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MONEY WE NEED MORE CONSUMER-FRIENDLY MORTGAGES, PARTICULARLY LONG-TERM FIXED INTEREST RATES Rachel Doyle, Professional Insurance Brokers Association CURRENT ACCOUNTS Institution ATM fee POS 1 fee Quarterly fee Ulster Bank €0.00 €0.00 €12.00 Permanent TSB €0.00 €0.00 €12.00 KBC Bank €0.30 €0.00 €6.00 Bank of Ireland €0.25 €0.10 €5.00 AIB Bank €0.35 €0.20 €4.50 1Point-of-sale or debit card purchases CREDIT CARDS BEST BALANCE TRANSFERS Card Disc Rate Until Contact KBC Bank 0.00% 6 months 1800 51 52 53 Permanent TSB 0.00% 6 months 1890 500 121 Tesco 0.00% 6 months 1800 555 743 BEST STANDARD RATES Card Rate Interest free Contact AIB Click 13.60% 1 56 days aib.ie Bank of Ireland 17.30% 2 56 days 0818 200 334 KBC Bank 18.25% 56 days 1800 51 52 53 1 AIB internet banking customers only 2Annual fee of €76.18 Source: Bonkers.ie HOME ENERGY THE BEST LOANS Lender Rate 1 Monthly payment Contact Bank of Ireland 7.50% 2 €398.44 0818 200 334 KBC Bank 9.80% 2 €418.96 1800 51 52 53 AIB Bank 9.99% €420.56 1890 724 724 Ulster Bank 10.30% €423.37 1890 303 004 1 Based on €20,000 borrowed over five years ²Current account customers only Company Fuel Av. Annual Bill¹ Energia Electricity only €1,043 Flogas Gas only €798 Energia Dual fuel €1,855 ¹Online billing and payment by direct debit required. Prices are based on average annual use of 13,800kWh gas, 5,300kWh electricity Source: Bonkers.ie MORTGAGES BEST FIXED RATES — MOVERS/SWITCHERS Institution Rate Term Contact Mortgage Store 3.50% 1 2 years mortgagestore.ie Ulster Bank 3.30% 2 3 years 1800 303 004 Ulster Bank 3.50% 2 5 years 1800 303 004 Ulster Bank 3.60% 2 7 years 1800 303 004 1 20% deposit 2 40% deposit BEST FIXED RATES — FIRST-TIME BUYERS Institution Rate Term Contact AIB Bank 3.60% 1 2 years 1890 724 724 KBC Bank 3.60% 1, 2 2 years 1800 51 52 53 AIB Bank 3.65% 1 3 years 1890 724 724 KBC Bank 3.65% 1, 2 3 years 1800 51 52 53 1 10% deposit 2 New customers only with KBC current accounts BEST VARIABLE RATES — MOVERS/SWITCHERS Institution Rate Deposit Contact EBS 3.30% 1 50% 1850 654321 AIB Bank 3.35% 1 50% 1890 724 724 Haven 3.35% 1 50% broker KBC Bank 3.50% 2 40% 1800 51 52 53 1 From October 1 2 New customers only with KBC current accounts BEST VARIABLE RATES — FIRST-TIME BUYERS Institution Rate Deposit Contact EBS 3.70% 1 10% 1850 654321 AIB Bank 3.75% 1 10% 1890 724 724 Haven 3.75% 1 10% broker 1 From October 1 HEALTH INSURANCE TOP HEALTH INSURANCE PLANS Insurer Plan Monthly cost Contact Public hospitals — basic cover GloHealth Base Lite €32.83 1 1890 781 781 VHI Start Plan €37.42 1890 444 444 Laya Assure Vitality €42.83 1890 700 890 Private hospitals — semi-private room GloHealth Net More 100 €74.17 2 1890 781 781 VHI One Plan 150 €74.31 2 1890 444 444 Aviva Select Plus €79.55 2 1890 717 717 1 No direct settlement on this plan 2 No cover for day-to-day medical expenses Prices are for individual adults and reflect changes to tax relief. Laya rates include a 3% charge for monthly payments Source: TotalHealthCover.ie Best Buys Airlines and car hire firms accounted for almost 40% of complaints handled last year by European Consumer Centre Ireland (ECC Ireland), which helps consumers with disputes arising from goods and services bought in another European country. Most of the complaints were made by foreigners against Irish airlines and car rental companies. WHAT ARE MY RIGHTS? Under EU law, airlines must pay compensation if passengers arrive at their destinations three or more hours later than scheduled. The amount depends on the distance travelled: €250 per person for short hops (say Dublin to Brussels); €400 for medium-haul flights (Cork to Rome, for example); and €600 for long-haul trips such as Shannon to New York. Airlines can refuse payment only if the delay was the result of an “extraordinary circumstance” beyond their control, such as a security threat, industrial action or extreme weather. However, carriers have repeatedly refused or delayed payments, challenging the EU regulations in court. Compensation is not paid automatically; each passenger must claim. You can claim compensation if you fly from an airport within the EU or travel with an airline that has its head office in the EU and you are due to land at an EU airport. For example, an Etihad flight from Dublin to Abu Dhabi would be covered by the regulations because it leaves from a European airport, but an Etihad trip from Abu Dhabi to Dublin would not. HOW DO I CLAIM? If an airline refuses compensation, you should complain to the enforcement body in the country from where the delayed flight was due to depart. If the flight was from Dublin to Malaga, for example, complaints should be made to Ireland’s Commission for Aviation Regulation. If the delay was on the return flight, you should complain to the equivalent body in Spain. One of the complaints handled by ECC Ireland came from a woman pursuing an Irish airline, believed to be Ryanair, for compensation awarded by Poland’s aviation regulator. It had overruled the airline’s claim that compensation was not payable on the basis that “extraordinary circumstances” were responsible for a delay of almost six hours on the woman’s flight from Gdansk to London Stansted. HOW LONG DO I HAVE TO CLAIM? The European rules do not stipulate how many years passengers have to claim compensation for a delay. They say the law of each country will apply. Britain’s Supreme Court decided last year that claims could be made for up to six years after a delay. While the ruling affects only passengers departing from UK airports, Aer Lingus has confirmed that it will change its policy to give the same rights to passengers on its flights from Ireland. WHAT ABOUT CAR RENTAL? Most complaints relate to charges for alleged damage that appear on customers’ credit card statements after returning a rental car. ECC Ireland is concerned that the charges can be based on estimates, with no evidence that the repairs were ever made. It advises consumers to demand a check-out report confirming that a car was returned in good condition, but acknowledges that this can be difficult to obtain in practice. TOP TIP While ECC Ireland provides a useful service for resolving cross-border disputes, it is powerless if businesses against which claims are made refuse to co-operate. The only option in these circumstances is for consumers to take legal action in the country where the business is located, which is usually impractical unless a lot of money is at stake. NIALL BRADY MONEY MADE EASY YOUR FIVE MINUTE GUIDE TO... TRAVEL DISPUTES SAVINGS EASY ACCESS Institution Rate Min deposit Contact RaboDirect 1.25% 1 €1 rabodirect.ie KBC Bank 1.25% 2 €3,000 1800 51 52 53 Nationwide UK 1.01% 3 €2,000 1800 800 310 1 0.5% over €50,000. 2 0.5% over €100,000 3 Six free withdrawals NOTICE ACCOUNTS Institution Rate Notice Contact RaboDirect 1.45% 1 90 days rabodirect.ie RaboDirect 1.25% 1 30 days rabodirect.ie Nationwide UK 1.02% 2 30 days 1800 800 310 1 Min €1 2 Min €2.000 DIRT FREE Institution Rate Term Contact State Savings 2.26% 10 years 1850 30 50 60 State Savings 1.24% 5.5 years 1850 30 50 60 State Savings 0.99% 4 years 1850 30 50 60 FIXED RATES Institution Annual Rate Term Contact KBC Bank 1.20% 1 12 or 14 months 1800 51 52 53 KBC Bank 1.10% 1 18 months 1800 51 52 53 Nationwide UK 1.10% 1 24 months 1800 800 310 1 Min €3,000 MONTHLY SAVERS Institution Rate Max monthly Contact Nationwide UK 4.00% €1,000 1800 800 310 KBC Bank 3.00% €1,000 1800 51 52 53 EBS 2.25% €1,000 1850 654321 T he broadcaster George Hook reckons buying shares is a form of gambling: “I don’t back horses and so I don’t buy shares.” Hook is wrong. There is a fundamental difference between the two. The average gambler may hit the occasional lucky streak but is a sure loser in the long run. The average share buyer should make a profit, provided they have a reasonable spread of investments and a sufficiently long investment horizon. Five years is the generally recommended minimum, probably because that was the normal length of an economic cycle — when economic cycles were normal. Nevertheless, some shares are suitable only for gamblers and should be avoided by anyone seeking a good night’s sleep. I am normally cautious when buying shares but I have gambled occasionally, and have generally regretted it. Applying George Hook’s horseracing analogy, I have backed some nags that are still running. One of my worst experiences started with a January 2013 decision to buy shares in a company called Carclo on foot of a recommendation in, of all places, the Financial Times, the finance person’s pink bible. According to the FT’s columnist, Carclo had a good story to tell. It was a unique player in the world of mobile phones and small computer monitors; it had perfected a technique for printing thin metal lines, invisible to the naked eye, on special film. Without producing any numbers, the columnist claimed the share price had a good chance of doubling over the next 12 to 18 months. Foolishly, I believed his story without checking the numbers. The share price, far from doubling, halved, and then halved again. I finally sold the shares in November 2014 at less than a quarter of what they had cost me. The only consolation was that the amount invested was less than I normally venture. One lesson learnt from that debacle was not to invest in a share that tells a good story but where the promise of great profits has no justification, or can be justified only based on heroic assumptions for future growth. I resolved to avoid high-risk shares in future. My resolve was strengthened by some recent findings in behavioural finance. This relatively new area of study recognises that none of us, not even supposedly super-rational investors, behaves rationally all the time. In fact, investors sometimes behave quite irrationally. Classic finance theory, which assumes that everyone behaves rationally, says that, on average, risky investments should generate a higher return in the long term. That is no more than common sense — otherwise, why would anyone ever bother taking a risk? We would be just as well off putting our money in the piggy-bank. Things aren’t that simple, though. At very high levels of risk, it seems that investors tend to behave more like gamblers. A number of possible reasons have been adduced for this, one of which is called “lottery preferences” and works as follows: none of us is stupid enough to pay €1 to get back just 50c yet hundreds of thousands of us do precisely that on a regular basis, but in the guise of buying Lotto tickets where the individual punter may hit lucky but the overall payout ratio is not far off 50c in the euro. Much the same phenomenon manifests itself in high-risk shares: the possibility of the occasional jackpot lures investors into overpaying. In the light of this painful experience, I also resolved only to buy shares that I had researched carefully myself and not to put my trust in tips, even if they came from a respected source. I hope to share some of that research with readers, so that you can make your own assessment of a share’s worth. I recognise that my newfound resolve to stay on the straight and narrow path of investment righteousness means that I won’t profit from the next hot stock to take the investment world by storm but, by the same token, I hope to avoid the financial pain and indignity of another Carclo. If the behavioural finance theorists are right, I’ll also earn a higher return on my investments as a reward for my virtue. In the next column, I plan to tell of a much happier experience with a company that — in my opinion, of course — is worth far more than the value placed on it by the market. Such discoveries are the stock-picker’s equivalent of the Holy Grail. Colm Fagan is an active private investor. He is a retired actuary and a non-executive director of a number of financial institutions The stock market may have the reputation as a rich man’s lottery but risky stocks can be avoided in favour of long-term gains WITH HIGH-RISK SHARES, THE POSSIBILITY OF THE OCCASIONAL JACKPOT LURES INVESTORS INTO OVERPAYING COLM FAGAN DIARY OF A PRIVATE INVESTOR How to make shares less of a gamble A rational, long-term approach can stop the sensible investor losing sleep over any unexpected losses from buying the latest hot stocks on the market GETTY 12
