Question: I have been putting money into a pension fund for the last 10 years and even though I won't be retiring for over 20 years, I'm worried about the recent falls in the stock market. I have friends in similar positions, and we are all left wondering what we should do right now. Should we be taking action?
Answer: We asked the CEO of the Irish Association of Pension Funds, Jerry Moriarty. He said he can't comment specifically without knowing the type of pension fund you are invested in or what your general circumstances are. But he did say that most funds have some exposure to stocks, bonds and other investment assets, and are spread across a range of assets.
So if you hear that one of these has been hit - say the stock market has fallen 20pc - that doesn't mean your pension has fallen by the same amount as only a proportion of your money may be in stocks.
The only immediate action you should take now would be to speak with the adviser that helped set up your pension. It's very likely they will recommend you do not make any changes around your pension investment for the simple reason that markets rise as well as fall, and will continue to do so until you retire in 20 years' time.
Historically, stocks have been more volatile than bonds or cash, but have invariably delivered a better return over the long run, he added.
Question: Should I avail of a mortgage moratorium? Will it end up costing me more?
Answer: Demand for mortgage payment breaks may reduce drastically now that the Government has put in place the Covid-19 wage subsidy scheme, according to head of credit at MyMortgages.ie Joey Sheahan.
This is where Revenue will pay 70pc of employees' salaries, up to a limit of €410 weekly (i.e. €1,775 monthly). There's also an increase in the Covid-19 unemployment benefit to €350 weekly (i.e. €1,515 monthly), from €203.
Given that it's very difficult to spend money at present, many people should be able to meet their monthly financial commitments in the short term based on these supports, Mr Sheahan maintains. If you have been made redundant and cannot meet your monthly repayments, contact your bank immediately and apply for a payment break. If you qualify but don't need it, then don't rush into it, is Mr Sheahan's advice.
This choice can occur where somebody has been made redundant, has a mortgage repayment of, say, €1,000 monthly, but may have savings of, say, €20,000.
In this instance, you could potentially use €3,000 of your savings to pay your mortgage for three months, he says.
A reason why some people might not avail of the moratorium is that if they wish to borrow again in the next couple of years, availing of the moratorium may go against them in terms of being approved for a new mortgage.
As it stands, most banks will want you to be making full repayments for two years after a moratorium before they will approve a mortgage, he adds. Also, the borrower will pay more interest in the long term. Take a borrower who has €350,000 outstanding, with 32 years remaining and a variable interest rate of 3.15pc. Monthly payments are €1,447.83.
If they don't make payments for three months, they will pay an additional €2,651 interest on the three months' deferred payments of €4,546 over the remaining 31 years and nine months.
Question: I am a plumber whose business has ground to a shuddering halt. I am hopeful that I will be back to work soon. The insurance on my van is up in April. I usually just pop into my broker and sort out the necessary paperwork there, but my wife is immuno-compromised, so we are self-isolating. I usually bring hard copies of my licence, no-claims bonus, etc. I know I could post these, but I read there will be delays in the postal service over coming weeks. Is there any way I can sort it out from home?
Answer: You should be able to do this, although it depends on your broker and insurer, and how flexible they will be in relation to soft-copy documentation.
Managing director of Insuremyvan.ie Jonathan Hehir says that even if this was not acceptable before, brokers and insurers should accept scans or photographs to allow you to complete your renewal.
April is the busiest month of the year for van insurance so it is definitely better to try to get things in order in advance of your renewal, so that delays won't affect your cover, he advised.
If you have been made redundant and are unable to meet your monthly repayments, contact your bank immediately and apply for a payment break.
Insurers and brokers should accept scans and photographs of documents needed to renew your motor insurance, given the current situation.