011/0913/breaking28.html

Irish consumers are still paying almost 20 per cent more than the European average for goods and services, despite a drop in inflation, according to the latest figures from Central Statistics Office (CSO).
The exchequer deficit remained the highest of any EU member state in 2010 according to the Measuring Ireland’s Progress 2010 report published today.

Consumer prices fell in 2010 but remained high by EU standards. Ireland was the fifth most expensive EU state in 2010, after Denmark, Finland, Luxembourg and Sweden, with prices 18 per cent above the EU average.

The State has remained in recession for the third year in a row with a public balance deficit of 32.4 per cent of GDP, the largest by far of any EU member state. Government debt increased substantially to 96.2 per cent of GDP in 2010, the fourth highest debt/GDP ratio in the EU, having been 25 per cent only three years previously.
Despite this Ireland still had the joint third highest GDP per capita in the EU at 25 per cent above the EU average.

The employment rate at 58.9 per cent was below the EU average and the unemployment rate was the sixth highest in the EU.

The number of homes built in 2010 was 14,600, back to the level it was at in 1970 and down from a peak of almost 90,000 in 2006.

Credit Union Lending Restricted

The Registrar of Credit Unions (the part of the Central Bank that looks after Credit Unions) has imposed harsh new lending restrictions on 7 out of 10 credit unions countrywide.

At a time when credit is not flowing from the banks, the Credit Union network was seen a place where a good savings record meant that one could get a small loan with relative ease and your circumstances would be considered on a personal, local basis, not by a computer in 'Head Office' deciding weather you were a good bet or not. In fact 70,000 new members have joined Credit Unions over the last two years as the public's trust in traditional banks has reached an all time low.

Credit unions have been hit hard over the last few years, they have suffered poor investment returns and a large increase in people falling behind on their loan payments, but ironically enough they are desperate to lend out money at a time when most banks will reject all but the most Gilt Edged application's. Most credit unions have lending of below 50% of the amount that they hold in savings, some banks have lent out 160% of savings. It could be argued that if the banks managed themselves nearly as carefully as most local Credit Unions, we would not find ourselves in the current financial crisis.

They have been restricted in the amount that they can lend in a month, or the amount that can be lent to any individual member. Anecdotally people are unable to go back to College this month as students parents are unable to raise the €2000 registration fee despite impeccable borrowing records.

Unfortunately the only people who are likely to gain out if this are the illegal money lenders with their punitive rates of interest and questionable collection methods.

FS

New 2% Insurance Levy announced

The Minister for Finance published a bill today which will result in higher insurance premiums for all of us, to pay for Quinn Insurance.

A levy of 2% on all non life and non health insurance policies will be introduced before year end. This will affect Car, Home,Professional Indemnity and Travel insurance (any many more beside).

Quinn estimate that they will need to receive €600m from the State run 'Insurance Compensation Fund' to meet their solvency requirements.......the problem is that this fund only currently holds €40m.

The levy is estimated to bring in €65m annually. When you consider that we have already bailed out the banks into the tens of billions, i don't know why a 'paltry' sum like €600m couldn't be found by another method. Ultimately we are all paying for one mans massive gamble on Anglo Irish share's, why not lump it into the debt we have for the banks rather than further hurt people by levying things that we are obliged to purchase.

FS

ECB Keep rates steady

At yesterdays monthly ECB meeting they have decided, unsurprisingly, to keep interest rates steady at 1.5%.

What is making the news however is that it is highly anticipated that we are in for at least two 0.25% reductions over the next six months, starting as early as November, making for a very happy Christmas.

The markets would like the reductions to come quicker than that but it is understood that they will remain unchanged until JC Trichet steps down next month, sparing him the embarrassment of having to make good his epic blunder of two rate rises this year, further damaging Europe's hopes of some form of growth.

FS

Round-Up of the week

This week has seen a lot of talk about mortgages and debt relief, but very little concrete information I'm afraid. The Government and Central bank has ruled out widespread debt write offs.

You might remember back during the election campaign, Fine Gael promised a large increase in the mortgage interest relief for people who bought their first home between 2004 and 2008? Well it seems that that promise was for election purposes only. We are to wait until the end of the month to hear the report of a group of experts who will recommend what steps should be taken to help those in arrears/'the negative equity generation'.

The stories doing the rounds include; Banks taking a equity stake in your home in exchange for a reduction in your mortgage, mortgages being written off and renting your house from the Government and the introduction of intergenerational mortgages.

The Irish Independant have reported that some lending institutions are writing off debts or allowing people to settle debts for less than what is outstanding. This is being denied by the relevant institutions who very understandably want to avoid the potential for individual customers to take advantage of the situation, this is also known as 'Moral Hazard'.

KBC has increased its standard variable mortgage rate by 0.25% to 4.45%.

Bord Gais has got the approval for its 22% increase in Gas prices from the regulator, the ESB reacted by confirming it would do the exact same thing for its customers.

The number out of work increased by 1600 over the last month, a trend we had hoped that arrested itself some time ago.

The Government tax take figures have shown that they are collecting more then they had budgeted for, which is good news. The amount of VAT collected remains below target which just shows the lack of consumer sentiment out there.

FS

ESB increase electricity prices by 12%

If your starting to get Deja Vu your not the only one. Like a set of Dominoes, the ESB has announced that its electricity prices will rise by 12% from October 1st, just weeks after Airtricity and Bord Gais did the same.

So the idea of opening up the Electricity and Gas markets to competition simply means that we get to hear the same press statement by three companies instead of just one.

This cartel is so cosy, and Irish, it give you a warm feeling inside.....unless they have already cut off your heat and light.

FS

Michael Noonan to outline three years of cuts in October

The Sunday Business Post is reporting that the minister for finance will outline the next three years of budget cuts and tax increases this October as part of a pre budget 'assessment'.

While it will be unpalatable to listen to no doubt, it will be a positive for tax payers and the markets alike as it will give people some measure of certainty going forward. Consumer confidence has been hit hard over the last 4 years with people being afraid to spend as they didn't know what burdens the next budget might hoist on them. We are well used to ministers refusing to answer what future budgets might hold, simply saying that 'all shall be revealed' on budget day. This policy of silence was an insult to tax payers and basic principles of democracy.

While we never want to take a reduction to our income, if we at least know what we are facing, we can cut our cloth accordingly. Hopefully the policy of 'Glasnost' will feed through to all aspects of our governance.

FS

EBS increases its Standard Variable rate by 0.25%

EBS will increase its standard variable interest rate by 0.25% in October. This will bring their rate up to 4.93%

They blame the increased cost of borrowing for the building society.

FS

Starting a family? Plan the financial side in advance

Itsyourmoney.ie have put together a great guide and budgeting tool to allow you plan the costs of any new arrivals. Unfortunately there is no plan you can put in place to ensure you get your eight hours every night!

http://www.itsyourmoney.ie/iym/children

FS

Mortgage Lending down 52%

Figures released by the Irish Bankers Federation show that the total value of mortgage lending by banks has dropped 52% in the last quarter compared to the same quarter of 2010.

First Time Buyers made up 42% of borrowing with lending for investment property at a paltry 4% of the market.

The average new residential mortgage now stands at just €200,000, the lowest level since 2005.

We are in a bit of a chicken and egg situation at the moment, if the banks wont lend to good buyers, property prices will continue to fall which will mean that the banks become even more reluctant to lend!

FS

Cards overtake cash for the first time

According to the Irish Payment Services Organisation we withdrew €3 billion less from ATM's last year.

The total amount of cash withdrawals amounted to €22.3bn compared to card based (credit/debit card) transactions of €22.8bn. This is the first time card transactions outstripped cash transactions. This is a positive sign, Ireland have long been the most cash reliant society in Europe, finally we are breaking free and embracing debit cards and online banking transactions. These methods of payment allow us to budget easier as we can monitor our transactions and resist some of the impulse purchases we all do when we have cash burning a hole in our pockets.

FS

Airtricity announces Gas and Electricity price increases

Airtrcity has followed Bord Gais and announced prices rises from September 1st. Gas unit prices will rise by 21% and Electricity by 12%.

They blame the wholesale price of energy which has dramatically increased over the last year.

No word yet from the ESB but it seems likely that they will be following the price rises of its competitors in short order.

Keep an eye on www.bonkers.ie if you are thinking about making a switch in the coming days.

FS

'Springboard' at Dublin Business School

DBS (in conjunction with the Higher education authority) are giving access to a number of courses for free to the unemployed, information can be found here.

FS

MBNA to close its Irish Credit Card Operation

Bank of America today announced that it would be exiting the UK and Irish credit card market. The future of its UK and Irish loan book of $19 billion and its 4000 staff is uncertain.

More when its announced.

FS

Bank of Ireland increase interest rates

Bank of Ireland have announced that they will be increasing the interest rate on their standard variable mortgage's by 0.5%. They did not increase their rates after the ECB rate hikes in April and July but have announced that they can no longer afford to absorb the cost of providing the lending facilities. Tracker mortgage customers rate would have automatically risen in line with the ECB rate. A increase of 0.5% adds €31 to the monthly repayment for every €100,000 owed.

Interest rates on overdraft facilities, personal and business loans will also increase by the end of the month.

In what could be positive news for mortgage holders, experts are now not only expecting the ECB to keep interest rates steady well into 2012, they are actually tipping that there could be a rate reduction on the cards. This is due to the fact that sluggish growth rates have meant that the risk of high inflation in the Eurozone has abated somewhat.

FS

Best value i Phone contracts

Over the last couple of years you cannot escape the fact that it seems every second person is tapping away at the latest Apple gadget. Now i cant recommend the i phone either way, people far more qualified then myself are discussing the pluses and negatives of it right now on some other blog, but  it does make sense to ensure that you are getting the best value contract that suits your needs.

When the i phone was originally launched in Ireland it was only available on the O2 network. A few years (and 4 i phone iterations later) on it is available from Vodafone, Three, Meteor and E mobile networks. This is great for choice but it also means there is a bewildering amount of price plans and options available.

I found this handy price comparison which should make it a bit easier to make your decision should you decide to take the plunge.
i phone plans

FS

Make sure you are receiving your Tax relief

While most property related tax reliefs have been abolished over the last few budgets, a number still remain. Its important to take some time to make sure you are aware of what qualifies for relief.

Some of these reliefs are available to be claimed back at the end of the year and some are TRS (Tax relief at source).

• Pension contributions
• Income protection policies
• Mortgage interest relief
• Rent relief
• Private medical insurance policies
• Medical expenses
• Service charges (Bins etc)
• Trade Union Subscriptions (up to 01/01/2011)
• Tuition Fees
• Interest relief (Unsecured home improvement loans)
• Rent a room scheme
• Childcare services (in your own home, up to €15k)

Details on all the current reliefs are available on the Revenue website.
FS

Recession 2, the sequel?

Stock markets have fallen to their lowest level since August 2009, the price of gold is booming and the talk of 'double dip' recession is on the lips of every media minded economist. So whats going on, we thought this was all behind us?

In the recent days:

• Rating agency Standard & Poor's have downgraded the US credit rating from AAA+ to AAA, the first time America has dropped from the top credit rating since 1941. They site the reason of the possibility that the US could re-entre recssion in the coming months. They were also less than inpressed on the political stalemate and point scoring between Reuplican's and Democrat's during their recent debt ceiling negotiations.
• China is taking the opportunity to criticise the US economy as they try to get the Yuan named as the new global reserve currency. Seeing as China holds one Trillion dollers of US debt, what they have to say carries some weight. 
• The cost for Italy and Spain to borrow money by selling bonds on the international market went up past 6%, this is unsustainable. The EU began buying the bonds of the two countries today, this has reduced the cost somwhat but is this a solution or just a sticking plaster? Spain and Italy's economies are far to big to be bailed out. The ECB will have to act decisvly if the Euro is to remain in place.
• Investors are fleeing the stock markets in their droves, the Irish ISEQ index dropped 4.4%, the French and German indices dropped 4.7% and 5% respectively today alone. This is having a major effect on pension funds and investors who are exposed to the stock market directly or through life insurance companies investment funds.
• There is a flight to quality, Gold is seen as a safe haven during market turmoil, this has increased the price to €1700 an ounce.
• In Ireland the tax take is 1% up on expectations, thats good right? Well yes and no, the increase is due to corporation tax, exporting multinationals based in Ireland are booming . VAT take (a sign of consumer confidence) is low and getting lower. Expect to see VAT figures drop dramatically in the coming weeks, now that the scrappage deal is finished.
• The live register figures indicated a further 1500 people out f work in the last month.
• Morgan Kelly, UCD economist thinks that property prices still have some way to fall and this will mean that by 2015, Ireland will have a national debt for betweem €240-250 billion.

Its not all doom and gloom though, the cost of oil has dropped in the last few days, and due to the recent Erozone troubles we can fairly safey say that there will be no interest rates hikes coming from Frankfurt untill 2012 at the earliest.

FS

Motoring costs rise at twice the rate of inflation

The AA today reported that the cost of motoring has risen by 5.8% in the last twelve months.
The bulk of this is made up by the rise in fuel prices.

According to the report  ''It now costs €11,817 to run a small family car in the 'Band C' tax category (typical engine size of 1251 – 1500cc) for a year; up by €646 on the figure for 2010.''

The full report is available here.

Some of the costs can be offset by driving more conservativly, click here for tips on reducing your fuel usage: http://irishmoneysavingtips.blogspot.com/2011/05/efficient-driving.html

FS

World Collapse Explained in 3 Minutes

Some of their figures are somewhat suspect (Ireland does not owe 800 billion!) but it does make a good point.

FS

'Home Payments' closes its doors

Home Payments Ltd has stopped trading. They provided budgeting and bill pay service since 1963.

Customers would use them to help manage their money and forward on payments for bills, they also provided savings services. The company stated that the fall in property value had badly affected properties it invested in and they were taking this step to protect their customers deposits.

The National Consumer Agency has urged their customers to cancel any direct debits they had with the company. They also took the opportunity to call for the regulation of the private budgeting industry.

I spoke about this back in May:

For a lot of people however they may feel overwhelmed with their situation, they don't even know where to start to put themselves on the path to recovery. Luckily there is an agency which can help you, the Money Advice and Budgeting Service will help you take control again. They will budget your money, work out a payment plan for your debts/utility bills and there is no cost involved.

Contact them http://www.mabs.ie/ and they will schedule a meeting for you. As you can imagine they are extraordinarily busy at the moment and you may need to wait a few weeks but it will be worth it. There are a number of private budgeting services who promise to renegotiate your debt but please tread carefully, they do charge fees.

FS

Saving and Investing for Life eBook

Permanent TSB has published a free guide to saving and investing. This can be viewed online or you can ring them and they will send out a hard copy. Naturally it will slant towards their own products but it does provide some good practical advice.

Click below to have a look.

https://www.permanenttsb.ie/whatweoffer/savingsandinvesting/saving-and-investing-for-life/saving-and-investing-for-life-ebook/
FS

ECB keep rates steady at 1.5%

This months ECB meeting in Frankfurt has kept the main interest rate steady at 1.5% which will be welcomed by everyone with a mortgage, and cursed by people with money on deposit!

The growing concern over the borrowing costs of Spain and Italy and sluggish growth figures worldwide have allowed them to bypass their inflation phobia for a time. The ECB have recommenced their controversial policy of buying Eurozone member states bonds in an effort to reduce yields which have risen to unsustainable levels for both Spain and Italy, whose economies are literally 'too big to fail'.

The EU commission president have admitted that the re negotiated bailout deals for Greece, Ireland etc did not go far enough to provide the stability that the bond market have been seeking, he urged governments to go further in providing funding other troubled countries, this idea was swiftly rebuffed by EU economic superpowers Germany and the Netherlands.

FS 100th Post :)

€3 Travel tax to stay in place.....for the time being at least

Budget 2011 reduced the travel tax from €10 to €3 in reaction to the constant braying of the airline industry (one in particular.....you know who i mean) that the tax was hurting tourism and sending people elsewhere.

The new Government has always said that they would remove the tax altogether if the airlines reinstated axed routes and generally drove more tourists to our shores. 9 months on and Leo 'the Lion' Varadkar has called their bluff. The tax raises €30 million per annum and he is unlikely to remove it until the airlines come good. Ryanair have recently announced that they will be cutting routes during the winter off season, this is not what the Department of Transport wanted to hear.

In the mean time Leo will be taking matters into his own hands, half of the €30m haul will be spent on advertising Ireland overseas.

FS

Children are being priced out of the market when it comes to education: Barnardos

In a report released today, Barnardos have found that lack of access to back to school allowances and a rise in the general back to school costs are affecting families countrywide.

The survey of 500 people show the average costs involved:
* School specific tracksuits - €35
* School specific jumpers - €40-60
* School specific coats or blazers – over €100
* School shoes - €50-70
* Books for junior infants - €50-100
* First year secondary school student’s books - €250
* Voluntary contributions – €70-100
* Additional contributions sought by schools for photocopying, stationery etc. - €40-50
* Extra curricular activities such as swimming - €75-100
* Transport for primary school - €50 (up to a maximum of €110 per family)
* Transport for secondary school - €350 (up to a maximum of €650 per family)

The full report can be found here.

FS

'Dealz'

Poundland (which describes itself as Europe's biggest discount retailer) is set to open up 6 stores in the Republic over the next year, with a potential to raise that figure up to 50.

In the UK the retailer (as the name might suggest) sells everything for a pound. They are going for a slightly different strategy here, by naming the stores 'Dealz', they can be somewhat flexible in their pricing.

While the announcement of 180 new jobs is great news in anybodies book, it serves to illustrate how far we have fallen, compare it to 2008's announcement of a John Lewis 'flag ship' store on O'Connell street.

FS

Pet Insurance

Pet Insurance is a relatively new product to the Irish market, it aims to insure you against expensive vet bills up to an agreed limit during the year. Depending on the level of cover and company you choose it may also provide a lump sum in the event of accidental death and if your pet goes missing it can cover you for the cost of printing up the 'missing' posters.

While the number of providers in the market is still small, it still pays to shop around. http://www.petinsuranceireland.com/ is a good price comparison site and also provides reviews of the different providers.

FS

Aviva announces a 9.5% price increase

Aviva health insurance customers who are renewing their policies after September will face a increase in premium.
A 9.5% increase in the most popular scheme ( Level 2 Hospital plan) was announced today. This is the second increase this year after prices rose by 14% already on March.
Where the health insurance market is going is still somewhat up in the air. Months on from the election, details of the governments mooted universal health insurance proposal are few and far between.
FS

Cost of borrowing to rise at AIB

AIB's Executive Chairman David Hodgkinson was speaking at the McGill summer school in Glenties, Donegal yesterday and he confirmed that banks have been 'misspricing' risk, ie they will need to increase the cost of lending to ensure profitability and stability in the bank for the future.

He acknowledged that this concept would prove controversial in light of the billions of Euro the tax payer has injected into this pillar bank in the last few years.

“While this is a very unpopular concept given the amount of taxpayers’ money that we have received – it is nevertheless simply not possible to build a sustainable future for any bank that is lending funds without getting a return.”

FS

Pumps.ie on the move

I mentioned www.pumps.ie in a previous post, this publicly updated site allows you to compare fuel prices to ensure that you are getting the best value for money.

They now offer apps for both i Phone and Android platforms, you can save all of your local stations to it and compare the prices while on the move.

The site also offers expert insight into the reasons for the ever changing pricing environment and where prices will be heading in the coming weeks. The most recent price forecast is available here.

FS

NAMA's proposed mortgage scheme

NAMA (who today announced a €1bn loss) has announced a somewhat innovative scheme get people buying property again.

It attempts to de-risk the process of buying property and reduce the worries of negative equity for those buyers in the future.

They mention that they hope that the scheme will get the property market moving again, but in reality unless this scheme comes available for non NAMA properties too, all it will do is help shift some of the agencies massive portfolio of property.
The nuts and bolts of the proposal is described here by the Irish Times:

How the scheme would work
Nama would try to sell a house or apartment linked to one of its loans by putting it on the market for €200,000, for example. The purchaser would have to have a €20,000 deposit and would then apply for a mortgage from one of the two “pillar” banks, Bank of Ireland or Allied Irish Banks.
To encourage the buyer to complete the sale and to ease fears about negative equity – where the loan is worth more than the value of the property – Nama would agree to defer the payment of 20 per cent of the value of the property – in this case, €40,000.
The bank then approves the buyer for a mortgage of €180,000 and the buyer makes the repayment on this loan. If after five years the property is still valued at €200,000 or more, then Nama will collect the outstanding €40,000 from the bank. The repayments do not change.
If the property has fallen in value to say €160,000 then Nama would waive the outstanding €40,000 from the purchase price agreed five years earlier. As a result, the home owner would be ahead on their repayments and avoids negative equity as the mortgage is based on €140,000 rather than the original €180,000.
As a result, the bank and the home owner reschedule the remaining repayments around a mortgage of €140,000.

FS

'No guarantee' charge to stay at €100

Minister for the Environment Phil Hogan today admitted that the household charge (announced only 24 hours ago) could not be guaranteed to remain at €100 for the next two years. He said that it was up to the minister for finance to review the charge in the run up to budget 2013. The idea is that the flat rate charge will be replaced by metered water charges and a valuation based property tax in 2014.

€160m will be collected by this charge next year to help pay for local authority services. There will be exemptions but they are few, they include:
-People in receipt of mortgage interest supplement
-People living in local authority housing
-People living in 'Ghost Estates'

Pensioners and people on social welfare will be liable to pay it, as will people who already pay a second home tax. The government has tried to sweeten the bitter pill by saying that it equates to 'only' €2 per week. That's all very well to say, its a drop in the ocean for the wealthy but makes up a massive 1% of your income should you be a single person reliant on social welfare.

Joe Higgins and the other members of the United left Alliance have announced that they will organise a civil disobedience campaign against the tax, encouraging non payment.

Roll on a 'Autumn' of discontent.

FS

Property Prices Continue Decline

CSO figures released today show a continued decline in property prices with values down 2.1% since May and 12.9% over the last twelve months. Dublin prices declined 2.4% last month.

http://cso.ie/releasespublications/documents/prices/current/rppi.pdf

FS

Household charge set at €100

Minister for the Environment Phil Hogan has announced a new temporary “household charge” of €100 per year.
The new tax, viewed as a forerunner to a property tax and a water charge, will be levied on the estimated 1.8 million householders in the State, potentially raising €160 million in revenue in 2012.
Commercial properties and social housing as well as charity-run and sheltered homes are among properties exempt from the tariff. Younger people struggling to make home loan repayments, who qualify under the mortgage interest supplement scheme, can also qualify for a waiver.
The charge, which was agreed by Cabinet this morning, will be introduced in January next year, with householders given three months to pay up. Late payment penalties have been set at €10 a month.
Mr Hogan said he understood people are already suffering levies, charges and interest rate hikes, but he insisted he had no other option. “I’d prefer not to be introducing any charges but I’m obliged because we have ceded our economic sovereignty as part of the EU/IMF agreement, to bring in a property tax,” he said.
Admitting the tax could be fairer, he said it was a temporary two-year measure ahead of a property tax based on a value in 2014, which would be a “much fairer system”.
At a briefing in Government Buildings, the Minister said the new levy was an interim measure ahead of a full property tax, based on a property valuation system, and was separate from planned water charges. The water tax is to be introduced in 2014.
http://www.irishtimes.com/newspaper/breaking/2011/0726/breaking19.html

Feedback Welcomed

I'm always eager to hear any feedback you may have, is there something i should look at more/less?

Please leave a comment on any of the posts and have your say!

Don't forget you can sign up to receive all new posts via email or RSS feeds on the right sidebar, you can also forward any stories you want to others using the email symbol below each post.

financialsenseblog@gmail.com
FS

Insurance and Social welfare fraud is a crime

It might be a obvious thing to say but:

Insurance claims and social welfare fraud is a crime, not a victimless one either.

Social welfare and insurance fraud costs the country hundreds of millions of Euro every year. That means increased taxes and increased premium for all of us. Hopefully the days of the 'cute hoor' society is over, we can ill afford to continue paying the way of those who look to take advantage of the systems in place that are there to support people in times of hardship.

To this end you will find below links for Insurance Confidential (run by the Irish Insurance Federation) and contact details for the department of social welfare. Reporting potential fraud is every ones responsibility, and you can can do so anonymously if you choose.

Stories like this show how grand a scale some of this fraud is. Joan Burton, Minister for social protection is making plenty of positive noises of a crackdown by her department in the coming months and years, long overdue some would say.

http://www.insuranceconfidential.ie/
http://www.welfare.ie/en/contactus/Pages/reportfraud.aspx

FS

Two more mass property auctions this Autumn

Following on from the success of the two previous mass property auctions in April and earlier this month, Allsops (British Auctioneer) and Knight Frank have announced a new round of auctions.

Allsops will put over 100 properties under the hammer in September with Knight Frank following this up with 30/40 properties in October.

Memorably people Q'd around the block to get into Aprils auction in the Shelbourne hotel on the same day as the IMF were here piecing together our bailout.

Both of Allsops auctions have proved to be a great success, with over 90% of the properties being sold on the day. Auctions are efficient ways of selling properties as once a price is agreed, contracts are signed on the day itself. This means that the people bidding either have their mortgage in place in advance, or which is far more likely these days, they have the cash in hand (not literally!).

So where have all these cash buyers been hiding? The property market is depressed and the level of transactions are only a fraction of what they were just 5 short years ago. The purchasers are bargain hunters

The properties being sold are classified as 'distressed assets', they in the main represent repossessed properties that the bank are trying to off load. Banks don't want these properties sitting on their balance sheets and are happy to take whatever they can get, so they set the reserve prices very low.

It has been said that these auctions are a positive thing as they will help us finally find a floor to the property price slide. I disagree. As these are being bought by people with cash and not by your average house hunter looking for a family home, the auctions do not really represent what could be considered normal market conditions. Until the banks reenter the mortgage market in a meaningful way we will not be able to tell how far prices have truly fallen.

FS

'The Economiser'

'The Economiser' is a programme offered by the National Consumer agency which allows you to examine your spend on Groceries, TV/Telecoms, Mobiles, Motoring and Energy. By simply asnwering some questions about your spending on these categories, the programme will help you save money.Well worth a look

http://www.economiser.ie/

FS

Rate cut on Irish Bailout could save €1bn

FS

Cigarettes and Alcohol

Recent Eurostat figures showed that Irish prices for Tobacco and Alcohol are the highest in the EU, approximately 170% of the EU average.

Naturally when your abroad your will want to stock up on these high ticket items, but to prevent yourself from falling afoul of Customs and Excise you need to limit yourself to the following:

From the EU
800 Cigarettes                             10lt Spirits
200 Cigars                                   20lt port, sherry, some liqueurs
1kg Tobacco                                                 (not exceeding 22% alcohol)
                                                     90lt wine
                                                     110lt beer

From Non EU countries
200 Cigarette                                1lt Spirits
50 Cigars                                      2lt port, sherry, some liqueurs
250g Tobacco                                                 (not exceeding 22% alcohol)
                                                      4lt wine
                                                      16lt beer

Enjoy in good health!

FS

European Health Insurance Card

If your planning a trip within the EU remember to carry a 'European Health Insurance Card', this will give you access to the public health service in any EU country.

The card is free and provided by the HSE.

Visit www.ehic.ie for further details.

FS

Property dilemma - Sell, rent or buy

If you bought your home in the last few years, you may now find yourself in negative equity. If you have no plans to move and you can afford your mortgage repayments, then negative equity shouldn’t be an immediate problem for you.
However, if you are looking to move up the property ladder (for example if you’re planning on having children or moving in together, or you need to move for work reasons) it can become a problem because you may have to sell your home for less than you owe.
So, what are your options?
Stay put and save
If you can put off moving for a little while and you can afford to do it, then you could stay put and try to set aside some savings in a regular savings account to cover the shortfall if you do decide to sell. Or, if you can afford it, another option is to overpay your mortgage. This will reduce the amount you owe on your mortgage, but may only be an option for you if you have a variable rate mortgage (this includes tracker rates). With a fixed rate mortgage, you can’t usually make additional payments without penalty.
Try to sell your home and buy another
You could also consider selling your property at a loss. However, you will need to make up the shortfall between what you owe on your mortgage and the proceeds you will make from selling. So, unless you have savings put aside, this will not be an option. And, if you do have savings, bear in mind that covering the shortfall will eat into the deposit that you would use to buy a new property.
Get more information on what to consider
Rent out your property and buy again
Instead of selling, another option is to rent out your property and buy a new one. Of course, whether this is an option or not depends on:

• how much rent you could get and whether it would cover the current mortgage and other expenses
• whether you will be able to get a second mortgage and
• whether you have a deposit to buy a new property

Get more information on what to consider
Rent out your property and rent another
If you cannot stay put, maybe because of a growing family or work, but selling is not an option, you could also consider renting out your own property and renting a bigger home or one in a more convenient location. Again, you’ll need to consider whether you can get enough rental income to cover your mortgage and allow you to pay monthly rent on another property.
Get more information on what to consider

Taken from:

http://www.itsyourmoney.ie/index.jsp?p=100&n=569&a=1463

FS

New Road Tolls Mooted

The department of transport and the National Roads Authority (NRA) have confirmed that they are looking at new revenue raising measures which means new tolls on previously toll free roads.

Why do this? It may have something to do with the way a lot of our new roads were built.

Picture this, the Government would like to be able to tell the electorate about all the shiny new roads they are building but they dont really feel like paying to build them. They decide to put the road building contract to tender for private companies to build and maintain the new roads. In return we allow private companies to toll these roads.

The private companies are no dummies, they want to ensure that they are going to make money. The Government tell the companies that they reckon x thousand people will use their toll road each day.....and this is the kicker......... if the actual amount of road usage is below this figure, the Government will pay the shortfall. The numbers of road users on the new motorway sections appear to be dismal in comparison to forecast.

Currently we are paying HUNDREDS of millions of Euro each year to pay for the incompetence of the planners, directly into the pockets of private companies. This being Ireland, no one seems to be ultimatly responsible. So similarly to the bond investors (who we are bending over backwards to payback) the private company essentially has taken no risk involved when building the roads.

 This means that the new road costs only a fraction of the price (to the Irish People) compared to if the Government simply built it, but it appears we will now end up spending multiples of the supposed 'savings' over the life of the road. Historically we have been useless at the concept of tolled roads, the 20 year long debacle of the toll bridge at the West Link in Dublin is a perfect example

So how to pay for all these losses? Naturally it will be to lean on the already ravaged citizens.

Proposed new Tolls:
-All sections of the M50 will incur a charge
-N9 Carlow bypass
-Dundalk bypass
-N20 at Croom
-N18 Ennis bypass
-Jack Lynch Tunnel
-N11 Arklow bypass

FS

AIB to roll out Visa Debit cards in 2012

AIB announced that it too will be dispensing the Visa Debit card card in 2012, this was almost inevitable as AIB was unlikely to be the sole bank offering Laser as a payment method (and being the only bank paying for the administration of the scheme).

http://www.irishtimes.com/newspaper/breaking/2011/0718/breaking26.html

Earn some extra money being a Extra

Movieextras.ie is the premier supplier of extras (supporting artists if you wish to be snooty about it!) to Irish and foreign TV and movie productions in Ireland. You can earn some good money should you be cast. This isn't just for the beautiful people, work is available for all shapes, sizes and ages.

The idea works like this, you register with them, the cost is around €100 a year and for that you and your details is available to be offered work by any production companies that happen to be shooting, before you know it you could wandering around in full Tudor costume or having a pint in McCoys.

The work wont always be glamorous, the day can be long and you need to be available at short notice but it can be handy way to make some extra cash, and who isn't interested in that?

They are having a casting day today, the 17th July (sorry for the short notice!) in the Westbury hotel, Dublin, but you can register at anytime, details are found on: http://www.movieextras.ie/index.html

FS

Statesavings.ie

The National Treasury Management Agency (NTMA) is responsible for borrowing money on Ireland's behalf. With the international markets closed to us till Late 2013 you might legitimately ask what they are doing with themselves in the Treasury Building, Dublin 4,these days. There is a new focus on attracting investment from the Irish people through their rang of bonds and savings products. The benefits of saving with the Irish State is that your money enjoys a full Government guarantee and returns are not subject to DIRT tax. They also run the prize bond scheme.

For further information visit your local post office or go to: http://www.statesavings.ie/Pages/default.aspx

FS

Ireland's falling household savings rate defies expectations

Interesting article by Dan O'Brien, the Economics Editor of the Times.

http://www.irishtimes.com/newspaper/finance/2011/0715/1224300757511.html

FS

Inflation static at 2.7%

The annual rate of inflation to the end of June has remained static at 2.7% according to the CSO.

Prices actually fell by 0.1% but this was offset by higher interest rates on borrowing.

The national consumer agency yesterday announced that food inflation is running at 5% as the big grocery retailers seem to be more content price matching their competitors than offering real value to their customers. This has hit people hard as grocery shopping is the second largest outgoing for Irish families outside of mortgage payments.

The results may differ next month as experts agree that the ESB and Airtricity will follow Bord Gais and announce increase energy prices in the coming weeks.

FS

Ireland's credit rating cut to Junk status

Moody's credit rating agency yesterday reduced Ireland's credit rating to junk status (Ba1 with a negative outlook) http://www.moodys.com/research/Moodys-downgrades-Ireland-to-Ba1-outlook-remains-negative?lang=en&cy=global&docid=PR_222257

Look back at a earlier post of mine 'Bonds, a beginners guide' for more information on what the credit rating means to us. They claim that it is due to the fact that Ireland will likely need a second bailout as they doubt we will be able to return to the bond market as planned in 2013. Ironically by moving our credit rating to this level we are even less likely to engender confidence from the markets.

Predictably the move has predictably been criticised by the ECB, NTMA, and government. Europe is getting mighty peeved with the ratings agencies who they believe have been less than helpful in ensuring the never ending Euro 'crisis' gets towards a resolution of sorts.

In future we may see a Euro bond, where any Eurozone member state can borrow based on the strength of Europe as a whole and not strictly based on the performance of their own individual economy.

FS

Compare Savings products

Following on from my previous post 'time to lock in your savings' to take advantage of the recent great interest rates i have attached below links to help you compare the different products available on the market. The first one is for regular savings and the second is for lump sum savings.

http://www.itsyourmoney.ie/costcomparisons/cs_tab_regular_savings.htm

http://www.itsyourmoney.ie/costcomparisons/cs_group_lump_sum_deposit.htm

Don't forget that the headline interest rate is not the only thing to pay attention to, ensure that you are aware of the rules regarding access to your money. Some will penalise you for early withdrawals, some wont let you exit the savings at all during the term.

FS

Time to Lock in your savings

Excellent article in today's Irish Times. It suggests that due to a 'normalising' in the banking sector after near Armageddon, the bumper deposit rates may be coming to an end.

http://www.irishtimes.com/newspaper/pricewatch/2011/0711/1224300491656.html

FS

Save money on Toll roads

Like it or not toll roads are here to stay, its the price we are paying for our admittedly improved motorway system. There are 12 toll roads in the country at the moment, the most recent one being the Limerick tunnel opened in 2010.

How you pay for your journey can be varied, there are a number of options, pay online/over the phone after your journey, pay with cash or drive straight through using a toll tag.

Using a tag can be the cheapest and easiest payment method, however there are a number of operators and each will have their own charging structure. Depending on your usage and which tolls you use regularly, some may be more suitable and cost effective compared to others. It pays to do a bit of research.

http://www.tagcompare.ie/

FS

The European Question

Stephen Kinsella, Economics Lecturer in the University of Limerick gives an interesting synopsis of the current situation facing the euro zone and how that can affect investors.

http://www.rabodirect.ie/investments/investor_centre/default.aspx

FS

BOI Customers to receive new 'contactless' Visa Debit Card

Further to my recent post about Debit cards, Bank of Ireland have announced that all of its current laser cards will be replaced in the coming months with a new Visa Debit card. The card will offer all the services you normally receive with your laser but with one small difference, this will have 'contactless' payment capabilities.

Rather than putting your card in the chip and pin device and punching in your pin, this card will allow you to pay for small purchases (under €15) by simply pressing your card against the scanner and going about your business. For security reasons you will be obliged to use the current pin system after a certain number of contactless transactions.

Apart from this (for Ireland) innovation, Visa Debit offers further benefits, it is accepted anywhere a normal Visa credit card can be used. This means it should make spending abroad and buying online should be less painful.

FS

ECB raises interest rates by 0.25%

Can you hear that?.......its the sound of belts being tightened countrywide.

The much tipped increase in interest rates came to pass today, with at least one more to come this year if commentators are to be believed.

The ECB appointed inflation busting superhero JC Trichet again championed the cause of price stability above all else, maintaining that low inflation takes supremacy over and above the need for growth. Appeals for clemency from the peripheral EU countries fell on deaf ears.

He will retire this year but the the incoming Italian ECB chief is cut from the same cloth it seems. In contrast the Bank of England kept its rate steady at 0.50% for the umpteenth month in a row.

The 0.25% increase will cost homeowners on trackers about €15 extra per month per €100k owed.

FS 

Noonan indicates 'difficult' cuts in budget may touch €4bn

http://www.irishtimes.com/newspaper/frontpage/2011/0705/1224300091222.html

FS

Vat reduction

From yesterday the VAT rate on sectors of the economy that are likely to be used by tourists (restaurants, hotels, cinemas, newspapers and other tourism-related activities) has been reduced from 13.5% to 9% in a bid to make us a more attractive destination.

The government has urged this savings to be passed on to the consumer. The scheme will run until December 2012 when it will be reviewed. There is no legal obligation for business to alter their pricing accordingly but Enda Kenny has said that companies will be 'failing Ireland' if they don't.

FS

Debit cards more popular than ever

The Irish Payments Services Organisation (IPOS) announced during the week that the popularity of the Debit card is growing and for the first time ever there are twice as many Debit cards as Credit cards.

This reflects the fact that people are more interested in paying down their debt then getting out there shopping with money they don't have!

Two Debit card types are available in Ireland. Laser cards are supported by BOI/AIB/NIB and the relatively new Visa Debit card has been picked up by Ulster Bank/PTSB. Expect Laser to be phased out over the next three years or so as Visa Debit is far more widely acceptable online/overseas.

As you can only spend what you have in your current account with debit card, this is a form of self imposed austerity that is being practised by the masses....perhaps as penance for our credit card sins during the 'Tiger era'.

FS

Save money on School Books

The school holidays may just have begun for some but that also brings with it the perennial problem of the school book list. The school book system in Ireland does not work. It is run by the publishers for their own benefit.

The catch call of successive ministers for finance that the school book system is out of their control is not only untrue but faintly pathetic. We will have to wait and see if the recent murmur's of progress from Minister Ruairi Quinn bear fruit.

Publishers can create new editions of its books every year, the schools think it must have the most recent edition to ensure compliance with the syllabus and hence add them to the book list. This means that often perfectly good books are effectively useless after the use of one child, preventing passing it on to younger siblings. Without leadership from the Minister and Department, publishers are unlikely to kill the duck that lays the golden eggs.

We only need to look at some of our near European neighbours to see a better and more equitable system in place that we could mimic. The Department of Education bulk buys all the books required by the students, these are distributed to the schools and children for free. At the end of the school year the books are handed back and there is only a charge if the book is lost or damaged. The same book can be used for years as the department will not sanction a new print unless the syllabus changes accordingly.

In the lead up to the election we heard a lot about the creation of a 'new Republic'. This would be a great way to start the change, show that we are a mature country that is run by the people, for the people and stop pandering to the narrow business interests of the publishers.

Until a change takes place you will still need to get those books this year, http://www.schoolbookexchange.ie/ is a resource that brings buyers and sellers of second hand school books together for free and they claim that you can save 66% on the cost of your books.

FS

Employer provided parking tax shelved

The previous Government signalled that they planned to implement a Benefit in Kind (BIK) charge of €200 per annum for employees that take advantage of free parking at their workplace within certain urban areas.

Thankfully the new Government has announced that they will not be implementing the policy.

FS

Cycle to Work Scheme

The Cycle to Work scheme was the brain child of the Greens in the last Government, and so far seems to have been quite a positive policy. It encourages people to start cycling to work with all the inherent pluses to your health, the environment and ease congestion on the roads.

It works like this. You can buy a bike and associated equipment up to the value of €1000 and take advantage of tax relief at your marginal rate of tax (20/41%). Your employer effectively buys the bike and you pay back the amount due (less the tax relief) directly from your wages over the next 12 months.

You are not obliged to actually use the bike to get to work (or ever!) but anything that gets people spending again is to be praised.

 http://www.bikescheme.ie/

FS

Public Transport fare hikes in 2011

Minister for Transport Leo Varadkar announced during the week that due to falling usage, fare hikes and service cuts on our already poor public transport system is due later this year.

This 'Twilight Zone' method of thinking can only be justified in the public sector. In the real world if sales are down you try to attract customers with cheaper prices, better levels of service. Once again this is likely to hit the people who can least afford it.

FS

Are you a loyal ESB customer?

If you like many people resisted the call to make the 'big switch' over the last couple of years and have stayed loyal to the ESB you must have been happy to hear the fanfare surrounding the headline price reductions announced by the ESB as they are now allowed to complete in the market again.

You would imagine your loyalty would be rewarded and all existing customers would move automatically to the new lower tariffs, unfortunately this is not the case, you need to opt in to the new plan. Details are available on https://www.esbelectricireland.ie/switchchange/allPricePlans.htm .

A somewhat sneaky tactic that relies on the ignorance of their existing customers.

FS

Save money on your TV service

Saorview is the new Irish Digital TV service which allows you digital TV and HD channels with no monthly bill. All that is required is the once off purchase of a set top box. The snag is that your basically limited to the RTE and TV3 channels, so if your like watching Alan Sugar telling people they're fired it may not be for you but if your a relatively light TV watcher this could save you hundreds of euro every year by ditching your current provider.

http://www.saorview.ie/

FS

Whats your credit rating?

We have all heard that the different credit rating agencies have downgraded Irelands creditworthiness time and again over the last few years but have you ever wondered what your personal credit rating is?

The Irish Credit Bureau allows you to do this. The reports they prepare can be help full if you plan to apply for credit (or if you wonder why you have been turned down for a loan). There is a fee to access your credit report, currently €6.

See www.icb.ie to apply.

FS

2nd Home Tax for 2011 due now!

Just a reminder to anyone with a rental property or holiday home in Ireland that to avoid penalties, you should pay the annual second home tax (€200) online before June 30th.

Further details from https://www.nppr.ie/

All the proceeds from this tax goes to the county council in the area where the property is. Its not clear if people currently liable for the NPPR tax will also have to pay the local area charge that's being introduced in Budget 2012 (as both go directly to the local council) but chances are that you will be charged both.

FS

Cut your Health Insurance Costs

Health insurance is one of the most expensive insurances available on the market. Most people search for the best quote every year for their car insurance, why don't we shop around for the best value health insurance as well?

You are free to switch between the three main health insurance providers in Ireland and you will not have to serve any waiting period, all pre existing conditions are covered, as long as your cover is continuous. The insurers are obliged to provide the cover and the costs are the same if your 25 or 75, this is due to the 'community rating' system which operates in Ireland.

If you were to cancel your health insurance and try and reinstate it a year later say, you may have to serve a 6 month waiting period for new conditions and 5 years for existing conditions, so it is important to keep cover going if at all possible.

There is a bewildering amount if plans available, speak to your advisor or compare the plans and cover provided on the Health Insurance Authorities (HIA) website http://www.hia.ie/.

The health insurers offer cheaper rates to company schemes then they do to individual members of the public. By law these company rates are available to everyone, this is not something that the companies shout about. There may be a plan which is identical to your own in every way and it may have a different name but can be dramatically cheaper.

Below please see the links to the company scheme details for Aviva, VHI and Quinn Healthcare.

http://www.avivahealth.ie/employers/
http://www.vhi.ie/jsp/employers/healthplans.jsp
http://www.quinn-healthcare.com/for_employers.htm

Remember you are entitled to be quoted for these company plans, make that call and save some money.

FS

PIBA speaks out about banks taking a sneeky peek

Professional Insurance Brokers Association chief executive Diarmuid Kelly has spoken out about some sharp practice by the banks which is said to be 'widespread' at the moment.

Banks are examining their customers direct debits in an attempt to up sell them on their own life assurance and other products.

It seems they will look through the list of customers direct debits and if they notice payments to life assurance companies they will contact them to try and get them to change their cover to their own providers.

While people should regularly ensure that they are getting value for money from the financial products they have, it must be remembered that the banks will only be able to quote customers on products from life companies either owned by the bank, or acting as 'tied agents' to the bank. A independent financial advisor/broker will be able to quote you from a number of life companies, ensuring that you are getting proper advice on the products you choose. Strictly speaking cheapest is not always best, everyones personal needs are different and you should ensure that the  advice you get takes the whole market into account and not just a single life company.

In retort the Irish Banking Federation have advised that the practice is not in breech of the Consumer protection code or data protection legislation.

FS

Cost of living still rising, but at a slower rate.

Figures released by the CSO this morning show that the the consumer price index rose by 0.1 per cent last month. This compares to a 0.4 per cent jump between March and April, and a 0.9 per cent in the previous two months.

The annual rate of inflation now stands at 2.7 per cent - meaning that prices were 2.7 per cent higher last month than they were in May 2010. However, this is lower than the annual inflation rate of 3.2 per cent recorded in April.

Taken From:
http://www.irishtimes.com/newspaper/breaking/2011/0609/breaking19.html

Possible Income Tax hike in Budget 2012?

In another election pledge U turn, Finance Minister Michael Noonan today refused to rule out a rise in Income tax in December's budget. It is to give effect to the pension fund levy and VAT cuts announced in the jobs initiative.

But in the Dail, Minister Noonan appeared to suggest he cannot guarantee no tax hikes in the budget.

Mr Noonan said: "I am not going to rule out any tax initiative, or any tax increase or any tax reduction."

FS

No change in Interest Rates

Today the ECB announced that they will leave the interest rates steady at 1.25%. How ever JC Trichet confirmed that they would exercise "strong vigilance" over inflationary pressures during the next month. In ECB code this means that a rate hike (probably 0.25%) will follow in July.

FS

Some Excellent advice on managing Credit Card Debt

'Its your money.ie' have published some excellent tips on managing your credit card debt. Credit cards will generally be the most expensive form of consumer credit and in general should always be the first debt you should look at paying down.

Please see the below.

http://www.itsyourmoney.ie/iym/creditcarddebt

FS

Water and Property tax saga rumbles on

The honeymoon period is definitely over for the coalition partners, wage agreement abolition, water and property taxes, college fees and pension levies all seem to be bugbears between the two parties. The one thing this is lacking at the moment is detail. We should expect to get some definition in the coming weeks. Either way it means less money in all our pockets.

FS

Save Money on Cruise Holidays

Cruise holidays are the fastest growing sector in the holiday market and its easy to see why. It combines the possibility of lazing by a pool just like a normal resort holiday, with the opportunity to sample some great locations every day, basically its a moving resort.

Air travel is becoming a less and less attractive prospect every year, rising charges and security are putting paid to the romantic notion espoused by Frank Sinatra in 'Come fly with me'. Cruise holidays have picked up where the traditional holidays have left off, and its cheaper then you think.

All inclusive is a concept which may conjure up images of sun burned holiday makers shoveling plates of bad quality food into themselves. The experience on a cruise is somewhat different, you will have the opportunity to have your burger and chips should you wish but you can also sample a fine dining menu every day of the week, if wines are your thing then you will have the opportunity to work your way through a floating wine cellar.

Your food will generally be included, your entertainment is well catered for, all the while you will be treated like royalty. Depending on which cruise line you choose, the only things that you will pay for is alcohol, shore excursions, on board shopping (duty free is exceptional value) and some speciality restaurants which may have a cover charge.

You can avoid the expensive charge for the organised shore exclusions by simply doing some pre cruise research, find out what you want to see and take taxis or local buses. If your ship is stopping at anything more than a rural hamlet, there may be a tourist open top bus which will give you a guided tour at a fraction of the price.

Take your own wine: most lines will allow you bring some alcohol on board with you to drink in your cabin or to enjoy over dinner. You will likely have a fridge and ice in your stateroom. If you bring it to the dining room there may be a cover charge but will still be a lot cheaper than choosing from the wine list.

One aspect of cruising that has the ability to infuriate new cruisers is the idea of gratuities. In Ireland, never known for our love of the 'tip', you will likely pay a little extra if you are in receipt of exceptional service. The cruise culture seems to demand that you pay gratuities automatically, $10/$12 dollars per day per person. Despite what their literature says, the gratuities makes up 90%+ of their staffs salary. In effect the headline price of your cruise would increase dramatically if the lines began paying their staff a fixed and decent salary. This stealth charge can be easily removed. Simply opt out on your first day at the pursers desk and you will not be charged this automatic fee. This frees you up to give tips to your regular waiters/cabin staff at the end of the cruise. This really allows you to recognise the phenomenal quality of care you receive directly.

Last minute offers can provide incredible value to get away, as you can imagine if its two weeks until the ship sets sail and they have 200 cabins to fill you will get a deal. If the ship sails with empty cabins, that's wasted profits for the company.

Contact your tour operator or check online to find the right cruise to meet your attitude.

FS

VHI customers now face €50 fee for switching mid-contract

THE STATE’S largest private health insurer, the VHI, has begun imposing fees on customers who cancel their insurance cover midway through the year.
Since May 1st it has been charging a €50 cancellation fee to those who switch insurers midway through their 12-month contracts, and is also insisting on clawing back from them part of the annual Government levy it pays on their behalf.

From: http://www.irishtimes.com/newspaper/frontpage/2011/0527/1224297854524.html?digest=1

FS

Get in touch

Unfortunatly i wont be able to get any posting done over the next week or so, send an email to finsncialsenseblog@gmail.com if you want me to cover anything on my return or if you have come across any good deals.

Speak soon.

FS

Save money on your heating bills

With a fairly hefty gas increase coming down the lines this Autumn, there are things you can do to reduce the pain, these are just a few simple tips.

• Reduce the number of rooms that are heated...turn the rads off in that dining room that's only used at Christmas!
• Use your timer effectively, no need to have it on for hours before you come home from work, it should be sufficient to set it to come on 30 minutes before you arrive.
• Turn the heat off an hour before bed, the rads will continue to warm your room for a while.
• Turning your thermostat down by 1 degree can save up to 10% on your bills.
• How warm are your rooms? Living rooms should be about 20 degrees and bedrooms are most comfortable at 18 c.
• Close doors in the house, it will help keep the warmth in and prevent heat loss from unheated parts of your home.
• Make sure windows and doors are shut and sealed properly, check for drafts and remedy.
• Close your curtains, this will help retain heat in a room.
• Don't let curtains overhang rads as that will block the heat output.
• If your cold, pop a jumper on!

If your in a a older house you may look at making more drastic changes with insulation which could save you a lot of money over time. Grants are available for insulation, look at Sustainable Energy Ireland for Details: http://www.seai.ie/

PS. Every home that is put up for sale/rent must now have a BER cert (Building Energy Rating). The cert will provide a grade of energy efficiency from A(Best) to G(Worst). Energy efficient homes will be more attractive to potential buyers. This is another reason to look at adequately insulating your home.

FS

UPC Broadband customers getting a welcome boost

UPC definitely has the most attractive broadband product in the Irish market offering up to 100 Mb. There is good news for existing customers this week as many have had their broadband speed upgraded for no extra charge.

Its always good to see companies rewarding loyalty and they should be congratulated on that front.

FS

Foreign phone call charges

Don't ask me how they do it but its possible to call Australia, USA and a lot of other countries for only two cent per minute....from your mobile!

Tesco mobile and others offer these sort of charges, which really begs the question why the same company charges 20 cent for a call WITHIN Ireland.

Anyhow, at these rates its probably worth getting a Tesco sim card if your likely to be making a lot of overseas calls, plus you get Tesco Clubcard points and free credit for your trouble. Details in the link below.

http://www.tescomobile.ie/international/index.aspx

FS

Pension Levy: Update

A Department of Finance official has indicated that ARF (Approved Retirement Funds) will escape the pension Levy announced on Tuesday.

More to follow when details of the levy are announced over the coming weeks.

FS

Jobs Initiative, Main Points

 A 0.6 per cent levy on pension funds to raise €470 million a year.VAT on tourism-related goods and services will be cut to 9 per cent.

Air travel tax will be suspended.

Employers’ PRSI for workers on below €356 a week will be halved.

The minimum wage to be restored to €8.65 per hour from July 1st.

Extra funds for work on regional roads and schools.

More training places, back to education initiatives and internship scheme will provide 20,900 places.

Get help with your Financial Problems

If you are experiencing financial difficulties the first thing to do is to ask for help. Closing your eyes to your problems will only cause you unnecessary stress.

If your debts are mounting and your 'robbing Peter to pay Paul' just to get by, the first thing to do is to budget your money correctly and get a true sense of your financial situation. Your lenders may be in a position to help you restructure your debts/payments into a more manageable package, generally speaking if your open and honest with them, they will treat you fairly.

For a lot of people however they may feel overwhelmed with their situation, they don't even know where to start to put themselves on the path to recovery. Luckily there is an agency which can help you, the Money Advice and Budgeting Service will help you take control again. They will budget your money, work out a payment plan for your debts/utility bills and there is no cost involved.

Contact them http://www.mabs.ie/ and they will schedule a meeting for you. As you can imagine they are extraordinarily busy at the moment and you may need to wait a few weeks but it will be worth it. There are a number of private budgeting services who promise to renegotiate your debt but please tread carefully, they do charge fees.

FS

Pension Levy to be announced on Tuesday

Minister for Finance, Michael Noonan, will confirm a 0.5% levy on all private pension funds next Tuesday.

They intend to pay for the new governments 'Jobs Initiative' with the levy. It will stay in place for 4 years, to say that this could prove controversial is an understatement. Temporary Levy's in Ireland have a nasty habit of becoming permanent when Governments realise they cannot forgo the income that they generate.

When more is announced i will update with further posts.

FS

Property & Water charges in 2012

It is now almost certain that flat rate property and water charges will be implemented in Budget 2012.

The water tax (or 'utility charge' as minister Phil Hogan is calling it) will be flat at somewhere between €150 and €200 per household. The revenue arising from this will be used to install water meters countrywide so in future the charge will be levied on a pay per use basis with some threshold of free water for each household.

Property tax will also be flat at around €100, irrespective of weather your house is a mansion or a maisonette. This will be replaced in due course with a property specific 'site value tax'.

Taxing people on a flat rate basis is regressive so why do it like this? Well both of these measures are outlined as necessities in the IMF/EU bailout, this is simply the cheapest and fastest way for the government to introduce them.

The always excellent Professor Morgan Kelly give an insight into the bailout in today's Irish times, http://www.irishtimes.com/newspaper/opinion/2011/0507/1224296372123.html .

Efficient Driving

Altering your driving style will save you a lot of money. We all have bad habits behind the wheel but by making a few simple changes you could see your fuel consumption drop.

• Ensure that your tires are inflated to the correct pressure, check these once a week.
• Have your car serviced regularly
• Air conditioning uses a lot of energy,cut it out.
• Don't carry extra weight in your car, empty the boot of unnecessary items.
• Always select the highest safe gear when driving.
• Don't drive with your windows open, it creates drag.
• Drive defensively, anticipate the traffic ahead of you.
• Slow yourself using the gears, the foot break uses a lot of power.
• Bringing your car to a complete stop and moving off is very fuel intensive, better to simply coast and the traffic light might etc may clear by the time you reach it.
• If your car has an on board computer you will be able to see how your driving style affects the fuel economy, it will show the Miles Per Gallon/Litres per 100 Km.
• Select your route, going uphill uses a lot of fuel.
• Use cruise control if available for motorway driving.
• Remove outer items like roof boxes/racks.
• Turn off your engine if your likely to be stopped for 3+ minutes.
• Slow down, for every 5 mph above 60 mph (95 kph), your fuel efficiency reduces by 5%.

The ultimate way to save on petrol is to walk or take the bike for shorter journeys.

FS

Just remember things could always be worse!

Financial Services Ombudsman

The Financial Services Ombudsman is a statutory body set up by the Central Bank to investigate and adjudicate on complaints from members of the public against financial service providers.

If you feel you have been miss-sold a product or the advice provided was improper the first step in making a complaint is to approach the provider directly (a bank, building society, life insurance company, financial advisor etc) and make a formal complaint, this is always best done in writing. Each provider is obliged to have a written procedure to deal with complaints. There is a time frame in which your complaint needs to be dealt with, this should be outlined to you upon receipt of your initial complaint letter.

If the providers internal complaints procedures has been exhausted and you are still unhappy, you are entitled to make a complaint to the ombudsman. They will ask you to outline in writing the nature and substance of your complaint. They will ask the provider for their response to your complaint and may ask to view all their correspondence relating to you as a customer. Again time frames will be outlined as to when you can expect a response.

The Ombudsman can find in your favour, partially in your favor or your complaint may not be upheld. Financial recompense is an option within certain limits. The findings are binding on both parties but can be appealed to the high court by either side.

Naturally your complaint must be valid, for example if you made a risky investment, your advisor briefed you of the risks involved and you go on to lose some or all of your investment, that is not on its own grounds for a complaint. If you go to your bank and ask for a no risk place to put your funds to pay for a child's college education in three years and they end up advising you to invest in a closed, 8 year, geared property fund then your complaint is clearly looking pretty sound.

The complaint process is completely done in writing and there are no costs involved except the time taken to write your complaint. For further info on the FSO and contact details, please see http://www.financialombudsman.ie/

FS

ECB keeps interest rate steady at 1.25%

At the monthly meeting of the ECB yesterday, John Claude Trichet announced that they would leave the interest rate at 1.25%, its unlikely there will be another rate rise until later in the summer, possibly in July.

This is good news for embattled mortgage holders.

FS

Bord Gais to request price increase in the Autumn

Bord Gais chief Executive John Mullins has announced that it will be seeking a double digit price increase from the Commission for Energy Regulation in July, to take affect in October.

Gas: Increase of 10-20%
Electricity: Increase of around 10%

He blamed a spike in energy prices on international markets and pointed out that wholesale gas prices had doubled over the last year. The company was no longer in a position to absorb such significant price increases and would have to start passing them on to consumers.

If you are with BG, make sure to watch the market carefully over the next few months, if its a truly competitive market, the other players will either do their best to attract customers by resisting increasing their prices...or simply coalesce to increase prices across the board. Either way be prepared to migrate your supply when the dust settles we can see who is offering the best value in the market.

FS

Last Call for Scrappage

The Governments car scrappage deal ends soon, June 30th, if you have a ten year old car and are thinking of something new its time to make the move.

Your new car needs to be registered by June 30th to avail of the scheme, make sure to check (and double check) with your dealer that the car will be available by that date. Remember that if your planning on adding additional extras or are looking for a unusual colour, the car will need time to be built so you may be cutting it fine.

There are restrictions built into the scheme so visit http://www.revenue.ie/en/tax/vrt/faqs-scrappage-scheme.html to familiarise yourself.

FS

Meteor remove roaming charges

Just in time for the summer holidays Meteor Mobile have announced that they are removing their roaming fees within the EU, this means you can make and receive calls for the same price as at home.

Visit http://www.meteor.ie/do_more/roaming/euro_rates/ for further information.

FS

Store Loyalty Cards

No matter how frugal you are you still need to eat, buy car insurance, put petrol in the car etc...why not get something back for it. Most large supermarkets have customer loyalty schemes, some are better than others but if used right you can get something back from the everyday things that we all need to buy.

I talk about the Tesco Clubcard scheme not out of any sort of endorsement for the brand or scheme but its simply the one I'm most familiar with and the most developed in the Irish Market.

When you do your weekly shop you receive one point for every euro spent. You might also get special vouchers of 80 or 100 points for purchasing particular items. Each point is worth a cent in vouchers that can be spent store wide. These vouchers are sent to you quarterly, or you can collect only once a year for signing up to their 'Christmas Club', this is where you can let your amassed points pay for your Christmas shopping in one fell swoop, not to shabby for simply carrying a card around with you.

That's the basics but you can really build them up quickly by using them in the Tesco Petrol stations attaching to some of their stores, you get one point for every two euro spent on fuel. This is a bit of a no brainer as their fuel is usually some of the most affordable.

Tesco also offer car insurance (underwritten by Royal and Sun Alliance) and you will receive money off for being a clubcard customer and you also get points on every euro you spend on your premium.

They also offer a simple credit card product (max credit limit €1500) but you will get points for using your card anywhere, and double points for using it in a Tesco store.

Its amazing how quickley the points build up. Pay attention to the extra points offers that they give you but remember its only good value if you intended to buy the product anyway.

FS

Life Assurance beginners guide part 4- Policy options and common terms

If your not familiar with Life Assurance Contracts, your eyes probably glaze over when your confronted with some of the language used, il try and shed some light on some of the policy terms and options available.

Critical Illness/Specified Illness: If you take this option on your life assurance, the company promises to pay a lump sum in the event of you contracting one of the illnesses listed on your policy. This is likely to include heart attack, cancers, organ failure....the list goes on, some companies cover 40+ illnesses. This can be taken out as a stand alone policy or can be included with the decreasing/level/whole of life type policies described in other posts. Critical Illness can be expensive as you are more likely to claim for a critical illness then to die during any particular period of time. If you include 'CI' in your life policy you will have the option to have it 'accelarated' or 'double cover'. Accelerated is cheaper as it means that if you claim on your CI, your life cover will be reduced by that amount. If you have 200k life and double cover critical illness policy, then you can claim 200k on your CI and there can be a further 200k paid out in the event of death.

Children's Life or Critical Illness: This is usually a complimentary added benefit to all policies, it will pay out a nominal sum in the event of the death of a child (6mths to 18 years) or if they contract a listed critical illness.

Hospital Cash: If you are hospitalised this benefit promises to pay you a set amount each day, eg €65, that you are in hospital. There will be a deferral period, ie you must be in hospital for 3/7 days before the payments will begin. There is also a upper limit on how many days in any year they will pay out on.

Surgical Cash: If you undergo surgery this will pay out a fixed amount, minor and major surgeries will be paid different amounts.

Sum Assured: This is the amount you are covered for.

Indexation: The ability to increase your life cover annually without medical evidence, usually 3% or 5%. Your premium will increase by a bigger % than the increase in cover.

Guaranteed Increase Option: This can be offered at regular periods whereby you have the option to increase your cover by say 20% without evidence of health. Your premium will increase by a bigger % than the increase in cover.

Premium: This is amount you pay for your cover, it can be paid monthly, quarterly or annually.

Life Assured: The person(s) who are covered on the policy. The life assured does not have to be the policy owner, ie a husband can own a policy that would pay out in the event of the death of his wife.

Deed of Assignment: The document that a lender will send to a life company to assume a hold over a policy, usually connected to a mortgage/loan.

Letter of no further interest: Confirmation from a lender that they are releasing their interest in a policy, usually only when a mortgage/loan has been cleared.

Exit Tax: Levied at 30% on any 'profits' made through a investment with a life assurance company.

Early Encashment Penalty: Levied by the life company to discourage cashing a policy in earlier than agreed.

Exclusion: Where a life company will cover you for critical illness or income protection but will exclude certain claims if they are related to a pre existing condition illness, eg back problems, mental heatlh problems in the past.

Special Terms: Where a life company will cover you for life/criticall illness but you will have to pay a higher premium due to a risk that you pose to them. Eg over weight/previous poor health.

Proposal Form: The form you complete to apply for a policy.

Underwriting: The process of assessing risk.

Market Value Adjustment: A reduction in the value of funds held within a 'with profit' fund to reflect the true market value. This is done to prevent 'profit taking' at the expense of existing policy holders.

FS