Blog – David McCarthy, Galway Talks, 07.02.2013

Issue:  IBRC

CommentSince the program last week, during which I believe that the Government took the right step with regard to liquidating IBRC, we have had revised details regarding the ‘famous’ promissory notes.  Rather than repeat the details here of what has occurred, which has been widely covered in the media, my own belief is that this is a positive step for the country and one that will help us return to the markets in the future.

Question:  My husband has a number of investment properties most of which are negative equity.  He does not have any life cover in relation to these mortgages.  Can you please advise me what he should do?  He is 50 years of age.

Answer:  If he is in good health it is important that he takes out some life cover to bridge the gap between the value of the properties and the sum owed to the bank, as his loans are in negative equity.  The problem that you could have in the event of his death, is that there would be a shortfall and the bank could look at other assets in his estate to bridge this.

Question:  I am in my 40’s and I am self employed.  I paid into a number of pension plans over the years but have not been able to make contributions for some time now.  Is there any way I can access these funds prior to retirement?

Answer:  Unfortunately you cannot access these funds until you retire.  This is a problem that a considerable number of people are encountering at the moment due to financial difficulties that they are in.  You can retire anytime from age 60 irrespective of the retirement age on the various pension plans that you hold.

Question:  I am in a position to save €200 per month and I am wondering what would be the best option for me?

Answer:  I believe the most prudent way to save these monies is through a regular savings account, which is currently paying in the region of 3.1%gross.  After a number of years, when you have reached a saving sum of circa €10,000, you could use these monies to make a lump sum investment for a period of time, assuming that you have no requirements for the monies.

This type of structure allows you to create your own portfolio of investments rather than relying on using a savings plan with a life assurance company, which has been the most traditional route that people have utilized in the past.