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Financial advice for females – Some tops tips for improving your planning

While money management entails the same approach whether you are a woman or a man, women’s financial needs are largely different to men’s. Women still generally earn less than men, even in the same roles; they are more likely to take breaks from the workforce and, on average, live longer.

Being financially savvy means providing for both the planned events in life such as study, travel, buying a house and, of course, retirement, but also the unexpected events in life such as the diagnosis of serious illness, reduced circumstances or the premature death of you or your spouse.

Here are some ideas on how women can get on top of your financial planning.

Plan for retirement now
Take out a pension now, if not yesterday – contributions to Revenue-approved pension schemes attract very generous tax relief (up to 51 per cent for company directors).

The contributory state pension is currently at around €12,000 a year, if you’re even entitled to it. This represents a major income drop for the majority of people, and the age at which you become entitled to the state pension is being pushed out further, so the bigger your private pension pot the better.

Review your existing pension arrangements to ensure that you know this pot is working for you, and that the fund will realise your retirement objectives in terms of paying you your expected annual income from your chosen retirement age.

A recent HerMoney survey revealed that 45 per cent of female respondents claimed to have pension policies in place from previous employment contracts, but 52 per cent of those respondents had never reviewed these policies, and had no idea about how they were performing or how much they were worth.

The average maturing pension pot in Ireland is approximately €100,000, but the minimum pot required at normal retirement age is actually closer to €400,000. This pot would provide an additional private retirement income of approximately €12,000 per annum at age 65.

Pension funding is the most tax-efficient way of building wealth, and pension schemes attract a whole package of generous tax benefits at the beginning, middle and end of the process. Over 50 per cent of Irish women surveyed by HerMoney survey were totally unaware of these facts.

Protect your earnings
A staggeringly low number of women have income protection policies, despite the fact that many of them are significant contributors to the household income. This means that the risk to the overall family finances, in the event of them being diagnosed with a serious illness or being hit with an unexpected injury, is considerable.

Life cover is also a fundamental part of having a sound financial plan, and few people are aware of that fact that it is quite cheap, which means there’s no excuse not to get covered now. The purpose of life cover is to provide you with the comfort of knowing that a lump sum of money will be available to protect your loved ones in the event of your passing. It is especially important in the case of parents with young children.

It is essential to have cover in place to cover any outstanding debts, like the mortgage, credit cards and car loans, and other expenses including funeral and burial costs. Talk to an adviser to discuss your best options in this regard.

Start saving
Everyone should start with a savings goal. The main thing is to be realistic here – think of a specific purchase or benchmark you could realistically reach in 12 months (eg, that dream holiday, a new car or maybe just a rainy-day fund). Either way, your goal should require self-discipline and a little sacrifice when it comes to spending.

In order not to lose track of this goal, a good idea might be to get a family member to hold you accountable, or write the goal down in a place where you’ll see it every day, like a post-it on the fridge or in your diary.

Knowing the difference between a ‘want’ and a ‘need’ can greatly save you money. Many of the items we buy are items that we don’t have to have in order to survive, so avoid over-extending yourself and think before you act
Ideally, everyone should have four times their net monthly salary in an account where it can be accessed immediately for unexpected events.

Having a steady amount taken directly from earnings is the least stressful method of saving. It doesn’t have to be a large sum, but needs to be regular, realistic and in line with personal overheads.

Women are traditionally better at saving, but negative interest rates impact the value and return on standard savings with banks, so talk to a financial adviser about investment products that will make your regular savings work harder.

Invest in the markets
Financial markets deliver better returns than bank deposits over time, especially with current low or no-interest deposit accounts. If you have a nest egg or inheritance, make your money work harder for you and enjoy better returns.

Talk to an adviser and choose a plan that you can invest in on regular basis and which you can tailor to your changing life goals and investment needs. Once your attitude to risk has been assessed by your adviser, they will explain the different types of investment funds available to suit your requirements.

Assess overheads annually
The cost of household overheads, from school fees to insurances, is constantly rising. Make a point of assessing your outgoings against your income once a year and do not assume it will be a static picture.

Make a note in your diary of when your main insurance policies are up for renewal.

Then, about one month beforehand, start shopping around – most people leave it too late and end up committing to perhaps an overpriced policy for yet another year.

Shop around for the best deals in utilities: it is possible to save considerably by switching providers of telecoms or other utilities by simply asking for a better deal.

After you have reviewed the big ticket expenses, examine where exactly the rest of your pay is going and which areas you’re overspending on. Eliminate any unnecessary items of expenditure.

As a result, you’ll feel more in control of your money, and this is a key step in achieving that path to financial freedom.

Get independent financial advice
Unlike the financial spring clean which we can take care of ourselves, many people don’t have the expertise to assess the bigger costs like mortgages.

Checking that you are still getting the best rate or whether making a lump-sum payment from a no-interest deposit account will save you more in the long run are all areas that need the expertise of a professional mortgage adviser.

There is generally a decent return on the small fee invested in proper financial expertise.

If you are a mortgage holder who took out your loan in 2011 when variable rates were at their highest at 4.4 per cent, you might now qualify for a rate as low as 3.1 per cent if your loan to value is less than 50 per cent.

This could mean huge savings over the total mortgage term. A review of your associated mortgage life cover should also be factored in here.

Manage your own money
Some women make the big mistake of leaving control of their finances to the men in their lives.

If they then end up single later in life due to separation, divorce or death, they are not in a good position to take back control of their finances.

Women should manage their own money at every stage of their life. They should have at least one bank account in their own name in order to build their own credit history. They should know the details of their family’s finances, investments and debts.

Knowing all of these details can greatly help you to come out of a possible negative situation, and reduce the financial strain that could easily have been avoided.

Adopt a foolproof credit card strategy
Make this the year that you finally tackle that nasty credit card debt once and for all. This is an area completely within your control. Every time you pay off a card with a 16 per cent interest rate, you get a 16 per cent return on your money, which in the current climate of low deposit rates is a no-brainer.

Check to see if you qualify for a balance transfer to a card that offers a low or zero per cent introductory interest rate for the first six to 12 months. If you do manage to get a good deal, move your high-rate debt to that new card. Try not to use the card for any new expenses and if you do, push yourself hard to pay off the balance as soon as possible.

Think before you buy
Much easier said than done, but try your best to make wise buying decisions. Consumers’ spending decisions are processed more by emotions than by the numbers.

Knowing the difference between a “want” and a “need” can greatly save you money. Many of the items we buy are items that we don’t have to have in order to survive, so avoid over-extending yourself and think before you act.

Know your tax credits
Everyone should be aware of all the tax credits and allowances that apply to them.

Too much money is being left in the hands of the Revenue in the form of unclaimed taxes.

Women returning from maternity leave should review their tax credits to ensure that they are correct, as their tax credits should increase to reflect the fact that they are no longer in receipt of maternity benefit.

For further information on all tax credits and allowances available, see revenue.ie.

Carol Brick, Sunday Business Post, 4th May 2017



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Younger workers to be left behind in new Public Sector pay deal

• State plans to retain lower pay rates for 50,000 newest teachers, nurses and gardaí • Lower pay rates to cost young teachers €75,000 over the course of their career

The government is determined to keep a two-tier pay system in place in a new public sector pay deal, in a move that will amplify the division between younger and older public sector workers.

It will be a major flashpoint for at least 50,000 teachers, nurses, gardaí and other public servants who have been recruited on lower pay rates over the past six years.

They had expected that the talks on the new pay deal, starting next week, would bring them into line with their older colleagues.

But it is understood that the government’s firm position is that it will not pay “over the odds” for new recruits when there are no problems with recruiting teachers, gardaí, civil servants and council workers.

The key argument made by unions against lower pay rates for newer public sector workers was that it was affecting recruitment. Government sources, however, have pointed to the findings of the Public Sector Pay Commission, which found there was “no evidence” that the reduced pay rates for new entrants were affecting recruitment to the public service in general.

Official figures supplied to the commission show that there were:

● Around 43,000 applications for around 4,000 civil service posts in the most recent recruitment round in 2015;

● Around 5,000 applications for 650 new positions in the Garda Síochána last year, and

● Around 1,200 applications for 112 senior executive jobs in councils this year.

Unions privately acknowledge that their case for pay equality has not been helped by the findings of the pay commission report. Pay rates were cut by 10 per cent for teachers, nurses, gardaí and other public servants who joined after January 2011.

Although some of the cuts have been reversed, they are still two years behind on the salary scales. Teaching unions have estimated that the current lower pay rates for new teachers will cost them €75,000 over the course of their career.

Due to the limited money available for pay rises, any move towards pay equalisation for younger public servants will reduce the potential for pay rises for older public servants.

Unions believe, however, that it may be possible to increase pay for the 50,000 public servants who joined after 2013. They are on an average career pension that is far less valuable than the pensions for the other 85 per cent of public servants who joined before 2013. Unions believe that giving the post-2013 workers a higher reduction on their pension levy than longer-serving public servants would be a way of increasing their pay.

“You could design something around that,” a union source said.

Pay equality was the issue that ASTI campaigned on when it went on strike for three days last year. But getting rid of reduced pay rates for teachers and other education staff would cost €85 million per year and make it more expensive to recruit new teachers. There are similar reduced pay rates in place right across the public sector.

However, the public service pay commission did acknowledge there are shortages of nurses in mental health services and emergency departments. The HSE is also unable to recruit enough hospital consultants, radiographers and psychologists.

Fianna Fáil public expenditure spokesman Dara Calleary said that consideration should be given to higher pay in areas of the health service struggling to get recruits.

“The inability to fill certain positions is directly contributing to the major problems with waiting lists,” he said.

By Michael Brennan, Sunday Business Post,