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