Employee Financial Wellness, Financial Planning, Financial Stress
Back in June we published a blog titled Cost-of-Living Crisis Still Causing Employees Significant Levels of Financial Stress! In this blog we discussed how people were dealing with the financial strain of the cost-of-living crisis. Now the Competition and Consumer Protection Commission (CCPC) has released a report on financial wellbeing in Ireland.
Using data from 1,505 interviews representing a sample of the Irish population the report presents an overview of Irish financial knowledge, attitudes and behaviour. This report has some interesting findings.
A summary of some of the findings
- 58% people are satisfied with the current financial situation
- 1 in 7 reports too much debt
- 1 in 3 reports that they are “just getting by,”
- Most people believe they can sustain their living expenses for three months or more in the case of a financial shock such as the loss of income, but 1 in 8 say they would just be able to cover their costs for a month or less.
- 86% of households save, with most using deposit or savings accounts.
- 77% of participants said they had access to the State pension with a similar percentage saying that they planned to use a private or occupational pension to fund their retirement
- Around a quarter of respondents said they did not shop around before purchasing a financial product
- There are significant differences between age groups, with those over 60 showing greater financial resilience than those under 30
Kevin O’Brien, a Member of the Competition and Consumer Protection Commission, said about the report. ” It shows a population making sound financial decisions, saving, budgeting, and drawing on information from a range of sources before choosing a mortgage or loan,”
We could take from this that having knowledge of where to look for information, what information to look for and from whom contributes to better financial decisions being made.
Financial education can make a real difference for people when looking to make better financial decisions now and for the future.
Our financial education programmes are designed to educate employees so that they can be in a position to make good financial decisions, see how we do this here.
A full copy of the report can be found on the CCPC website https://www.ccpc.ie/business/
For more information on how our Financial Education Programmes can help your employees contact us here.
Source: https://www.ccpc.ie/business/ccpc-issues-landmark-report-on-financial-wellbeing-in-ireland/, https://www.rte.ie/news/business/2023/0706/1393000-1-in-3-struggling-to-survive-financially-ccpc-report/
Financial Planning
Keep your Money Safe – Avoid Black Friday Pitfalls
We can all be tempted by the online Black Friday and Christmas sales this time of year. Every year many of us end up in that last minute rush to find presents, but it’s a good idea to take a minute to think about staying safe while spending online.
Here is a small list of helpful tips to keep you safe while online shopping:
- Firstly, reputation matters. Using a reputable trader is one of the best ways to ensure you don’t get scammed while shopping online.
Some simple quick checks that you can do to check if a website is safe, would be to first check if they have the SSL certificate or icons with the words “Secure” or “Verified” located beside a URL at the top of the webpage. You could try using Google Transparency Report webpage. This will allow you to run a website’s address through this service to see its safety rating from Google.
- Read Reviews. By checking out what others are saying about a company and their goods can be a simple but highly effective way to know what to expect from them. Using Trust Pilot, Google Business Reviews and Feefo are great ways of finding out what other shoppers’ experience has been. Remember, everyone has different opinions and view experiences differently but it’s good to get an overall view of a company.
- A top tip, if you are shopping online and you are a Revolut member, you have the option to create a ‘virtual’ card within the Revolut app that you can use for one-off purchases online. Then the card details expire. This is a great option for security that even if you did purchase off a site that wasn’t legit the scammers will not have details to any more of your money.
Know the rules!
If you are purchasing goods online from within the EU, then you are protected under the consumer protection laws.
It is worth mentioning within the EU you have a 14-day cooling-off period that applies from when you receive the goods and means you are entitled to a refund within the 14 days. Be careful though as some goods are excluded from this cooling-off period, such as: hotel bookings, car rentals, perishable goods, and some personalised goods. So best check on what goods have a 14 cooling off period before purchasing.
Just like Santa checks his list twice, it’s good practice to read the terms and conditions of any site before purchasing. A key area to pay attention to is the returns policy of the company.
Don’t forget that now the UK is outside the EU, and this means that VAT and customs will apply to orders coming from there.
Lastly, don’t feel pressured to buy under sales events. We all are aware of the Black Fridays and Christmas sales making us feel we must purchase these goods now. However, these are often just sales techniques and may not be money saving.
A good rule of thumb is that bargains are only bargains if you needed the item, to begin with.
Corporate Wellness, Employee Financial Wellness, Financial Planning, Financial Stress
The 2023 Budget – What does it mean for Employees
An unprecedented €11 billion budget package was set out in the 2023 Budget. It was framed as a ‘Cost of Living’ budget.
Some of the main benefits will not be noticed in our pockets until January 2023 including changes in taxation, cost of living supports, supports for energy costs, health, housing & education.
Let’s look at some of the key measures planned which could have an impact on your employees:
Reduction in Personal Tax
Likely the largest difference in employee net income.
- The standard rate tax band of 20% has been increased to €40,000 from €36,800 for a single individual.
This means you do not reach the higher tax band of 40% until your income reaches €40,000.
Meanwhile, couples can earn €80,000 before paying tax at the higher rate. This change will result in savings of €800 a year for those on the higher rate and up to €1,600 for a couple.
- The personal tax credit will increase by €75 for an individual and €150 for a married couple.
- The Home Carer Tax Credit has also been raised by €100
Universal Social Charge (USC) has been Reduced
- The Government is increasing the 2% Universal Social Charge (USC) Band – from €21,295 to €22,920. The purpose of USC is to provide a steady income to the Exchequer to provide funding for public services. USC is paid on our total gross income.
Example of how these changes would work in practice
Based on a Single person, age 45 on a salary of €45,000 with no dependents & no additional employer benefits:
| 2022 2023 |
| Gross salary €45,000 €45,000 |
| Tax payable €36,800 @ 20% €40,000 @ 20% |
| €8,200 @ 40% €5,000 @ 40% |
| Total tax liability €10,640 €10,000 |
| Minus personal tax credits €3,400 €3,550 |
| PRSI €1,800 €1,800 |
| USC €1,312 €1,272 |
| Annual Net Income €34,648 €35,478 |
Savings plans
- For those with savings plans in place, exit tax remains at 41% on any growth. tax is liable on any encashments – be that partial encashments or full encashments and/or on the 8th anniversary of the policy. In addition, the 1% Government Levy remains in place for these plans.
Child benefit and Education
- A once off double child benefit payment in November – this is for each child. That is €140 x 2 = €280
- there will be a Free School Book Scheme for primary school pupils from autumn 2023
- over 660 additional mainstream teachers, over 1,190 SNAs and 680 special education teachers will be provided
- the National Childcare Scheme hourly subsidy is to increase from 50c to €1.40
- there will be a €500 increase in post-graduate contribution grant for eligible families
- over 4,800 additional places on craft and consortia-led apprenticeships and 4,000 places on craft apprenticeship programmes will be supported
Cuts to college fees
- Students will benefit from a once-off €1,000 reduction in third-level fees in 2022.
- Families earning less than €100k will see a €500 reduction in fees.
- The income limit to qualify for a 50% reduction in contribution fees under SUSI will be increased from €55,240 to €62,000, and all SUSI maintenance grants will be increased by between 10 and 14% in September 2023.
- The Post-Graduate Fee Contribution Grant for eligible students of €3,500 will increase by €500 and the PhD stipend will increase too.
- Finally, the government is extending the 20% public transport fare reduction and the Youth Travel Card discount of 50% on all operators’ services to the end of 2023
Renters
- For the renters out there, €500 will be provided as a tax credit. The scheme is aimed at renters who do not qualify for other housing supports and has been backdated to account for rent paid in 2022
Mortgage seekers
- For those of you trying to get on the property ladder, the Help to Buy Scheme has been extended to the end of 2024.
So, our 2023 ‘Cost of Living’ Budget will result in Irish Workers seeing savings in their income tax, energy bills, rent and more.
Employee Financial Wellness, employee wellbeing, Financial Planning, Financial Stress
Our public sector specialists understand the health and wellbeing framework and we can play a key role in supporting employees in maintaining their financial health and wellbeing. We recognise that if financial stress is allowed to take hold and grow then it can adversely affect work performance and/or attendance and quality of life.
Our experience has shown that prevention is better than cure but traditionally there is an obvious gap in the financial planning advice that Civil and Public Sector employees receive. Our unique approach is focused on preventing financial stress through education and short and medium-term goal setting.
Having a clear roadmap means employees will gain more confidence in money management and making important financial decisions and as a result significantly decrease money-related stress.
Our WHO based health intervention methods means that we have a process that really works. Our proven method includes:
This is fundamental to the success of an Employee Financial Wellness intervention. We must understand the attitudes, opinions, trends and existing financial literacy levels of any given workforce. The tools we use include:
- Attitude and Trends Survey
- Engagement Surveys
- Individual Surveys
At the very core of our approach is our education pillar. This pillar is designed to deliver behavioural change to your employees through an educational programme built to help employees understand their financial goals and cater for:
- Life stage financial education including early, mid, late career and retirement
- Event Driven Financial Education including New Starters and Management Programmes
We deliver outcome-based communications in a fun, interactive way which are available for your entire team through our omnichannel delivery including options for in person and remote delivery. Our communications start by delivering group learning webinars/seminars that focus of the various financial life cycle stages of your workforce. We focus our group sessions on different demographics within an organisation including New Starters, Early Mid-career employees, late-career employees.
We move onto our specialist masterclasses that educate your employees on the individual topics that affect their financial lives. Topics include Mortgages Uncovered, Beat the Taxman (legally), Savings and Investments, Budgeting, Retire Well.
During the programme your employees will recognise areas where they may want individual financial guidance which helps them clarify elements of their financial situation and make decisions about the next steps so they have the option of our guidance clinics.
Guidance Clinics
Our individual guidance clinics are also hosted both virtually or in-person and allow employees to ask the questions that are relevant to them and have items they never thought to consider highlighted to ensure that employees are set on the right path to achieving their life goals and dreams. The days of being sold just ‘AVCs’ are long gone. They are 30 minutes long and the employee will leave with some high-level direction and goals to work towards.
Solutions
Employees will be signposted to the right solutions for their particular circumstances which could include a pension provider, their bank or regulated advice through their own provider or through Employee Financial Wellness.. One of the biggest obstacles to improved financial wellness is inaction.
Employees often engage with health promotion supports but without any action or change to their behaviour, they simply fall back into their old bad habits.
Employee Financial Wellness will ensure that employees are informed of the mechanics of how to makes changes to their financial set up which will, in turn, ensure that they arrive at their future financial events fully prepared for the associated cost.
We might end up recommending an AVC, but your employees will understand why and know all about the financial ABCs.
Financial Planning, Financial Stress
Back to School and Dealing with the Financial Stress
The Cost of living Crisis is impacting everyone and with back-to-school expenses coming into play there is an increase in the financial stress on many families. This year due to the high levels of inflation/cost of living crisis, parents will see increasing prices in a wide range of areas from transport, food, school supplies and uniforms. Also, as we head towards the colder months the increasing cost of energy prices and fuel prices is an area that may contribute to financial stress.
Barnardo’s back to school survey of 1,132 parents found that many parents were feeling under financial pressure, and some were having to take ‘worrying measures’ to handle the now higher costs.
The report showed that:
- 1 in 5 parents said they would have to use their savings to cover the back to school costs.
- 13% of primary school parents and 19% of secondary school parents would have to get a loan or use a credit card.
To help provide the school with support most parents are being asked to pay voluntary contributions by their schools. This is an added factor that parents will need to factor into their budget.
If you are looking towards the months ahead and are feeling overwhelmed, it might be a good time to get a head start and get some financial education around what are the best decisions that you could be making.
Some help with Costs
To help with the back to school pressure that some may be feeling here are some areas to consider if you are feeling concerned.
You could check if you qualify for the Back to School Clothing and Footwear Allowance. To qualify you must be:
- Getting a social welfare payment (including Working Family Payment and Back to Work Family Dividend or a Health Service Executive payment
- Taking part in an approved employment scheme (back-to-work scheme)
- Taking part in a recognised education or training course
- Getting a Daily Expenses Allowance for a child in education (or for yourself if you are 18–22 and returning to full-time second-level education)
- Involved in an Area Partnership Scheme
- Attending a FET (formerly Fás) training course
The child involved must be between the ages of 4-17 on the 20th of September 2022. If the child is age 18-22, they must be returning to second-level education in a school or college in the autumn of the year you are applying.
This year the Irish government has increased the back-to-school allowance to €100.
How can we help with financial stress?
We help employees with financial stress by providing them with education on their finances. Having a deeper level of understanding and guidance around your finances can help you make better decisions and elevate some of the stress that is often felt when dealing with our finances.
A way to prevent financial stress from happening in the first place is by identifying and planning for upcoming financial events that need to be addressed, understood, and targeted. These events can be split into short-medium- and long-term events and should have the correct plan in place to best meet each goal. If you are prepared for it, then this can help eliminate or at least lessen the potential stress.
If you think you or your team could benefit from talking to us, then don’t hesitate to contact us.
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Education, Financial Planning
Is it time for you to switch your bank accounts?
You may want to switch your current account because your fees are too high, you are unhappy with the service or perhaps your current bank is leaving the Irish market.
If you have decided it’s time to switch banks a good place to start is by reviewing the other options out there and finding out which bank best matches what you require. You should also visit each of the bank’s websites for full details about their services.
1 Preparing to switch- what to consider?
Before you open your new account, you should think about what you require from your new provider.
Do you need access to a physical branch for cash lodgment services or is your banking all done online?
How user-friendly are their online services?
2 Good ways to pick a provider
Search the market and review the different available offerings. Upon choosing one that is best suited to you, the new bank should supply you with a switching pack, this could be online or in the branch. This should include information about the different account types on offer and detailed steps guiding you through the switching process.
Top things to look out for:
- A copy of their terms and conditions
- A guide to their fees, charges and interest rates
- Contact details for making an appointment if it’s needed
It’s important to note the switching date, your new bank should have your new account up and running within 10 days after the agreed switching date.
If you are keeping your old account open, remember depending on the account you might have to continue paying monthly maintenance etc., make sure to let your new bank know what you decided to do with your old account before you switch.
A helpful tip to note is to choose a period of low activity to switch accounts, for example, if you have bills coming out of the account at the end of the month it is best to make sure to change your account before then.
A key point to note is to make sure your employer and anyone else who lodges money into your account is provided with the correct new details.
Step 3 Switching time:
Complete the switching forms that your new bank sends you. If you have any direct debits outside Ireland, you will need to inform them. Also, any recurring payments on your debit cards like gym membership or subscriptions will need to be updated with your new card details.
Your old bank will send your list of standing orders to your new bank but it’s good practice to double-check these to ensure they are correct.
The current balance in your old account will be transferred to your new one but note that you may need to leave enough money in your old one to cover any fees you might owe. It’s good to make sure you have enough money in both your old and new accounts to cover any payments that are due and don’t use your old debit card during the switching period as this will slow the process.
Step 4: Closing an account
If you are closing your old account, you might need to ring the bank to go through the process of closing an account.
If your current bank is leaving the market
Things to note are:
- Request a copy of your credit history before you close the account.
- Request a copy of your old statements either online or through your branch
- If you have a credit card and your bank is leaving Ireland, then you will need to transfer your credit card to a new provider. To avoid paying stamp duty twice request a letter of closure and then give this to your new card issuer. Note if you close a credit card account mid-year and don’t open a new one then you will be liable for the full stamp duty of €30.
Having your bank account working the way you need it to and providing the services you need on a day-to-day basis is important so take your time to review your options.
If you are switching providers it can be a good time to review your savings and evaluate if your bank account is the most suitable place for them, depending on your needs, interest rates etc. Sometimes bank savings accounts are not the best place for your lump sum savings, if you need some advice on this area then please feel free to talk to a member of our team.
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