Last Thursday on the 7th of May, Lorraine has joined Mum Talks for the evening session “Ask the Experts”. The session covered Financial and Tax advice with focus on “Putting money back in your pocket during a Pandemic”.
1) The session commenced with information on temporary wage subsidy which was brought in on the 26th of March. Revenue is still to decide on how this benefit is going to be taxed. If you would like to know more or review your financial/tax situation, please get in touch with us.
2) Joint Assessment – It will benefit you if you are married or in a civil partnership and one person earning under and one over €35,300 per annum. If you are married couple and one person does not work, it will benefit in that scenario also. Your tax cut off, for singly assessed person is €35,300 and you pay 20% tax up to that amount. Anything over €35,300 you pay 40% tax. If you are married couple and only on one income, that amount is increased by €9,000 at 20% bracket. You can also share your tax credits with your spouse, if one person is on 40% tax bracket and one is on the 20% and they do not need all their tax credits they can share them with each other. There are loads of additional tax credits that people forget about or do not know about which they may be entitled to. You can back claim for 4 years so currently you can back claim for 2016 to 2019. It is always worth to review your taxes on an annual basis.
3) Mortgage Switcher – People who have mortgages usually do not review them. They do not know what interest they are on and can be a hassle to even think about changing the lender. However, the amount of interest to be saved by switching your mortgage is significant. To give an example for mortgage of €240K on a standard variable rate with one bank, if you move to the cheapest two-year fixed rate on the market you could save around €3,500 per annum in interest. People often don’t switch their mortgage as they assume it is the same as buying a property; however, you should take out the buying element as you don’t have to negotiate the price of the house and you are not dealing with the vendors. The only people you will be dealing with is your solicitor and your broker. The process is very straight forward. You can borrow up to 90% of the value of the property (you cannot do it if you are in negative equity). Lenders will have different offers to incentivise you to switch e.g. cash back offers which will cover your legal cost and valuation.
If you already moved your mortgage a few years ago you may think you do not have to look at this again. Definitely check your options regularly as the savings could be quite significant. Even if you are on the fixed rate at the minute you can check with your bank if there is a penalty to come of your fixed rate and if there is a penalty, we will weigh up the cost of the penalty, cost of the savings and see if is in your best interest to move.
4) Life Cover – It is so important; it is one thing that we cannot stress enough for people because most people are under insured. You might have cover with your employer or you may not. It is crucial, as ultimately if your spouse/partner dies, you want to make sure that there is income replacement for you and your family. If you have a mortgage and you have mortgage protection policy, yes, your mortgage will be paid but the expenditure will remain for your standard of living. If there is no income coming in anymore, it is crucial that you do have cover, so you are not financially stressed in the event of a death. If you are renting and have no cover you need to have life cover in place as there will be no mortgage protection policy and your rent will need to continue to be paid.
5) Illness Cover – if you diagnosed with a specified illness or you are out of work due to an illness, accident or disability, you should ensure that you have the right cover to make sure that you not financially stressed. We have seen situations where people during cancer treatment have been very worried where their employer was not paying them during the treatment. The worry and financial stress are huge. It takes away from the time that they were off for their treatment and should instead be focused on the recovery. Most people on average are out of work for 2 years if they are ill due to a specified illness e.g. cancer, heart attack, stroke. You can also protect your Income to 75% of your salary less social welfare illness benefit. There are many options available. We deal with all the insurers on the market and no two policies are the same therefore it is vital to receive impartial advice for your cover.
For more information or if you have any questions on the above topics please contact Jigsaw Financial Solutions Ltd at 01-2839360 or email: info@jigsawfinance.ie
