Business Club Member competition: WIN Cellstory facial treatments worth €460
Business Club Member competition: WIN Cellstory facial treatments worth €460

IMAGE

Food consultant and children’s book author Dr Michelle Darmody on her life in food
Food consultant and children’s book author Dr Michelle Darmody on her life in food

Sarah Gill

Women in Sport: Irish footballer Áine O’Gorman
Women in Sport: Irish footballer Áine O’Gorman

Sarah Gill

Love Is Blind and the new Joker film – what to watch this week
Love Is Blind and the new Joker film – what to watch this week

Sarah Finnan

Introducing LashLift, the latest launch from Sculpted by Aimee
Introducing LashLift, the latest launch from Sculpted by Aimee

IMAGE

A revamp of the floorplan was key to creating space and flow in this home
A revamp of the floorplan was key to creating space and flow in this home

Megan Burns

Six pre-Budget 2025 moves to strengthen your finances for the year ahead
Six pre-Budget 2025 moves to strengthen your finances for the year ahead

Nick Charalambous

What October has in store for you, according to your horoscope
What October has in store for you, according to your horoscope

Clarisse Monahan

Sarah Benson, CEO of Women’s Aid, on how abuse starts and how victims can get help
Sarah Benson, CEO of Women’s Aid, on how abuse starts and how victims can get...

Roe McDermott

‘If one of my friends challenges me to take part in any sporting event, I’ll do it’
‘If one of my friends challenges me to take part in any sporting event, I’ll...

IMAGE

Six pre-Budget 2025 moves to strengthen your finances for the year ahead
Image / Agenda / Money

Six pre-Budget 2025 moves to strengthen your finances for the year ahead


by Nick Charalambous
30th Sep 2024

Whether it’s tax adjustments, social welfare increases or energy credits, Budget 2025 presents opportunities for households and individuals to improve their financial situation. A finance expert shares tips on how to strengthen your finances for the year ahead.

By paying attention to the key announcements and ensuring you’re taking full advantage of available entitlements, you can strengthen your savings and your financial position for the year ahead. With the right planning, Budget 2025 can offer significant relief, from tax breaks to social benefits, ensuring that you’re better prepared for both expected and unexpected expenses.

1. Review your income and tax bands

With possible adjustments to tax bands and rates, it’s essential to review your income and ensure you’re taking full advantage of tax credits. Keep an eye on the likely rise in the threshold for the 40% tax rate. When wages are rising, the point at which people pay the 20% and 40% tax rates should go up too. The current threshold before you pay tax is €42,000 per year and it is strongly rumoured that it will be increased by €2,000 per year to €44,000, which is worth over an extra €100 per month in our pockets.

2. Prepare for changes in USC

The government has signalled another reduction in the Universal Social Charge (USC). Whilst the percentage decrease may seem small, it will improve your take-home pay. The top rate is 7%, so accounts for quite a bit of the tax we suffer.

3. Reevaluate your rental situation

The rent tax credit is likely to increase from €750 to €1,000. Tenants should ensure they are claiming this when claiming taxes on the Revenue Online system. You can also go back over the last two years, and if your partner is the other tenant both of you can claim €750 each over the last two years.

4. Plan for energy and child benefits

With the extension of energy credits (€250) and a double Child Benefit payment expected in December, households should factor these bonuses into their year-end and early 2025 budgets to ease financial pressures. For parents, there have been reports that they should also expect the Child Benefit payment to be increased by €10 and a double Child Payment before Christmas could be a timely boost for the festive spending.

5. Inheritance tax changes

The inheritance tax threshold is expected to rise to €400,000, giving more room for planning if you’re anticipating an inheritance. If relevant, now is a good time to review your estate planning strategies.

6. Take advantage of the Help to Buy scheme

The Help to Buy scheme remains a cornerstone of the government’s housing strategy, offering first-time buyers up to €30,000 of their income tax paid over the past four years. Currently, this scheme only applies to properties worth up to €500,000, but there are discussions about raising this limit in Budget 2025. If you’re a first-time buyer, it’s important to explore how this scheme could reduce the financial burden of purchasing a new home. While there are some reservations about the scheme, especially whether it benefits those who truly need it, staying informed could save you a significant amount of money.

With many workers likely to benefit by approximately €1,000 in this budget by tax changes and cost-of-living measures, it’s crucial not to let that money disappear into lifestyle inflation. Instead, consider putting these savings into high-interest accounts or alternative savings vehicles, especially if you’re saving for your children’s future.

Be sure to review options beyond traditional banks, post offices and credit unions to ensure you’re getting the best returns. For those setting aside Child Benefit, finding the right investment or savings product could make a big difference in meeting future needs.

Nick Charalambous

Nick Charalambous, Managing Director of Alpha Wealth, has worked in investment and private banking for some of the biggest banks in the world. With over 25 years of financial services experience in Cork, primarily as a financial advisor with AIB and Ulster Bank, Nick has built up an extensive knowledge of the financial services environment, which he shares with his clients in many areas of personal finance, alphawealth.ie