Welcome to the last edition of our weekly personal finance newsletter On the Money this side of Christmas.
A letter in The Irish Times this morning highlights some of the enduring themes of personal finance in 2022 – the dangers of careless presumption and the gap between what service providers say and what they do.
Susan McKeever notes that her “glossy new relocated AIB branch no longer has an ATM or handles cash or cheques”. The bank has assured her there is no prospect of this changing and she wonders, not unreasonably “what exactly is the point of a bank branch that offers such incomplete banking services to their local customers”.
I still clearly recall the hurried retreat by AIB chief executive Colin Hunt during the summer within days of announcing plans to transform 70 of its 170 outlets into cashless outlets, without even ATMs.
Admitting at the time that “we got it wrong” and that the bank had “made a mistake” following “strong negative feedback” from customers, he said: “We heard the feedback, we listened to it, we acted on it, we reversed that plan, we’ve withdrawn that proposal – it’s off the agenda and branch services will continue as they exist today.”
Off the agenda? Not quite. Although the move was halted for the 70 branches listed in the original July announcement, it appears not to apply to 22 other branches previously slated for a similar move – including Blackrock, despite the fact that it has since moved into sparkling new premises in the Frascati Centre.
These are precisely the sort of weasel words that have got Ireland’s banks into one pickle after another.
There is some truth obviously in the data showing the growing preference of many customers to bank online or in cashless form. However, it is also true that it you phase out services, making them ever more difficult and time consuming to access, then use of those services will inevitably decline across your network.
And as research from the National Adult Literacy Agency (Nala) published on Friday showed, it is those who are already most vulnerable – the elderly, migrants and Travellers – who are most discriminated against by the relentless move to digital banking. Why? Because they either have poor access to technology or poor understanding of how to use it, and, in the case of older people, a lifetime habit for using cash.
The Nala survey sample was certainly small but the report’s conclusions echo the finding of previous studies in this area. And it once again shows the need for banks to tailor their approach to the needs of their customers rather than trying to insist customers shoehorn themselves into arrangements that suit bank balance sheets but often leave customers in the dark.
And it is not just banks. It’s an issue that recurs in a question in next week’s Q&A column from a reader who has been totally – and in my view needlessly – frustrated in trying to get a simple answer from one of the utility companies about why they are being charged what they are being charged.
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Another theme that is becoming more prominent this year is the issue of wealth inequality.
It cropped up in a very interesting report on intergenerational wealth transfers from the Central Statistics Office this week – in bald terms, inheritance and gifting.
Pressure on ministers for finance to retain and, more often, increase the tax free thresholds on inheritance is a recurring theme in government, with lobbying politicians and financial service industry groups pointing, in particular, to rising property prices frustrating inheritance of family homes.
Leaving aside the dwelling home exemption deals with life’s hard cases in this regard, the CSO report highlighted that the median inheritance value – the figure at which half of all inheritances are lower with the other half higher – is €99,200, far short of the current threshold for a child receiving from parents of €335,000.
Given the report also confirms that the wealthiest people in the State – the top 20 per cent – are four more times likely to inherit than the poorest 20 per cent, it is likely to add fuel to ongoing discussion about whether thresholds might be lowered, not raised, or whether capital gains tax should apply to the increase in the value of assets passing on through inheritance.
Inheritance is a notoriously touchy subject in Ireland and it would be a brave minister for finance indeed who would countenance such dramatic change but, at some point, wealth inequality becomes a concern in terms of social cohesion from which we all benefit.
We’ll be back with you on January 7th. Until then, take the time over the holiday period to enjoy the one asset that money cannot buy, your family. Happy Christmas.
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