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Retirements spark scramble for deposits

THE scramble for the cash of retiring public servants has begun, with Bank of Ireland the first to launch a deposit product specifically aimed at the 9,000 people who have stepped down from their jobs.

Financial advisers also said yesterday that banks were monitoring the bank accounts of consumers and anyone getting an amount of cash would be targeted for the sale of products that would make money for the banks.

A large number of banks are understood to be gearing up to launch products and a marketing blitz to entice cash-rich retired public servants to deposit their funds with them.

Bank of Ireland has become the first out of the blocks to specifically target retiring public servants with a high-interest deposit account.

The bank will offer 3.43pc over a six-month period for those who deposit at least €25,000. This is the highest savings rate the bank pays, a spokeswoman confirmed.

Those who take up the new Retirement Options account will be able to access up to half of their funds with no penalty.

And the bank confirmed that it would not restrict the account to public servants, with the offer also open to those who have retired from the private sector.

Senior

Some €600m was paid out to public servants who retired last week in tax-free lump sums. The average lump sum is close to €80,000.

Senior people retiring are set to get even more, with retiring high-ranking gardai set for lump sums of an average of €107,000.

Under the grace period arrangement, public servants who retired before February 29 had their pensions untouched by recent pay cuts.

But those retiring from now on will see their pensions cut in line with the 2010 pay cut of up to 12pc.

Irish Independent