A finance guide for working life
Contents Introduction Planning your short, medium and long-term needs 3 4 Your needs - our solutions The freedom to enjoy your money Savings to help pay for the important things in life A home of your own Protecting what s important to you Planning a life after work How Bank of Ireland can help you Useful links 6 8 11 14 15 17 21
4 The best thing about going from studying to working is the money now that s real independence.
A finance guide for working life Introduction Introduction So, you ve graduated from college or you re lucky enough to be settled in a job that you love. What an exciting time it is as you start making your own decisions, looking at ways to have a great career and a great life! You ve worked hard to get here and now that you re earning, you want to be able to make your money work for you. Your hopes, ideas and goals have changed since your school or college days, so your approach to your finances is probably changing too. Money may still be tight during your first few years of work, but at Bank of Ireland, we are behind you every step of the way. You can rely on us to help you with your most important banking requirements and needs. And you can count on us to support you with your financial decisions in these early days, helping you make your money work harder for you. All our experience has gone into identifying a range of products and features that will help you provide for your short, medium and long-term needs. Within this brief guide, we hope to give you a clear picture of the financial demands you re likely to face while getting started in your new job or career - and the options we offer to help you to plan ahead. 3
A finance guide for working life Planning your short, medium and long term needs Planning your short, medium and long-term needs Laying the right foundation is the key to future financial success and this means identifying your short, medium and long-term goals and budgeting your money accordingly. Your short-term goals of less than five years might include paying off any legacy student debt; completing further education; buying a car or even opening your own business. I really had no idea how much everything costs Your medium-term goals might include buying your first home or getting married. Your long-term goals are likely to be centred around your retirement and life after work. 4
5
A finance guide for working life Your Needs - Our Solutions The freedom to enjoy your money Having a job is great because you ll be earning your own money. But it also brings many new financial responsibilities, from creating a budget for day-to-day costs (such as buying food or paying utility bills) to paying for a few things that go hand in hand with having a job. For example, you ll need appropriate clothes - maybe a few smart suits or perhaps overalls and work boots? Then there s the commute; how much will it cost you to get to work each week, will you go on the bus or do you need a car? Maybe you want to pursue further studies while working? And how about budgeting for a night or two out with your new workmates? If you want help calculating your budget, why not check out our Working Budget Planner at the back of this guide? 6 It goes without saying that it s not all about work at this stage of your life. You work hard for your money, so you want to enjoy spending at least some of it. At Bank of Ireland we have a range of current and savings accounts that will allow you the freedom to enjoy your money while also putting away a little nest egg for the future. There are terms and conditions that apply which we will give you up front. We have personal loan options if you need extra funds to buy a car or want to pay for further studies and we also have flexible credit cards and overdraft solutions. Credit cards are liable to annual Government stamp duty, currently 30 per account. An overdraft facility fee of 25 applies on negotiation and annual renewal (currently these charges do not apply to customers with Student, Graduate or Golden Years Current Accounts).
A finance guide for working life Your Needs - Our Solutions If you have graduated from college in the last two years, check out the Bank of Ireland Graduate Package, which has all the benefits of our 3rd level student account and some important extras. With a Bank of Ireland Affinity Credit Card, you get all the features that you would expect from a credit card, with the added bonus that your college will benefit, at no cost to you, when you open the account and every time you use the card. To find out about the Graduate Banking Package log on to www.bankofireland.com/current-accounts/graduatebanking/ Some guidance on our Credit Facilities: To apply for credit facilities, such as a credit card, Save to Borrow, personal loan, overdraft or mortgage you must be 18 or over. We apply lending criteria when you apply for a credit facility and we decide to approve applications for loans based on them. If we approve a loan (or other form of credit) for you, terms and conditions will apply but we will make sure you have these before you commit to the facility. With 365 online, you can view the latest balances and transactions on your accounts; manage your Bank of Ireland credit cards; pay bills; make online payments; set up, amend and cancel standing orders; view and cancel direct debits; and top up your mobile phone. Our new Mobile Banking App allows you to use our most popular 365 online services securely on your smart phone. You can check your balance, transfer funds, pay bills and access other useful services, wherever and whenever suits you. Getting started is easy simply download our App and log in using your 365 online log in information. And if you don t bank online, register now at www.bankofireland.com and then download our App. And that s it! You re ready to get mobile. Terms and conditions apply to Mobile Banking App and Bank of Ireland 365. Bank of Ireland 365, our online and phone banking service, offers you the convenience to do your day-to-day banking online or by phone, at any time or place that suits you. It s easier than ever to register for 365 online and phone banking; just log on to www.365online.com and fill out a short registration form. Warning: You may have to pay charges if you pay off a fixed rate loan early. Warning: If you do not meet the repayments on your credit agreement, your account will go into arrears. This may affect your credit rating which may limit your ability to access credit in the future. 7
A finance guide for working life Your Needs - Our Solutions Savings to help pay for the important things in life Saving money will help strengthen your finances, but we all know how hard it is to do. Starting early will give your savings the maximum opportunity to reach their potential and achieve your goals. If you spend within the limits of what you have on a monthly basis, you can use some of the spare cash to start saving. Every little counts and will all add up in the long term. Top tips to start saving If money is tight, you can start saving a small amount each month. Then, as your salary increases, you can gradually increase the amount you save. If you ve got enough spare cash, it s a good idea to build an emergency fund to cover the unexpected and big purchases. These savings can be used for a holiday, or to give you a financial cushion if you lose your job or have an unforeseen big expenditure. It ll also help you avoid getting into debt. 8
A finance guide for working life Your Needs - Our Solutions I was amazed at how quickly my savings mounted up If there is something specific you want to save up for, such as a house deposit, a new car or a holiday, why not consider the Save to Borrow account 1? It is designed to help you build up a savings habit and also help support a future borrowing requirement, if needed. Warning: You may have to pay charges if you pay off a fixed-rate loan early. 9
10
A finance guide for working life Your Needs - Our Solutions A home of your own Whether you are living at home or renting right now, one day you will probably be thinking about buying your own place. Many customers come in and talk to us about getting a mortgage, even if buying is some way off for them. Buying your first home is one of the biggest and most exciting decisions you will ever make, so it makes sense to do a bit of planning to make sure that, when the time is right for you, you are well prepared and ready to make the move. At Bank of Ireland we offer really competitive First Time Buyer Mortgages 2 and our expert Mortgage Advisers are available to guide you through the home buying process to make it really easy for you. One day I would like to own my own home but I have no idea how to go about doing it Warning: If you do not keep up your repayments, you may lose your home. 11
TOP TIPS: Before you purchase your first home 1. Start to save for your deposit and other initial costs The first thing you need to think about is getting a deposit together. And if you re serious about buying a property, then you must be serious about cutting other expenses like holidays and cars for a while. 2. The bigger your deposit, the less you ll need to borrow You should aim to save at least 10% of the purchase price to put down as a deposit. There may be one-off expenses involved when buying a home and moving, (stamp duty, legal fees, a valuation report or a surveyor s report) so you need to set money aside for these also. 3. Make an appointment with a Bank of Ireland Mortgage Adviser Book an appointment with a Mortgage Adviser for a personal quote. They can assist and guide you through the application process. 4. Make sure your dayto-day finances are in order To help get yourself on track for taking on a mortgage, you should start to keep a closer eye on the day-today running of your finances and spending. By making a few small changes every month, you could save time and money and get yourself on the road to taking on a mortgage. 5. Decide on your loan amount Use the Bank of Ireland Mortgage Repayment Calculator on: www.bankofireland.com/ mortgages to work out the repayments for different amounts. What you can comfortably afford to repay each month will help you determine your loan amount. 6. Decide where you want to live It s important to know if your selected areas offer you the lifestyle you want, especially if this is your forever house. Does it have public transport, access to schools, etc? Register with several estate agents and use the internet, an invaluable research tool. Remember, the more homes you view, the more likely you are to find the right home for you - at the right price. 12
TOP TIPS: Purchasing your first home 1. Survey the property 2. Make an offer 3. Instruct a solicitor All lenders require a basic valuation, but we recommend that you also have an independent survey carried out to pick up any problems that you may not have noticed yourself. Make sure you are clear about what your offer includes. If it is subject to conditions, state what they are. If your offer is for the property, including carpets and curtains, say so. Otherwise you may find you are asked to pay an additional sum for these later on if you want them. We recommend you choose and instruct your solicitor well before your offer is accepted. Your solicitor will receive contracts from the vendor s solicitor together with evidence of title to the property. 4. A formal mortgage offer is made 5. A contract is agreed 6. Title Deed Your lender will finalise your mortgage application and normally send you, your solicitor and your Mortgage Adviser an Offer Letter, which you must sign and return when you have taken advice from your solicitor on its content. When your solicitor is satisfied in relation to the contract and title and other matters such as planning, you will sign the contract and pay a deposit. The contract is then sent back to the vendor s solicitors and when the vendor has signed it and returned one signed copy to your solicitor, a legally binding agreement is in place and both you and the vendor are now committed to buying/ selling the property. When your solicitor has complied with all the lender s legal requirements and carried out the necessary legal searches, he/she will then arrange for completion. He/she will have you sign the relevant Deed transferring the property and will also arrange for you to pay all outstanding fees, including stamp duty, where relevant, Land Registry/Registry of Deeds fees and their own fees. 13
A finance guide for working life Your Needs - Our Solutions Protecting what s important to you Insurance is important if you have assets you need to protect - like your home, its contents, a car, electronic equipment etc. Accidents and disasters can and do happen, and if you aren t adequately insured, it could leave you in financial difficulty. And don t forget that your income is now probably your most important asset. It pays for everything from what s in your fridge to where you go on holiday. It also requires protecting; what would happen if you got seriously ill and were unable to work? How long would your employer continue to pay your salary? What about if you are self-employed? Your income dictates the kind of lifestyle you have - that s why you need to protect it. A Life Choice Income plan from Bank of Ireland Life 3 can provide you with a replacement income for a period of time if you are unable to work because of ill health. Terms and conditions apply. Why not come in and talk to an Insurance and Investments Manager who can help you plan and protect your future? 14
A finance guide for working life Your Needs - Our Solutions Planning a life after work Retirement may seem like decades away and you can t even begin to think about it. But in fact, the sooner you start to prepare, the better off you ll be. And the younger you are, the cheaper it is to save for your retirement. With fewer employers offering full pension plans and the changes to Social Welfare, it has become more important than ever to save and plan for your own retirement. To find out how we can help you achieve the retirement you want, come in to your local Bank of Ireland branch and meet an Insurance and Investments Manager who will help you make the most of your savings with tax relief available on your pension contribution. They can review where you are today and tailor a pension savings plan 3 that works for you. 15
16
A finance guide for working life How Bank of Ireland can help you How Bank of Ireland can help you We know it can be overwhelming to think about all these new financial needs and how they affect your life. If you want to talk with us about any of your financial needs, you can come in to your local Bank of Ireland branch and speak with a Financial Adviser, or simply phone us to have a chat about your needs or check out our advice and offerings on www.bankofireland.com. We will consider your individual situation and preferences to create a plan to help maximise your income and protect your savings. A financial adviser can help you select the right set of products to help you cover all your payments, invest for the future and your retirement, and finance your own home. Putting the right plan in place now will help ensure you achieve your financial goals. Talk to us today www.bankofireland.com 17
YOUR WORKING BUDGET PLANNER Weekly Monthly Total Clothing Suits Shoes/Boots Shirts Bag/Briefcase Other Other Other Other Commuting Public Transport Petrol Parking Other Eating/Entertaining Weekly Groceries Take-away Sandwiches Coffee Breaks Lunch Out Evening Out Other All Other Living Expenses Rent Concert/Gigs Mobile Phone Utility Bills Other 18
A finance guide for working life Terms & Conditions Footnotes 1. Save to Borrow Approval of loan applications is not guaranteed. Only regular savings will be considered in determining the loan multiple. Lump sum deposits will not be factored in. In the event that you take out a Save to Borrow loan at any time, a deposit lien may be placed on some or all of your deposit as security for the loan. The amount of the deposit lien will depend on the amount you borrow, and is at the Bank s absolute discretion. The deposit lien will prevent cash withdrawals for the portion of your cash deposit under lien, and will be held for the life of the loan. Once the loan is repaid in full, the deposit lien will be removed. Terms and conditions apply to the Save to Borrow deposit account. Interest is subject to Deposit Interest Retention Tax (DIRT) at the prevailing rate. This invitation may be amended or withdrawn at any stage at the discretion of the Bank. 2. Bank of Ireland Mortgages Lending criteria and terms and conditions apply. Security and insurance required. The maximum mortgage is normally 90% of the property value. As a general rule, mortgage amounts up to a maximum of 4.75 times an individual s gross annual income are considered and will vary according to individual circumstances. A typical variable rate mortgage of 100,000 over 20 years costs 623.20 per month (Annual Percentage Rate (APR) 4.4%). The cost of your monthly repayments may increase. A 1% interest rate rise will increase this repayment to 677.55 (APR 5.4%). This is an increase of 54.35 per month. Information correct as at the 31st August 2012. Bank of Ireland Mortgage Bank is a member of Bank of Ireland Group. Bank of Ireland and Bank of Ireland Mortgage Bank, trading as Bank of Ireland Mortgages are regulated by the Central Bank of Ireland. 3. Life assurance, savings, investment and pension products are provided by New Ireland Assurance Company plc trading as Bank of Ireland Life. Terms and conditions apply. Benefits may be subject to underwriting and acceptance by Bank of Ireland Life. Where relevant life assurance, tax applies, it is important to note for pensions that tax relief is not automatically granted and Revenue conditions apply. Bank of Ireland Life is a trading name of New Ireland Assurance Company plc. New Ireland Assurance Company plc trading as Bank of Ireland Life is regulated by the Central Bank of Ireland. A member of Bank of Ireland Group. Bank of Ireland Insurance & Investments Limited is regulated by the Central Bank of Ireland. Bank of Ireland Insurance & Investments Limited is a tied agent of New Ireland Assurance Company plc and is a member of Bank of Ireland Group. 19
A finance guide for working life Consumer Credit Notices and Valuation Regulatory notices Arrears If you do not pay us a repayment instalment or other sum of money by the date you were due to pay it, we will charge you a default interest rate of 0.5% per month or part of a month (which is 6% per annum) on the unpaid sum. We will charge you a minimum of 2.54 per month or part of a month. This default interest is added to normal interest. We do no charge borrowers default interest when they are both (a) in a Mortgage Arrears Resolution Process under the Central Bank s Code of Conduct on Mortgage Arrears; and (b) are co-operating reasonably and honestly with us. Fees and Costs The Bank requires that a valuation be carried out by a valuer acceptable to the Bank (see below) and that the appropriate fee be paid by you directly to the valuer. The amount of the fee will be determined by reference to the value of the property, and if a loan agreement with you is withdrawn, this fee may be refunded. Legal fees (excluding costs associated with the Bank s legal investigation of title for the purpose of the mortgage) are payable by the borrower to his or her solicitor. The amount will depend upon the arrangement made between these parties. Where security is perfected in house by the Bank, a security perfection charge of 400 is payable by the borrower. The following additional costs will be payable by the borrower for buy to let properties and principal dwelling housing whereby loan amount is 1.5m or over: 1. The borrower must reimburse the Bank for the legal costs incurred by the Lender in effecting the Lender s Security and related tasks (excluding costs associated with the Bank s legal investigation of title for the purpose of the mortgage): 2. The outlay and fees payable to state agencies for the registration of the Lender s Security, which must be remitted to the borrower s solicitor. The Lender s legal costs to be reimbursed by the Borrower are the following: a. The Lender s solicitor s professional fee of 950 plus Value Added Tax per property b. Outlay and fees payable to state agencies for the registration of the Lender s Security which shall not exceed 300 per property. The Lender s legal costs, once paid by the Borrower, are not refundable. Typically, these must be paid at closing of the transaction. Valuation The bank requires that a valuation be carried out on the property(ies) offered as security. This valuation must be completed by a valuer acceptable to the Bank and any such valuation or report remains the property of the Bank. No responsibility whatsoever is implied or accepted or warranty given by the Bank for the value or condition of the property by reason of such valuation. You are strongly recommended to arrange an independent valuation and structural survey of the property(ies). You are responsible for the payment of the valuation fee. If the loan is refused then the valuation fee may be refunded to you. Please note that a valuation report should only be arranged after you have received a Loan Offer. You are entitled to your own copy of the valuation report. Regulatory Bank of Ireland and Bank of Ireland Mortgages are tied agents of New Ireland Assurance Company plc. trading as Bank of Ireland Life. The Governor and Company of the Bank of Ireland and Bank of Ireland Mortgage Bank trading as Bank of Ireland Mortgages are regulated by the Central Bank of Ireland. Bank of Ireland Mortgage Bank is a member of the Bank of Ireland Group. If you repay your mortgage loan early when you are on a variable rate of interest, we charge no redemption fee. If you repay your mortgage loan when you are on a fixed rate of interest, it is likely we will suffer a funding loss. If we suffer such a loss you must pay us compensation when we ask you to pay it. Such compensation will be equal to C where: C = A x (R%-R1%) x D and 365 A = the amount repaid early (or the amount which is changed from the fixed rate to a new rate) averaged from the date of early repayment (or rate change) to the end of the fixed rate period to allow for scheduled repayments (if there are any) and interest charges. R% = the annual percentage interest rate which was the cost to us of funding an amount equal to A for the originally intended fixed rate period. R1% = the annual percentage interest rate available to us for a deposit of an amount equal to A for a period equal to D. D = the number of days from the date of early repayment (or rate change) to the end of the fixed period. Here is a worked example:- Amount = 250,000 R = 5 % R1 = 3% D = 2 years or 730 days C = 250,000 x (5%-3%) x 730 365 So, C = 250,000 x 2% x 730 365 C = 10,000. 20
A finance guide for working life Useful links Useful links Convenient 24 hour banking Bank of Ireland on line banking www.365online.com Bank of Ireland website www.bankofireland.com Bank of Ireland 365 phone: 0818 365 365 Buying a home www.myhome.ie www.citizensinformation.ie www.daft.ie Life insurance, pensions, investments www.bankofirelandlife.com Getting your taxes in order Revenue deal with all taxes, including personal income tax. The site contains the text of their individual leaflets as well as a wealth of additional information. Revenue Commissioners www.revenue.ie Advice on budgeting MABS provides free and confidential advice, assistance and support to people experiencing financial difficulty. Money Advice and Budgeting Services www.mabs.ie National Consumer Agency For consumer information on financial products and services, go to www.itsyourmoney.ie 21
We have taken care in preparing the content of this brochure but we intend only to give you general guidance on how you can best deal with us. This brochure does not contain any legal or other advice. We strongly recommend that you get appropriate tax, legal or other professional advice before making any decision. Bank of Ireland is not responsible for the content of third party websites. Bank of Ireland is regulated by the Central Bank of Ireland. 22