IT will take some time before the effects of Budget 2011 sink in. I expect the vast majority of us will only really feel the pinch at the end of January when not only will the effects of social welfare cuts be felt by recipients, but when the new 11% (total) Universal Social Charge and higher PRSI rates (if you earn more than €75,000 or are self-employed) kick in.
Money Express with Jill Kerby
You can check how the tax/PRSI/ USC changes will affect you here, in the budget annexes: www.budget.gov.ie/budgets. In the tables section, find your income category – say, 'married couple, two children' or 'single person' or 'pension', scroll down the left hand column to your income level and then work your way across the columns to where it shows the total amount of new tax/social insurance charge you will pay in 2011. Most people should expect at least a 4% drop in income next year.
How you will cope with the loss of income is another thing.
One company that was set up a couple of years to help households of every income level cope with the onset of the Great Recession is Bonkers.ie a financial price comparison site. I had a chance to meet its managing director, Dave Kerr last Wednesday when we shared a panel answering viewer's Budget questions on RTE's The Afternoon Show and The Daily Show.
Bonkers.ie has produced a list of savings that should offset the average family's losses:
"An average family with two kids and a €45,000 salary will lose €60 per month from their income," says Kerr. "Spending just 40 minutes on household finances can help consumers claw some of that money back." Here are his top tips.
Switching Gas Suppliers - €8 per month savings: An average household spending €727 per year on the Bord Gis standard tariff could save €92 per year by switching to the Flogas standard deal.
Saving on the cost of Electricity - €10 per month savings: Switching to the best deals from Bord Gis or Airtricity will save the average household €116 over the course of a year.
Credit Cards - €24 per month savings: For customers with good credit, it makes sense to switch balances to a new card. Switching a typical Irish balance of €1,246 to a six month 0% introductory offer could net €141 in savings over six months.
Current Accounts - €8 per month savings: Switching to a no-fee current account could save up to €72 per year. There are even rules to make the switch as straightforward as possible.
Home Communications - €20 per month savings: Many consumers are still getting phone and broadband services from separate providers, and paying line rental. Costs for broadband and home phone can be reduced by over €20 per month, with some bundles offering broadband, home phone and free call bundles for as little as €30.
Mobile Phones - €15 per month – per phone – savings: There are now eight mobile phone suppliers operating in Ireland offering the greatest choice ever (and possibly greater confusion than ever) to Irish consumers. Costs and plans vary widely, but a basic bill-pay plan with 175 call minutes and 100 texts can be had for as little as €20 per month or as much as €35. Choosing the best bill-pay plan can save €15 per month - or much more depending on customers' needs.
Savings: Easy access accounts and strong interest rates of up to 3.0% are still available from responsible institutions (like Nationwide UK Ireland, NIB and RaboDirect), with good credit ratings.
You can compare many of these costs on the www.bonkers.ie site.
Meanwhile, contact a good fee-based broker or advisor to try and cut back on big ticket health, life, car and home insurance deals. Brokers that I speak to regularly insist they can save new clients at least 10% off their existing contracts, at least for the first year.
They do this partly by sharing their commission, but also by their insider knowledge about the terms and conditions in contracts. "Most people don't understand what they're buying and how increasing the excess or even just correcting things like the replacement value of their house or car can reduce the premium," one general insurance broker said told me last week.
Finally, remember you have until the end of this year to lock in your health insurance at 2010 rates, says specialist health insurer advisor, Dermott Goode (www.healthinsurancesavings.ie).
According to Goode, renewing now or switching to a more competitive health insurance plan before they increase their rates in the New Year "can save you hundreds of euro, especially if you lock in the 'corporate' rate which under our community rating regulations, is available to everyone, not just business customers."
VHI customers in particular, he said, should be aware that the state owned insurer is in serious financial difficulty and is in a contractual dispute with a number of private hospitals like the Blackrock Clinic, Mater Private, Hermitage, BonSecours, Galway Clinic and Cork Clinic.
Goode says VHI customers who want to avoid the risk of having to pay a substantial part of their costs at any of these hospitals may want to consider shifting to Aviva or Quinn Healthcare.
Get better healthcare for less in Offaly. Call Aviva at
057 86 95300