David answers questions on Galway Bay FM, 20th September 2012

– Question:  I worked for 15 years and recently was made redundant.  They have now corresponded with me regarding my pension giving me a number of options including leaving my pension fund where it is or moving it to something called a retirement bond.  Can you please advise me on this?

– Answer:  You have a number of choices with regard to the pension fund with your previous employer.  First of all you can leave the funds in the existing scheme, transfer the monies to a new employment or alternatively move your pension to a retirement bond.  A retirement bond still has the same conditions attached to it as the previous pension scheme in that you will not be able to drawdown the monies until age 65.

The benefit however of a retirement bond is that you can control how the monies are invested, with professional advice, and will not have any connection with the old scheme.  I would recommend that you proceed with this option.

– Question:  My husband and I have life cover attached to our mortgage.  My husband has been the main income earner for a number of years and I am concerned what would happen to our finances, if ever anything happened to him.  Do you have any advice?

– Answer:  As your husband is the main income earner it is extremely important that he has sufficient life cover (excluding mortgage protection policy) to replace the loss of his income in the unfortunate event that he dies.  You should look at any death-in-service benefit which he may have if he is a member of an occupational pension scheme.  This may be sufficient for your needs, however if it is not, or if he is not a member of a scheme which has sufficient life cover, then I would strongly suggest that you look at taking out a term life policy (depending on his age), to solve the issue.

– Question:  I have a small business and my borrowings with AIB were recently up for review.  They have renewed my facility however the interest rate has increased on my loans.  I feel as if I have been singled out by them.  Is this happening to other people?

– Answer:  The good news is that you are not alone in what you have experienced, however the bad news is you have no choice in this environment but to accept whatever terms the bank has offered you.  The problem that exists for most people is that they do not have the option of changing banks due to the ‘shutdown’ in lending.

Every bank is looking at each opportunity to maximise their income through increased interest/charges and unfortunately it is the consumer that is paying for this