Thursday 19 January 2017

Four out of 10 don't know tax rates on their income

Published 12/01/2016 | 02:30

Four out of 10 people were unable to say what the two income tax rates are, according to a survey commissioned by pensions and investment provider Irish Life
Four out of 10 people were unable to say what the two income tax rates are, according to a survey commissioned by pensions and investment provider Irish Life

Financial literacy among adults is low despite seven years of one of the worst financial downturns in the history of the State, two new surveys have found.

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Four out of 10 people were unable to say what the two income tax rates are, according to a survey commissioned by pensions and investment provider Irish Life. The higher rate of income tax is 40pc, with the lower rate at 20pc.

And a separate survey conducted by financial adviser Frank Conway found big gaps in financial literacy among the adult population.

Mr Conway, who delivers financial planning seminars under the MoneyWhizz brand, found that people were unclear when it was appropriate to borrow money and did not know what a credit report is and how it works.

Considered

It was appropriate to borrow money if it will lead to a better job, but nearly half of those questioned considered it a good idea to opt for credit when there is a sale on, he said.

One in five failed to correctly identify what information is contained in a personal credit report.

A personal credit report records how we manage the repayment of a formal credit arrangement such as a personal loan or mortgage. It does not include personal financial assets. Banks, credit unions and other credit providers report consumer credit information to the Irish Credit Bureau.

Meanwhile, the Irish Life research found that only around a third of people know how much is needed to live in retirement.

The research, carried out by Coyne Research, found people believe they should start planning for retirement at the age of 36, whereas the best advice is to start earlier than that.

Most people expect to retire from work at the age of 64, two years before the State retirement age of 66.

However, the survey did find that 57pc of consumers are more aware of their personal finances than they used to be. It also showed 71pc don't know how much money they will need to live on as pensioners.

Irish Independent

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