The following is a summary of the positions taken by each of the Life Offices in respect of the 'new' 1% Levy on Protection/Pension/Investment/Savings policies, as at 30/07/2009.
Standard Life
The levy will be deducted from any premiums invested into Standard Life savings and investments policies on or after 1 April 2010.
Standard Life will continue to absorb the cost of the levy on premiums paid on protection policies. Updated 30/03/2010
Eagle Star Zurich
Will be collecting the 1% premium levy from 1st August 2009 on all protection and group risk policies.
For new ( Self-employed Pensions(RACs),PRSAs, ARFs, Annuities, Personal Buy-Out-Bonds, Investment and Savings contracts) business transacted after 1st of August, they will meet the cost of the 1% premium levy for premiums paid in August on any new business (including single premium top-ups) that are introduced before 1st September. They will not make any retrospective charge for such payments regardless of how the IIF proposals are received. They will review the situation in the coming weeks and will advise if this interim approach is to continue for September.
The 1% Levy applies to regular contributions to savings plans with effect from 01/07/2010. Levy applies to Single Premium Investments from 01/09/2010. Updated 13/09/2010
For existing ( Self-employed Pensions, PRSAs and Savings) business they intend to defer applying the 1% premium levy on these contracts pending the conclusion of discussions with the Department of Finance. Given the uncertainty as to what changes to the levy might be made as a result of these discussions, they reserve the right to deduct outstanding levies from the contracts when and if it is appropriate to do so.
Quinn Life
As part of Quinn Life's 10th anniversary celebrations, Quinn Life will cover the cost the levy for new and existing investments and savings business for their customers in 2010. Updated 02/03/2010
Caledonian Life
If a client has a Regular Premium protection policy (for example payable monthly or annually) their payment will increase by 1% from 1st August. If a client makes their payment by direct debit their payment will increase automatically. If a client makes their payment by other methods, Caledonian Life we will notify them of the increased payment in their next renewal notice.
The levy does not apply to existing Single Premium Investments. However, the levy will apply to all top-ups to existing policies and all new policies taken out from 1st August. 1% of any single premium received by us from 1st August will be deducted for the levy and paid to Revenue.
Irish Life
Irish Life implemented the Government levy for protection plans on the 01 August 2009.Protection plans include life cover, mortgage protection plans and plans which pay an amount on disability or the diagnosis of a specified illness.
This levy will also be introduced on Savings plans from the 01 February and on new investment plans from 01 March 2010. Updated 30/03/2010
Hibernian Aviva
Hibernian Aviva will apply the levy on all protection policies from August 1.
Pending the outcome of industry discussions with the Department of Finance, Hibernian Aviva will not apply the 1% levy to pension and investment products while the discussions with the Department continue. Hibernian Aviva will review this position when they have greater clarity.
Hibernian Aviva will not apply the 1% levy retrospectively to premiums for pension and investment business received during this period. Therefore, we will not be going back to customers to apply the levy to pension or investment premiums already paid.
Friends First
For Executive Pension, Group Defined Benefit and Defined Contribution Schemes no levy will apply.
For Individual Protection, Group Protection and PRSA type contracts; pending outcome from Revenue, the Levy will only be collected from 1st January 2010
For Single Premium Pensions, Investments, ARFs and Buy-Out-Bonds; pending outcome from Revenue, the Levy will only be collected from clarification date. There will be no retrospective collection.
For Regular Premium Pensions, Savings and Life Insurance; pending the outcome from Revenue the Levy will be collected retrospectively to 1st August 2009.
New Ireland
Will collect the additional 1% of the premium from customers on the following policies with effect from 1st of August: life cover policies,mortgage protection policies and policies which pay an amount on a specified illness or on disability.
They are deferring collecting the levy for investment and pension customers pending the outcome of discussions with the Department of Finance.
Canada Life
Protection Business - The levy will be applied with effect from 1st August 2009
Existing Pension & Investment Business - Since August 2009 Canada Life has been applying the levy in arrears on existing savings and investment policies. However, from April 2010 Canada Life will collect the new 1% levy as part of a policyholder's existing payment method by adding it to their premium. In addition, Canada Life will begin to apply the levy on certain policies which it has exempted from the levy up until now.
Letters informing savings and investment policyholders of the changes to their policies, as well as a list of frequently asked questions, have been posted this week. Meanwhile, all new and existing pension clients will receive a letter later in the month to inform them that the 1% levy no longer applies to pensions (as per the Finance Act 2010) and that the levy is no longer being applied to their policies. Updated 09/03/2010
NB : Some types of group pension schemes are exempt from the
Levy.
Update 17/02/2010
The 1% Levy is being collected by all Life Offices for Protection Policies(Mortgage Protection, Term Insurance, PHI etc.)
The 1% Levy will not apply to Pension Policies.
Some Life Offices are collecting the 1% Levy on Savings & Investment Policies and others are planning to do so shortly.
If you are currently planning to Invest a Lump Sum in a Unit-Linked Investment Bond you should check with the product provider as to whether the levy will apply to you.
As of 30/03/2010, the 1% Levy on the product available through www.InvestAndSave.ie is being absorbed by the Life Offices and we will not make any retrospective charge to you for such payments.
Update 24th November 2011
With immediate effect, there will be no 1% Levy on contributions to the InvestAndSave product, for the duration of the contract, provided that the minimum Single and Regular payments are made. This applies to business transacted from 24th November 2011, or business that is currently in the pipeline but has not yet been issued.
So, if you invest €5,000 (or more) as a Single contribution and €100 (or more) per month as a Regular contribution you will avoid the Government Levy of 1% on all contributions.
If you invest a Single contribution only, the levy will apply to this payment.
There are no entry or exit charges on this product. You can choose to invest in any of the 17 Actively Managed and 13 Passive Funds available. The annual management charge on these funds is 1%pa.
Thursday, July 30, 2009
Monday, July 20, 2009
1% Levy on Life Assurance & Pension Products
The 1st of August is almost upon us and the introduction of the new 1% Levy on payments to Life Insurance & Pension products is still in a bit of disarray. What is certain, is that from that date the 1% (of each new premium) will apply to individual life insurance 'protection' policies (Mortgage Protection, Term Insurance, PHI etc.). However, the 1% Levy on all new contributions to Pension/PRSA and Investment/Savings products remains a bit of a mystery.
On Friday I received confirmation from Irish Life that they are proposing to 'absorb' the cost of the 1%, to consumers, on Pension/PRSA & Investment/Savings contributions until further notice. It would appear that they, and other members of the Insurance Industry Federation, are in negotiations with the Department of Finance to try and come up with a better solution to this additional 'tax' on savings.
It is my understanding that all Life Offices acknowledge that the Government needs to raise additional revenue; but the levy on savings type products, in its current form, is not workable.
I would hope that the rest of the Life Offices operating in Ireland will adopt a similar approach to Irish Life, as I do not see the Levy as being a major revenue spinner for the Government in the immediate future. Indeed, judging by the levels of contributions to these type policies year to date, I doubt that it would be a hefty burden to bear by any well managed Life Office, from now until December.
A more practical, and probably easier to administer, approach would be to take a nominal tax on the funds under management of each Life Office. Whether this 'tax' would be passed on to the consumer, in the form of an increase in Annual Management Charges, remains to be seen.
As an industry practitioner, I don't go along with these additional taxes on savings. Without savings; there is no future. The Government should be abundantly aware of this predicament.
Update 17/02/2010
The 1% Levy is being collected by all Life Offices for Protection Policies(Mortgage Protection, Term Insurance, PHI etc.)
The 1% Levy will not apply to Pension Policies.
Some Life Offices are collecting the 1% Levy on Savings & Investment Policies and others are planning to do so shortly.
If you are currently planning to Invest a Lump Sum in a Unit-Linked Investment Bond you should check with the product provider as to whether the levy will apply to you.
As of today, the 1% Levy on the products available through www.InvestAndSave.ie and www.Bond.ie is being absorbed by the Life Offices and we will not make any retrospective charge to you for such payments.
On Friday I received confirmation from Irish Life that they are proposing to 'absorb' the cost of the 1%, to consumers, on Pension/PRSA & Investment/Savings contributions until further notice. It would appear that they, and other members of the Insurance Industry Federation, are in negotiations with the Department of Finance to try and come up with a better solution to this additional 'tax' on savings.
It is my understanding that all Life Offices acknowledge that the Government needs to raise additional revenue; but the levy on savings type products, in its current form, is not workable.
I would hope that the rest of the Life Offices operating in Ireland will adopt a similar approach to Irish Life, as I do not see the Levy as being a major revenue spinner for the Government in the immediate future. Indeed, judging by the levels of contributions to these type policies year to date, I doubt that it would be a hefty burden to bear by any well managed Life Office, from now until December.
A more practical, and probably easier to administer, approach would be to take a nominal tax on the funds under management of each Life Office. Whether this 'tax' would be passed on to the consumer, in the form of an increase in Annual Management Charges, remains to be seen.
As an industry practitioner, I don't go along with these additional taxes on savings. Without savings; there is no future. The Government should be abundantly aware of this predicament.
Update 17/02/2010
The 1% Levy is being collected by all Life Offices for Protection Policies(Mortgage Protection, Term Insurance, PHI etc.)
The 1% Levy will not apply to Pension Policies.
Some Life Offices are collecting the 1% Levy on Savings & Investment Policies and others are planning to do so shortly.
If you are currently planning to Invest a Lump Sum in a Unit-Linked Investment Bond you should check with the product provider as to whether the levy will apply to you.
As of today, the 1% Levy on the products available through www.InvestAndSave.ie and www.Bond.ie is being absorbed by the Life Offices and we will not make any retrospective charge to you for such payments.
Tuesday, July 7, 2009
Changes In Tenerife
For the past seven years I have been travelling to Los Cristianos, on a regular basis, for family holidays and weekly breaks. In that time, much had changed on the Island; but the climate is still the number one attraction as far as I am concerned.
The airline service to Tenerife has improved dramatically and you no longer have to rely on purchasing a 'seat-only' from one of the tour operators. Ryanair have a regular service from Dublin and Shannon and Aer Lingus fly from Dublin; and from Cork for 5/6 months of the Island's 'peak season'. I would consider a 4 hour return flight, at a cost of €125, to be pretty good value for money. Of course, this is probably at the lower end of the cost scale and at times it can rise to about double that, depending on timing.
I was there last week and the Island is very quiet. Even allowing for the fact that the Summer months would not be considered the busiest time of the year, there was a genuine lack of buzz around the place. As the kids in the UK have not got their school holidays yet, this may have contributed to the scarcity of people. On average there are usually about 25 beds out around the pool area where I stay; 12/14 was the most that were there this time.
Some other negatives would be : UK retirees that had their pensions paid to them while living in Tenerife are finding that the money is not stretching as far as it used to due to the current exchange rate (some have even returned to the UK). The young people that worked in the clubs and bars are returning to the UK as many have been let go and I believe that they are entitled to little or nothing in the form of social welfare in Tenerife. Taxi fares have increased, what I used to pay €2.75 for two years ago has now gone up to €3.75. There are lots more of Se Alquila and Se Vende (for rent/ sale) signs up around the place for shops and apartments; and it is very difficult to sell a property at the moment. My local Chinese restaurant manager told me that he was doing very little take-away business.
On the positive side : It's still Duty Free, even though it is in the EU. Medication and Prescription Drugs are a fraction of the cost that we have to pay here. Finnish has been added to some of the menus in the restaurants that I frequent (more holiday makers from Finland, I presume). The Local Police are now patrolling the promenade on their 'electric' motor cycles. There is little or no new development of accommodation complexes in Los Cristianos.
So, if you like the climate there; can arrange your flight for around €125; don't mind that there are less people around; are fond of walking; want to buy a reasonably priced apartment; are a smoker and/or a spirit drinker or are on some form of medication, it's not a bad stomping ground at the current moment in time.
The airline service to Tenerife has improved dramatically and you no longer have to rely on purchasing a 'seat-only' from one of the tour operators. Ryanair have a regular service from Dublin and Shannon and Aer Lingus fly from Dublin; and from Cork for 5/6 months of the Island's 'peak season'. I would consider a 4 hour return flight, at a cost of €125, to be pretty good value for money. Of course, this is probably at the lower end of the cost scale and at times it can rise to about double that, depending on timing.
I was there last week and the Island is very quiet. Even allowing for the fact that the Summer months would not be considered the busiest time of the year, there was a genuine lack of buzz around the place. As the kids in the UK have not got their school holidays yet, this may have contributed to the scarcity of people. On average there are usually about 25 beds out around the pool area where I stay; 12/14 was the most that were there this time.
Some other negatives would be : UK retirees that had their pensions paid to them while living in Tenerife are finding that the money is not stretching as far as it used to due to the current exchange rate (some have even returned to the UK). The young people that worked in the clubs and bars are returning to the UK as many have been let go and I believe that they are entitled to little or nothing in the form of social welfare in Tenerife. Taxi fares have increased, what I used to pay €2.75 for two years ago has now gone up to €3.75. There are lots more of Se Alquila and Se Vende (for rent/ sale) signs up around the place for shops and apartments; and it is very difficult to sell a property at the moment. My local Chinese restaurant manager told me that he was doing very little take-away business.
On the positive side : It's still Duty Free, even though it is in the EU. Medication and Prescription Drugs are a fraction of the cost that we have to pay here. Finnish has been added to some of the menus in the restaurants that I frequent (more holiday makers from Finland, I presume). The Local Police are now patrolling the promenade on their 'electric' motor cycles. There is little or no new development of accommodation complexes in Los Cristianos.
So, if you like the climate there; can arrange your flight for around €125; don't mind that there are less people around; are fond of walking; want to buy a reasonably priced apartment; are a smoker and/or a spirit drinker or are on some form of medication, it's not a bad stomping ground at the current moment in time.
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