Q: Any idea how to get PRSI refund on AVCs. I’ve been sent round in circles by Revenue.
David
A: Employees are entitled to get their tax back (20% or 41%) when they invest in a pension. They are also entitled to get tax relief of the amount of Pay Related Social Insurance (PRSI) they pay – 4%.
Write to the Collector General Gerry Harrahill at Dublin Castle and state how much you have put into your pensions and that you want to get a refund on the Pay Related Social Insurance.
Q: We took out our mortgage with Permanent TSB in 2005. We were on a tracker mortgage from then up until November 2006. At that point we then fixed our mortgage for 1 year. On expiry of that term we then fixed again for a further 5 years. In January 2009 we decided to opt out early of our fixed rate. I contacted the bank and they said that the tracker rate wasn't available any more and we would have to switch to a variable.
I have since reviewed all of our mortgage documents and letters from the bank and I noticed a condition of our mortgage which states:
'Please note that where the applicant switches the rate on this loan to a rate which is fixed for a certain period, the applicant must inform permanent TSB, on expiry of the fixed rate period, whether the rate on the loan is to switch into a further fixed rate (if available) or whether the loan is to revert to a tracker mortgage loan as described above. In the absence of instructions from the applicant at the expiry of the fixed rate period, the interest rate will switch to the then current variable interest rate and as may be varied from time to time thereafter.'
Do you think that I have a case to put to Permanent TSB as they did not offer me a tracker rate or did we scupper ourselves by opting out early?
Ashling
A: Write to Permanent TSB setting out that you want to go back to your tracker. If they refuse, and once you have this in writing, you could take the matter up with the Financial Services Ombudsman – it costs nothing.
Q: We have €30,000 to invest for around two years before we would need to take any of it out. Any suggestions on how to invest it so that it is secure and paying a decent return? Michael.
A: An Post’s savings bonds or certificates are an absolute no-brainer.
With An Post bonds, you get 3.23pc a year or 10pc over the three-year period of the bond. And that is tax free.
Saving certs have to be held for five-and-a-half years and the annual rate works out at 3.53pc – or 21pc over the full five-and-a-half years. Again, that is tax free.
Q: I co-own a house with my sister (worth approx. €150/160K) and we have a tracker mortgage. She wants me to buy her out there is approx. €50k of a mortgage left to pay and if I need to give her €25,000. Can I add this on to the mortgage and still keep the tracker or will I have to take another mortgage option? Helen
A: Lenders will let you top-up your tracker mortgages in some circumstances, but they are very reluctant to do this and they will need to be a good reason for them to do it. It is more likely they will force you to take out a standard variable rate mortgage to finance the €25,000 buy-out of your sister.
Q: I have a Laser card with Bank of Ireland, but I see the bank are ditching the Laser card and replacing it with a Visa card. What will this mean to me?
A: Bank of Ireland plans to phase out the Laser Debit Card for its one million personal banking customers from next year. Ulster Bank and Permanent TSB already operate the Visa debit card. The banks argue that by switching to these internationally recognised debit cards they can offer their customers a wider range of services, including being able to shop online.
Q: I have money to invest for my children’s future. Can you tell me where I can get the best long term rate? Is the National Solidarity Bond as good as it sounds? Karen
A: In what is a somewhat complicated structure, the bond will pay a 1pc 'coupon' or interest each year. This will be subject to DIRT (deposit interest retention tax) of 25p%.
In addition to this coupon, there will be a series of tax-free bonus payments.
If the bond is held for five years, the bonus will be 10p%, with a bonus of 22% for seven years. Those who hold the bond for the full 10 years will earn a tax-free bonus of 40%. Over 10 years the return works out at around 4% a year
The national solidarity bond has been criticised as a “lapse-supported” product. In other words, the investors who bail out within the first five years and end up with a small return after tax end up subsidising the returns for the very few who will stick it out for seven to 10 years.
Q: My wife and I were recently made redundant from our company. As a result, we were removed from the company VHI plan. VHI contacted us and asked us to renew but the costs after redundancy would be too great. They asked us to opt for a downgrading of our plans for one year. This downgrade allows us a semi-private bed in a public hospital. We would not be entitled to a bed in a private hospital. The cost of this for the both of us is €900. However, we have to return to our original plan level of twice this amount next year as this special offer is only for May '10 to May '11. This would mean a sizable amount out of our finances if we are not at work by then. As both of us are out of work we need to understand the alternative to the current mainstream health insurance providers. We would be grateful if you could advise if there is an alternative or is the above the best we are going to get?
Brendan.
A: Check out if you are entitled to a medical card. There are 1.5 million medical card holders in the State. You will have to be means tested, but if you get one you will get free GP services and only pay 50c per prescription.
Another alternative is to take out a hospital cash plan, such as those offered by registered charity HSF Health.
A cash plan is a claim for a cash benefit (which may be a flat rate or may be related to the cost of the medical service provided) after a consultation or treatment has taken place and the bill has been paid.
A cash plan doesn't pay private hospital or operation costs, but it does give cash back for a wide range of everyday healthcare costs such as GP visits, prescriptions, dentist fees, along with grants for hospital stays, birth grants and worldwide accident cover.
Another big advantage with a cash plan is that one premium covers the whole family.
Premiums for a HSF Health Plan start at €9.50 per month. This will cover you, your spouse or partner and dependent children up to the age of 21. The most popular plan costs €45.50 a month and will pay back up to €250 spent in a year on GP visits, and up to €1,050 on consultants, and up to €20,000 for an accident.
Q: I am in the process of trying to sell my house as I am looking to build a new house on family land. I currently have a tracker mortgage with EBS - is there any way of transferring this to the new property or will I have to take out a new mortgage and lose it? In the UK there are such things as "Life Time" tracker mortgages.
Philip
A: The answer is no, as the mortgage is taken out on the property and not on the person.
Q: I have a mortgage with Ulster bank and am on a variable rate of 3.85%. I was wondering about the likelihood of Ulster bank rates going up in the coming period as they are already well in excess of the other banks even taking into account the other banks recent hikes. Do you think I would be better to fix my rate? My current options are 4.20% for two years or 4.30% for three. The five year option of 4.95% is not something I would go for personally as it is too expensive.
Basically my question is are Ulster Bank likely to just rise in line with ECB rates from here on in as they already are pretty expensive or will they just keep taking more and more regardless of ECB rates. If this would be the case I would probably prefer to fix. Darren.
A: Ulster Bank has not increased its standard variable rates to the same extent as other lenders, because the bank not pass on all the rate cuts when European Central Bank gradually rates fell from 4.25% to 1%.
However, European interest rates are due to go up – probably at the end of next year. Check the mortgage calculator on www.itsyourmoney.ie and check if you could cope with rates going up, or if it would be better fixing.