Case study: 'What is the point in saving? You are getting a hit for saving your money' - Peter Hegarty
BUSINESSMAN Peter Hegarty believes the latest Budget has hit pensioners hard.
Peter (69) has chosen not to take it easy in retirement, and continues to run his own business that supplies packaging to the medical industry from his home in Virginia, Co Cavan.
He has been putting money into his pensions since he was in his early 50s to provide for his later life.
His pension has already been hard hit by the collapse in shares.
"I already have to draw a pension, as the Government makes me, so they can take the tax – it is the law," he said.
He has an Approved Retirement Fund, which means that he has to draw down 5pc of the value of the fund each year and then pay tax on that.
He is also disappointed as the pension fund will be impacted by the new stamp duty levy on pension fund assets, which has now increased from 0.6pc to 0.75pc for 2014.
In addition, he believes that a 41pc exit tax on life assurance policies and on investment funds is extremely harsh.
"What is the point in saving? You are getting a hit for saving your own money," he said.
The businessman, who set up his own business – Decorative Design Packaging Ltd – said he is still in a fortunate position, even though he has suffered stock losses in recent years.
"I've a small business that gives me a living. I feel for those who aren't as fortunate," he said.
He will also be impacted by the prescription charges which are rising by €1, as he is on medication for a long-term illness.
Peter said he does feel for those who are retired and who are reliant on supports – such as the OAP telephone allowance of €9.50 a month, which is now being scrapped.