ssia

yankinlk

whats the story? i heard on the radio that we are losing money if we took the equity based one (i took the pip - i think thats equity based)

is this just a case of the media jumping on the bandwagon of raising the alarm to a topic we are sensitive on.....or am i screwed...

1. can an ssia go into the negative? ie lose money...

2. or is the 25% protected?

Samson

If you took out an equity based SSIA, your money is as much at risk as if you had bought shares.
Even the 25% is at risk I think (but don't hold me to that).

sceptre

Originally posted by Samson
Even the 25% is at risk I think (but don't hold me to that).

I've a feeling this may not be the case:

The 25% is based on the amount "saved". I'd read that as the amount of money that the punter puts into the scheme, not the amount remaining at the end. If it were the case that the bonus was based on the amount in the fund at the end the government would be running the risk of having to pay out massive sums of money if the market surged and the investments rose in value.

That's totally ignoring the (slim) possibility that the government may take the advice of economists, newspapers and so on and simply dump the scheme before the official end - which would mean that no-one would see much of the 25%.

And if anyone had hard evidence (or just an opinion) I'm as correctable as Samson.

At any rate, you could still lose money overall if shares really take a dive (over the next four years if the value drops a cumulative 25% or greater, it effectively means that even if I'm correct with the above, you'll be coming out quits or worse). Par for the course - there's a long way to go yet. People did point out at the time that anyone taking out an investment-based SSIA should really consider leaving the money in for ten years at least

b20uvkft6m5xwg

Any news on this Yanklink??
I actually had someone ask me about this and I cant be arsed to go off and reseacrh it now

Samson

Originally posted by sceptre
That's totally ignoring the (slim) possibility that the government may take the advice of economists, newspapers and so on and simply dump the scheme before the official end - which would mean that no-one would see much of the 25%.

My SSIA (which is non equity based, fixed interest rate) adds in the government 25% every month, so for this to happen would mean actually taking the money back out of my account.

Pigman

Originally posted by Samson


My SSIA (which is non equity based, fixed interest rate) adds in the government 25% every month, so for this to happen would mean actually taking the money back out of my account.

Yep, I chipped in for the max of 254 euro at fixed rate of 25% and according to my statemtents I've been getting paid credits of 63.50 euro on the last day of every month. So unless they physically pull the money back out of my account (something they can't do unless I fail to keep up with payments AFAIK?) the return is guarenteed.

Mercury_Tilt

This post has been deleted.

yankinlk

i spoke to some one in the bank and it jives with what you all have been saying...

if everything goes "tits up" it can eat into the government 25 % then into our own saved money as well. bummer. why didnt i go for that safe option?

Having said that, im not too worried as the stocks are spread over different markets and 5 years is quite a while, but i agree, may have to let it ride for 10 years after the first 5 is over

Victor

Originally posted by yankinlk
if everything goes "tits up" it can eat into the government 25 % then into our own saved money as well. bummer.

I would concur, example:

Your contribution	€100
Govt contribution	€ 25
Capital added to fund	€125

Originally posted by yankinlk
why didnt i go for that safe option?

Because Charlie McCreevy wants your savings and tax money to turn into profit for the banks.

RainyDay

Hi Yanklink - The 25% Govt contribution is subject to the same risks as your own cash. In an equity-based funds, all money going into the fund is used to buy assets (mostly shares, but possibly including some bonds and/or property, depending on the fund). If share prices drop significantly, then the values of both your contribution and the Govt contribution will drop.

However, any equity-based investment should be medium-to-long term, i.e. 5 years+, so you really shouldn't panic now. Just let it ride and see where things are at the end of five years. Note that the so-called 'safe' option of deposit accounts aren't really all that safe. You have a great risk of losing the value of your money through inflation in a deposit account than losing money through share price drops in a long term equity investment.

You might want to check out the fees you are paying on your account. Some of the big bank SSIA accounts had high entry fees 3% approx. There are far cheaper equity-based accounts available, such as EBS (1.5%) or Quinn Life (1%). In theory, it is possible for you to transfer your investments to one of the lower charging investors (though I haven't heard of this being done in practice).

For more discussion, on SSIA,s check out the SSIA discussion forum of askaboutmoney.com

yankinlk

what an extremely well written informative post, thats why i come here. cheers for that m8. now, what do u know about pensions?
(see my other post)