Blog – David McCarthy – Galway Talks, 20/03/2014

galway-bayfmIssue:  Ulster Bank announces review of Irish operations.

Comment:  The parent of Ulster Bank in the UK, RBS, has announced a review of their Irish operations. Press reports have suggested that the bank could be merged with another entity such as Permanent TSB.  This would lead to the creation of a ‘third banking force’.  This is something that has been talked about for the last 20 years and would be a welcome development as it would provide real competition for AIB and Bank of Ireland.  It looks like, on this occasion, that some change in the structure of Ulster Bank will take place at some stage.

Question:  I am 64 years of age and have a Life Policy that has increased in cost over the last few years.  Would it be worth my while to look at getting alternative cover from another company?

Answer:  Unfortunately this appears to be a Whole of Life Policy, which will get more expensive as you get older.  Due to your age if you go to another life company looking for a quote this is likely to be even more expensive.

The question for you to consider is whether or not you want to reduce the cover and accordingly the premium on the existing policy or, if you have no need for life cover at all then you could consider cancelling it.

Question:  My mother has monies on deposit and receives a Pension, which is sufficient for her everyday needs.  Interest rates have dropped dramatically and I am wondering what alternatives she may have to leaving the monies on deposit?

Answer:  This is a common problem that people are experiencing due to the drop in interest rates.  The only way to maximize these monies is to tie them up for a period of time in a Term Investment.  You could possibly consider KBC Bank’s Secure Income Account, which is for a 5 year period and provides a full Capital Guarantee paying an annual income of 2.8% gross.