In this Issue



1. Introduction

2. Time To Start Thinking Pensions

3. Life Assurance Policies - A look beyond the price

4. State Backed Initiatives To Support Businesses Through The Covid Crisis



 

Interesting Links



Budget 2021 Summary Sheet

Covid-19 Supports

Take credit for good financial planning


 

Contact



Reade Pensions & Financial Services Ltd.
7 Abbey House
Main Street
Clonee, Co. Meath

Email: info@readepensions.com
Phone: 01 2569535
Web: www.readepensions.com/
Reade Pensions & Financial Services Ltd. is regulated by The Central Bank of Ireland.
Newsletter
 
This time of year is traditionally the time to file tax returns and is also known as 'Pension Season' because it is also the period when the attractive tax reliefs on making contributions to a Pension Plan are availed of. While this year the tax return deadline has been extended to year end it is still a good time to consider availing of the benefits of Pension Contributions. In the first article of our newsletter we focus on the benefits of a Pension Plan and the unique tax benefits available.

The Life Assurance market has changed considerably in recent years and it is no longer simply a matter of choosing the cheapest option when buying Life Assurance cover. Our second article looks at the many considerations beyond just the price and the importance of having access to good advice.

In this crazy world of 2020 it goes without saying that many businesses are suffering and experiencing financial challenges. We think our third article is well worth a read in that it looks at the various State-backed initiatives that are in place to support business through the Covid crisis.

We hope you and your families are staying safe and healthy and we want to thank you for your continued support. Please do not hesitate to contact us if you have any queries.

Time To Start Thinking Pensions
 
While these are crazy and uncertain times in the world, you can be certain that it is also raising questions in people's minds about their financial security. With job uncertainty being a major factor for many there is perhaps a natural temptation to cut back on pension provision. Our strong advice is not to do this. In times of uncertainty perhaps a better focus is to look at the very strong reasons why you should invest in a pension plan. Lets have a look:

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Securing your future

 

Make no mistake, the starting point is the most important point when it comes to pensions. And the earlier you get things started the better it will be. Of course it is hard for someone in their 20s to think about saving for their retirement – let’s face it you feel immortal and you will never get old – and it is made even harder in a fraught economic climate. But the sooner a pension is started, the less a person will have to save. A further consideration here is that our life expectancy is now longer than ever before and so the need to start sooner is even greater.

 

Look at the tax incentives

 

Investing or saving your money in a Pension Plan qualifies for unique tax reliefs that are not available to you elsewhere. Consider these:

 

  • The contribution you pay into your pension plan within approved limits are fully allowable against your income tax. A simple example is that, for top rate tax payers, for every €1000 you put into your pension plan you get €400 back in a tax reduction.
    €1000 invested at a net cost of €600!!

 

  • When this €1000 is invested in your pension plan the investment return accumulates totally free of tax. Compare this to a normal investment where the tax charge on your gain can be as high as 35%.

 

  • You can take a large slice of your pension pot as a tax-free lump sum when you retire. Depending on the type of pension plan you have this can be either 25% of the total value of your pension savings or 1.5 times your final income at the time of your retirement.
    Interesting

 

  • Rightly a key emphasis when investing in your Pension Fund is how to achieve a good return on your fund. It is worth noting, however, that no amount of investment growth will make up for a low contribution. Consider this - a pension fund with a contribution of €100 per month for 20 years earning 5% investment return gives a final value of just under €41,000. If the return was 20% higher, i.e. 6% the final value will have risen to just €45,600. If the contribution, however, was 20% higher, €120 per month and the return remained at 5% then the final value is just €49,000. So the same % increase in contribution has a much bigger impact on the fund at the end. This point is not to underplay the importance of wise investment but to emphasize the need to keep contributions at a good level.

 

A necessity, not a luxury 

 

Putting pension money aside for your future retirement should be considered an unavoidable outgoing and not a luxury. It is right up there with a mortgage, food, clothing and electricity as one of the things people need to realise that they cannot do without. Most of us have a little bit more time on our hands right now and perhaps setting a bit of this aside to consider your future financial security by investing in your pension plan is worthwhile.

 

You have access to good advice

A key to good pension planning is to have access to good advice. Your plans and goals need to be kept under constant review to take account of your changing needs and also economic events such as we are experiencing right now. Please don’t hesitate to contact us in this regard.

 
Life Assurance Policies - A look beyond the price
 

Insuring your life is not the most welcome subject to be considering at the best of time bearing in mind that you are being asked to allocate hard earned money towards a product from which you will not receive any benefit - remember the proceeds from a Life Assurance policy are generally paid out only when you die! Yet most do recognise the need to provide some protection for dependents in the event of our demise.

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For many years, the protection market and the policies available was one that was simply viewed in a “it does what it says on the tin” fashion and that would be a reasonable assessment. When seeking advice, the general and only questions to be answered were – Why do I need it? How much cover do I need? For how long? What is the cost?


For obvious reasons, a large focus was placed on obtaining the best price.  While the above is still of major importance, there is now so much more to consider when comparing the various protection offerings from the Life Insurance companies.


In this article we are going to look at some other key considerations when comparing the protection market that will ultimately ensure that you get the policy that meets your needs.


Term Life Assurance and Mortgage Protection Policies


Nowadays, protection plans include a range of additional add-on benefits and options that could prove to be greatly valuable to their owners at some stage during the term of the policy, but which may not be relevant to everyone.  


Guaranteed Insurability


For example, if you have a young family or you are planning to have a family, many life assurance plans now have the option for you to increase your cover (up to a certain amount) on the occurrence of particular life events without the need for medical evidence e.g. the birth or adoption of a child, getting married or moving home or re-mortgaging. Why not just take out a new policy when such event occurs, you might ask? If your circumstances were to change, particularly health wise, this might not be possible. These options do not require further evidence of health from when the policy was initially taken out. This is known as Guaranteed Insurability.  


Child Cover


In a similar family related vein, life assurance companies will pay out a sum of money in the event of the death of a child (under the age of 18 or up to age 25 [depending on the insurer] if attending third level education)*. While nobody likes to think of such a tragic event, such benefits are worth comparing. 


 


*Subject to policy conditions set out in the policy document.


 


Medical Support Services


Another feature of more modern protection policies is the inclusion of additional medical support services which can be extremely valuable for seeking a second opinion of a medical condition or even access to the support of a counselling service.


Advanced Funeral Expenses


Another example of a built-in feature is Advanced Funeral Expenses.  These are paid in advance of the main lump sum which may be delayed while the claim is being processed and while the relevant documentation is being gathered.   


Do I need help?


The above are just a few examples of benefits that are included in Term Life Assurance and Mortgage Protection contracts and the good news is that most of them are already included in the price.  Another consideration is the existence of price-matching enabling the customer to get the best of both worlds. That is why it is vital to conduct a full comparison of the different providers offerings in this arena.  All of this indicates the need for good advice. As qualified advisors, we have access to a range of tools to help analyse and identify the most suitable product for you and to help you to choose the right combination of cover for you and at the most competitive price.  


Below is as example of the various features / benefits that we compare on a regular basis.


Click here to open comparison report
State Backed Initiatives To Support Businesses Through The Covid Crisis
 

It has been a terrible time for many business since the breakout of the Covid-19 Pandemic and now it seems we are well into a second wave and with a long winter ahead. There are a number of State backed initiatives that are aimed at providing financial lifelines to keep businesses healthy and open.

Continue Reading...

Restart Grant Plus

 

The Restart Grant Plus is worth between€4000 and €25,000. To qualify your business must employ fewer than 250 employees and have suffered a hit to revenues of at least 25% as a result of covid. The allowable turnover to qualify has gone up from €5 million to €25 million and is also open to some who were ineligible under the earlier version of the scheme. You can apply through your local authority.

 

Covid-19 Credit Guarantee Scheme

 

This a new €2 billion scheme provides an 80% guarantee for credit products ranging from €10,000 to €1 million for terms between three and six months. Its for all SME’s with interest rates set below current market rates. To qualify you need to declare an adverse effect of a minimum of 15% of actual or projected turnover or profit due to the pandemic. It is available through AIB, BOI and Ulster Bank.

Covid-19 Working Capital Loan Scheme

 

This €450 million initiative helps to fund working capital requirements or any changes to a business to mitigate the impact of Covid-19. Loans of between €25,000 and €1.5 million are available at a maximum interest rate of 4% and a term of between one and three years. It includes unsecured loans of up to €500,000 with the option of interest only repayments.

 

Covid-19 Online Retail Scheme

 

Online has proven to be a life saver for many retailers in Covid. This is a €5.5 million scheme available from Enterprise Ireland designed to enable enhance their digital capability, drive their online sales and grow customer base. It’s a grant worth between €10,000 and €40,000 to cover up to 80% of project cost.

 

Trading Online Voucher

 

Aimed at smaller businesses at an early stage of their ecommerce journey this voucher scheme, available from a Local Enterprise Office (LEO), is worth up to €2,500 to help boost online sales. It is available on a 90% funded basis.

 

Covid-19 Business Loan

 

Also available from your LEO, clients can avail of low cost loans at interest rates between 4.5% and 5.5% from Microfinance Ireland with zero repayments and zero interest for the first 6 months and the equivalent of an additional 6 months interest-free subject to certain terms and conditions. The loans can range from €5,000 to €25,000. The loan terms are typically up to 3 years and there are no fees or charges.

 

Sustaining Enterprise Fund

 

Enterprise Ireland’s €180 million Sustaining Enterprise Fund provides funding from €100,000 to €800,000 for manufacturing and internationally traded services companies with more than 10 employees. Up to 50% of the funding is a non-repayable grant element up to a maximum of €200,000. Applications are due to close in December.

 

Sustaining Enterprise Fund – Small Business

 

Smaller businesses are addressed separate Fund. This provides between €25,000 and €50,000 in short term working capital to support business continuity and a return to growth in three years.

 

Peer-to Peer Lending

 

Linked Finance have funded more than €5.2 million in loans to SME’s since the start of lockdown. It provides loans for working capital, new kit or to hire staff. Applications are made online for loans from €5000 to €300,000 and they say decisions are made within 24 hours.

 

Covid-19 Business Financial Planning Grant

 

If you are not sure what kind of financial assistance you require there is a grant for that also! Available from Enterprise Ireland it gives up to €5000 to qualifying companies to help them develop a robust financial plan. The grant can also be used preparing the documentation required to support applications for external finance from banks or other finance providers.

 

Obviously these are difficult times for many businesses and having access to welcome supports from Government is a welcome boost. Hopefully this brief outline of what is on offer is of some help.