PwC, a leading accountancy and consultancy firm, has suggested that high-earners close to reaching the €2 million pension pot limit, which invites stringent tax regulations, should not act hastily to escape it, says Dominic Coyle. The tax cap on pension savings was put into effect in 2005, initially set at €5 million. However, following the economic downturn, it was reduced to €2.3 million in 2010 and then to €2 million in 2014, a cap that has remained unchanged.
According to FRS Recruitment, a recruitment agency, over 40% of the workforce in Ireland is not fully utilising their holiday entitlements. Almost one fifth did not take five days annual leave in the previous year reports Eoin Burke-Kennedy.
Columnist Pilita Clark states that females are more likely to accept ‘non-promotable tasks’ such as mentoring and training, which demand considerable time. This point is further emphasised in a 2022 book by four female academics, who suggest that women need to learn to decline these requests.
Michael O’Leary, chief of Ryanair, expressed concern that restrictions on passenger numbers at Dublin Airport will result in sky-high airfares, possibly reaching €500 for a one-way ticket to Dublin by Christmas due to limited seating capacity states Eoin Burke-Kennedy.
A recent survey has shown that the majority of the public supports the proposed mandatory workplace pension scheme. However, there might be some resistance initially. The plan seeks to automatically enrol workers between the ages of 23 and 60 earning over €20,000 in an occupational pension plan, if they are not already members. This survey was done by Royal London Ireland, a life insurance and pension specialist, reports Dominic Coyle.
Lastly, the ongoing issue of Ireland’s housing crisis requires some discussion on the next steps to be taken.
Budget 2025 has set aside approximately €1.4 billion for potential tax reductions. However, in the present robust economic environment, such an approach may trigger inflation and be procyclical, thus having a negative economic impact. These sentiments are voiced by Owen Reidy, the head of Ictu, in our perspective section. He further points out that this tax reduction strategy conflict with the key suggestions put forward by the Commission on Taxation and Welfare which argued that the government’s income needs to progressively increase in proportion to the national productivity over the coming years.
In other news, brought up by Eoin Burke-Kennedy in his column, Irish property market has experienced a significant increase of 10% since July 2022, following the European Central Bank commencing a series of 10-interest rate hikes. Notably, average prices in Dublin have risen by 7.5%. The reason behind these surges, however, remains unclear.
Addressing a reader’s personal finance dilemma in relation to inheritance, Dominic Coyle acknowledges that even though the reader provided care for a deceased relative, he’s not entitled to a part of the late relative’s estate based on intestacy rules. That being said, a family member set to inherit a part of the estate has generously offered him a gift of €20,000 in appreciation of his contribution. The reader sought advice on whether the €3,000 annual gift exemption could be utilised to reduce the amount eligible for tax under the Group C threshold. The query was essentially about the possibility of dividing the amount gifted into a €3,000 part and a €17,000 part, which could eventually lower the taxable amount from €3,750 to €750. Coyle’s response, though not revealed, is anticipated to clear any doubts.