Login

Money Times - July 5, 2016

Posted by Jill Kerby on July 05 2016 @ 09:00

 

BREXIT BLUES APPEAR IN THIS MONTH’S POST BAG

 

The anti-Brexit referendum result means that quite a few readers, who were worried about their UK pensions, properties, bank accounts and even whether they would end up paying higher university fees for their children could end up worse off financially. We’ll answer some of these and other questions this week and next. 

 

What to do with cash was of particular interest to several readers:

 

Ms JN writes: I live and work in Northern Ireland. I will soon receive an inheritance of €50,000 from the sale of my late parents’ house (in the South). Is it better to open a bank account in the Republic or get it transferred directly into my bank account in the North? I'm a bit worried about exchange rates right now. I don’t want to lose too much in the transfer.

 

Sterling had been weakening against the euro this year, mainly due to concerns about Brexit. The ‘Leave’ vote further weakened the euro/sterling price – at time of writing it was 83 cent to the pound; the day before the referendum it was 77 cent so there has been a 10% shift. But this rate means that your transferred euro inheritance will buy you more in the North and is good news for visitors to the UK, for parents supporting children studying in the UK or for any of us who buy sterling denominated goods and services.(It’s bad news for anyone selling stuff into the UK or for Irish tourism.)

 

Transferring this €50,000 inheritance to your account in the North will boost its spending power by about €5,000, but sterling has fallen heavily against the US dollar as well and Britain is a huge importer. This will eventually be reflected in the price of your high street goods, the cost of oil and petrol in the North.

 

Ends

 

Mr SK writes:  I lived and worked in Birmingham receive both a UK old age pension and a small occupational one as I lived for more than 20 years in Birmingham. What is going to happen to my pensions?

 

Your pensions will continue to be paid. However, the fall in the value of sterling is going to impact on your spending power. But interest rates don’t stand still; they fluctuate all the time and a 10% “loss” today is not written in stone. The euro is not immune to falls either and could happen if EU recession returns or from Brexit contagion risk. A fall in the euro will counterbalance the sterling drop.

 

Since you can’t impact or even accurately time exchange rates, you need to concentrate on what you can do:  review your finances, especially if you have investment funds. You need to find 10% more spending power. Are you paying too much tax? Claiming all eligible social welfare benefits? Have you a spare room you could rent out via the tax-free Rent a Room Scheme or even AirBnB. Try to squeeze out more deposit interest you (see www.bonkers.ie for deposit rate comparisons). Could you get a part-time or casual job? Do you have stuff your could sell on Buy‘nSell, eBay or at your local car boot sale? Ever considered barter?  I know a retired accountant, a widower, who helps his family and friends (and their family and friends – word gets around)  prepare their tax returns in exchange for DIY jobs around his house, home cooked meals and baking that goes into his freezer. One ‘client’ even lends him their holiday apartment in Spain where he goes hill walking with his buddies every year.

 

Ends

 

 

Mr DR writes:  My girlfriend and I both have rented properties that are covering our repayments, and we are getting married in 2018. We both live at home with our parents and we are both working with a joint income of about €70,000.  I’m from a farming background and own a share of the farm and earn some farm income.  How favourable would a bank be to lend for a self-build on my own land, taking all this into account. Selling either of our houses would mean selling at a loss.

 

You don’t say how much you think it would cost to build your new home, but with a joint income of €70,000, under the new Central Bank rules, your mortgage limit would be €245,000. As existing owner you would have to produce a 20% downpayment on the total build price, or €49,000. However, the fact that both your properties are in negative equity and you are servicing two mortgages is not going to help your case, said Michael Dowling, a well known mortgage and financial adviser (www.mdowlingfinancialservices.ie).

According to Dowling the lender must stress-test their existing loans, even if they are cheap trackers, as well as any new one and the stress rate is between 5%-7%. “That alone might disqualify them from a new loan for their self-build.”He suggested that if you want to start the new build anytime soon, that you first pay off one of the existing negative equity houses with your existing (and ongoing) savings and then apply for a negative equity loan. Hopefully you will be in a position to start building your new home by your wedding day.

Next week:  More of your letters

Do you have a personal finance question for Jill?  Please write c/o this newspaper or by email to jill@jillkerby.ie

 

 

6 comment(s)

  1. sandawana oil on Aug 28 2017 09:12
    Order online now Powerful Sangoma | sandawana oil | sandawana skin | business | luck | wealth and get successful in life Sandawana Animal is a very rare animal, especially its fur/skin and oil has got unbelievable money powers from East Africa is available to make you rich than ever, you apply it every day, it will attract all the rich people to you so that you can do business with them . Apply when going for government tenders you will win . Apply when going to meet high rich people . Apply when going to start up a business or boosting it . Apply when going for business contracts ............. And more and more.................. It is the power of the oil that you command and it does what you commanded it to do. Email Me : quicklovespellsthatworks@gmail.com, your names, and date of birth for me to check if it'll work for you before you buy it I would want to know on what you want to use it for. Order online Call or whatsapp +27635620092 Email; quicklovespellsthatworks@gmail.com Visit; https://africanpowerfultraditionalhealer.wordpress.com/ Visit; https://about.me/sandawanaoil Visit; http://www.sandawanaoil.n.nu/ Visit; http://www.quicklovespellsthatworks.com
  2. WE OFFER ALL KIND OF LOANS
    We Offers Financial Consulting To Client, Companies Seeking Debt / Loan Financing And Seeking For Working Capital To Start A New Business Or To Expand Existing Business. Interested Parties Should Contact Us For More Information Through Via E-mail: SuiteCapitals@gmail.com ( SuiteCapitals@post.com ) Do You Need A Loan To Consolidate Your Debt At 1.0%? Or A Personal Loans * Business Loans etc. Interested Parties Should Contact Us For More Information Through Via E-mail: SuiteCapitals@gmail.com ( SuiteCapitals@post.com )
  3. Shareit on Dec 31 2018 11:35
    Amazing Information. I really Like it.
  4. uTorrent Pro on Dec 31 2018 11:37
    Thank for sharing this awesome post love to read this.
  5. youtube go on Dec 31 2018 11:38
    Your Article provides useful information for more details visit,
  6. australia writings on Jun 10 2019 12:07
    This is the work which happened in Northern Ireland and many people start working on it. I think students take time and do work on the research And some other good field.
Leave a comment
 

Subscribe to Blog