Returning in to Ireland with family in 2021

N

NotPoodle

Registered User
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Hi,

We're planning on returning to Ireland, from the UK, at some point in 2021 (timeline is now more difficult with COVID resurgence). We had reached the stage of needing to make a decision on purchasing here, or moving back to Ireland - which was always on the agenda at some point. We have already gone some way in securing jobs so I'm adding in Irish salaries also as that is where the advice is being sought.

Initially we will be renting in Ireland, to show Irish savings ability and for my spouses probation period - but then would like to try purchase a property as soon as we can.

Age: 37
Spouse’s/Partner's age: 34

Annual gross income from employment or profession: UK: £100k (bonus incl.) / Ireland: ~€100k (bonus incl.)
Annual gross income of spouse: UK: None currently / Ireland: €45k

Monthly take-home pay: £4,500 (after pension contrib)

Type of employment: Me: Private / Wife: Public

In general are you:
(a) spending more than you earn, or
(b) saving?: Saving, but only £700p/m currently, since my spouse finished work

Rough estimate of value of home: N/A
Amount outstanding on your mortgage: We pay £2,100 in rent in UK, would expect this to be a little less in Ireland but difficult to judge rental market currently
What interest rate are you paying? N/A

Other borrowings – car loans/personal loans etc: None

Do you pay off your full credit card balance each month?: Yes
If not, what is the balance on your credit card?: Yes

Savings and investments:

  • UK: £104k mostly now liquid as I sold majority of positive investments here in December to avail of greater CGT limit. We had expected to be tax residents in Ireland for 2021, but not certain now on move timeline. We also bought two newish cars here in the past 18 months (one was needed for here, other intended for use when we move back), so this has put a dent in savings.
  • Savings in Ireland: €102k

Do you have a pension scheme? Yes (Personal contribution: + employer currently = 20%). Value of £108k currently.

Do you own any investment or other property?: No

Ages of children: 1 & 3. No childcare currently, but we will need this in Ireland.

Life insurance: Yes 4X


What specific question do you have or what issues are of concern to you?

  1. Original plan was to use the Euro savings towards a house deposit and leave Sterling savings in the UK to see if there is any recovery in pound strength, however reading other threads on this has made me rethink. There's also no tax benefit to leaving in UK investments as I'll be an Irish tax resident. Would it be better to eliminate the FX risk by converting to Euro - perhaps over a few months? And in doing this use this to have a greater house deposit?
  2. We had hoped to buy in the €450-550k range, but I've been getting some quite strange results from online mortgage calculators, I believe to be down to the childcare costs that we will have (estimated at €2k per month) so I think this may already provide my answer for question 1, presumably it makes more sense to put up a greater deposit with what we have, rather than renting for longer.
  3. Is there anything I should start thinking of doing for my children's future education costs, or is this something to address further down the line when the home purchase is out of the way?
  4. Any suggestions on what I should do with UK pension, leave and accept the FX risk, or look to move?
  5. Is there anything else I should be doing at this stage of my life? e.g. investing more in pension, higher life insurance coverage?
 
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NotPoodle said:
Original plan was to use the Euro savings towards a house deposit and leave Sterling savings in the UK to see if there is any recovery in pound strength, however reading other threads on this has made me rethink. There's also no tax benefit to leaving in UK investments as I'll be an Irish tax resident. Would it be better to eliminate the FX risk by converting to Euro - perhaps over a few months? And in doing this use this to have a greater house deposit?
Click to expand...

If you are living and working in euros for good then your savings should be in euros. Look for the best rate on the transfer, you will never second-guess currency markets.

NotPoodle said:
  1. We had hoped to buy in the €450-550k range, but I've been getting some quite strange results from online mortgage calculators, I believe to be down to the childcare costs that we will have (estimated at €2k per month) so I think this may already provide my answer for question 1, presumably it makes more sense to put up a greater deposit with what we have, rather than renting for longer.
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A conversation with a mortgage broker would really help you I think.
 
@NotPoodle welcome. Where is your job going to be based (assuming at some point you will return to an office) and for example if it is Dublin do you have an idea of where you want to live, e.g. commuter town, or in Dublin. I recently enough returned to Dublin with a young family and bought a house, so can give some further details on rent, childcare costs in the Dublin area.
 
Thanks for the response NoRegretsCoyote.

I think reading on here has made clear that your suggestion on FX is something I should definitely do - in my mind this would mean also moving my UK pension to an Irish provider, would that be something you also recommend?
 
Dublinbay12 said:
@NotPoodle welcome. Where is your job going to be based (assuming at some point you will return to an office) and for example if it is Dublin do you have an idea of where you want to live, e.g. commuter town, or in Dublin. I recently enough returned to Dublin with a young family and bought a house, so can give some further details on rent, childcare costs in the Dublin area.
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Thanks Dublinbay12, my choice would have been Dublin, but I was overruled on that front!
 
I had savings tied up in GBP too, it has only got worse since brexit when one might have expected a steady improvement. There is an opportunity cost to leaving funds sit there waiting waiting for forex movement; interest on debt that could be paid off, or investment in something you know with much greater certainty should grow. There are exemptions for importing your car- which you likely know already.

You may find after some research that rent/child care costs are lower than the UK, especially SE of the UK. If you are not going to be in Dublin this is absolutely true in my experience. Do you need to include child care in mortgage application discussions, it sounds like it is not a current expense, and you could have family assisting for all they know?
 
presidenttttt said:
I had savings tied up in GBP too, it has only got worse since brexit when one might have expected a steady improvement. There is an opportunity cost to leaving funds sit there waiting waiting for forex movement; interest on debt that could be paid off, or investment in something you know with much greater certainty should grow. There are exemptions for importing your car- which you likely know already.

You may find after some research that rent/child care costs are lower than the UK, especially SE of the UK. If you are not going to be in Dublin this is absolutely true in my experience. Do you need to include child care in mortgage application discussions, it sounds like it is not a current expense, and you could have family assisting for all they know?
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Much appreciate the input.

Very good points on savings tied up in GBP - based on the advice in the thread so far I'll be looking to convert this to Euro once our move is confirmed.

We don't have childcare costs in the UK currently. My wife will be starting a new role and on probation, so by the time we come to mortgage application the childcare costs will be reality.
 
NotPoodle said:
I think reading on here has made clear that your suggestion on FX is something I should definitely do - in my mind this would mean also moving my UK pension to an Irish provider, would that be something you also recommend?
Click to expand...

I don't know much about this. There may be tax implications so worth taking very specific advice.
 
NoRegretsCoyote said:
I don't know much about this. There may be tax implications so worth taking very specific advice.
Click to expand...
Understood, I'll get this checked. I'll report back the advice I get here in case useful to someone in a similar position in future (only to be used as a datapoint though as everyones circumstances will be varied.)
 



What specific question do you have or what issues are of concern to you?

  1. Original plan was to use the Euro savings towards a house deposit and leave Sterling savings in the UK to see if there is any recovery in pound strength, however reading other threads on this has made me rethink. There's also no tax benefit to leaving in UK investments as I'll be an Irish tax resident. Would it be better to eliminate the FX risk by converting to Euro - perhaps over a few months? And in doing this use this to have a greater house deposit?
Comment: its hard to know on the exchange rate. You can wait and wait but I'd say if you need the money in euros then convert. Otherwise, set a threshold rate and if it gets to it or close just transfer the lot and don't look back.
  1. We had hoped to buy in the €450-550k range, but I've been getting some quite strange results from online mortgage calculators, I believe to be down to the childcare costs that we will have (estimated at €2k per month) so I think this may already provide my answer for question 1, presumably it makes more sense to put up a greater deposit with what we have, rather than renting for longer.
Comment: for the 3 year old you can avail of ECCE here. This is free creche from 9 until 12 daily. I would say go this route and then get a childminder. You can save significantly going this route and most young parents i know do this with 2 children. In addition to this, i would think this will help with declarred outgoings and in turn increase your mortgage.
  1. Is there anything I should start thinking of doing for my children's future education costs, or is this something to address further down the line when the home purchase is out of the way?
For now, I would look up ECCE to assist with your mortgage approval amount. At 1 and 3 my main concern would be buying a property with good schools in the local area. If they are fee paying you can worry about that later.
  1. Any suggestions on what I should do with UK pension, leave and accept the FX risk, or look to move?
I transferred mine some years back. I did simply on the basis of a hassle free approach in the future. Its a personal choice i would think.
  1. Is there anything else I should be doing at this stage of my life? e.g. investing more in pension, higher life insurance coverage?
We can all do with paying more in the above mentioned but for now i would focus on getting the right property. The rest follows. :)

Best of luck :)
[/QUOTE]
 
I moved back 20 years ago. Some advice
  1. Be patient, it takes time to settle back in
  2. Take some UK tax advice. For example, I was able to get a tax rebate from the UK for unused portions of my tax credits for the year in question
  3. Change your driving licence quickly. Car insurance can be an issue for some returning.
  4. Is home working/blended working an option.? That might reduce the need to live in Dublin or a big city. For example you'll get much better value for money housewise in Naas then Dublin and you are in City West in 20 mins
  5. Can you move or live closer to family. It does make life easier, especially when the little un's start school
 
Thanks @mimes & @Peanuts20 - much appreciate hearing from two people that have made a similar move and what you've both done/suggest.
I'll take a proper look at ECCE, it's been on my list to do.
W.r.t tax advice, I'm planning on engaging with an advisor so that's ticked off at least.
Luckily I've also (rightly or wrongly) retained an Irish driving license. Believe insurance will still be a jump in costs for a few years, but I'm expecting that from reading elsewhere on the topic.

Thanks again both!
 
I have seen a few people come back to update these and found it very interesting. No questions as-such currently and still a few actions I need to take based on previous advice but we made our move back from the UK to Ireland and readjusting to life here.

Comments on anything obvious we should be doing are more than welcome.

Age: 38
Spouse’s/Partner's age: 35

Annual gross income from employment or profession: €116k (bonus incl.)
Annual gross income of spouse: €40k (€50k salary, but with one day parental leave)

Monthly take-home pay: €6,500 (after pension contrib)

Type of employment: Me: Private / Wife: Public

In general are you:
(a) spending more than you earn, or
(b) saving?: Saving

Rough estimate of value of home: €500,000
Amount outstanding on your mortgage: €340,000
What interest rate are you paying? 2.25% fixed for 5 years. Overpaying 10%

Other borrowings – car loans/personal loans etc: None

Do you pay off your full credit card balance each month?: Yes
If not, what is the balance on your credit card?: Yes

Savings and investments:

  • UK: £25k - plan to sell and use some to overpay mortgage
  • Savings in Ireland: €5-10k, but some already earmarked for house

Do you have a pension scheme? Yes - UK pension value of £120k / Ireland pension value of €25k (employer and employee contribs = 30%)
Spouse is public sector and has a small AVC for earnings in higher tax band

Do you own any investment or other property?: No

Ages of children: 2 & 4. Childcare costs = €1,750 a month

Life insurance: Yes 8X for me
Mortgage protection
 
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Not quite a yearly update but I had planned on coming back to this annually. Current state of finances is:

Age: 39
Spouse’s/Partner's age: 37

Annual gross income from employment or profession: €145k (bonus incl.)
Annual gross income of spouse: €50k (€60k salary, but with one day parental leave)

Monthly take-home pay: €7,300 (after pension contrib)

Type of employment: Me: Private / Wife: Public

In general are you:
(a) spending more than you earn, or
(b) saving?: Saving

Rough estimate of value of home: €575,000
Amount outstanding on your mortgage: €285,000
What interest rate are you paying? 2.25% fixed for 3.5 years. Overpaying 10% have been reducing the term but might stop this (term reduction) based on advice I have seen being given here.

Other borrowings – car loans/personal loans etc: No

Do you pay off your full credit card balance each month?: Yes
If not, what is the balance on your credit card?:

Savings and investments:
  • 40k - plan to sell and use some to overpay mortgage

Do you have a pension scheme? Yes - €235k (employer and employee contribs = 35% on base pay 116k)
Spouse public sector and has a small AVC (Cornmarket) for earnings in higher tax band - need to review this and ensure we're maxing the higher rate relief.
Both will be entitled to full UK state pension (with ongoing NI payments) and partial Irish pension ~75% at a guess

Do you own any investment or other property?: No

Ages of children: 4 & 5. childcare costs = €700 a month

Life insurance: Yes 8X for me, not entirely sure on PS scheme
Mortgage protection

Questions
  • Low interest rate on mortgage, should we be overpaying? - seems the consensus has shifted slightly with the interest rate increase
  • Anything else we should be doing, or thinking about doing at this point? We're still spending quite a lot on completing/furnishing our new home, but expect this to reduce from end of Q1 2024.
  • Would expect we might move in future, more than likely for location rather than more house - we're not in Dublin so expect this to be in the 700k-900k bracket, but unsure if this will be affordable.
 
Probably negligible difference in overpaying vs saving over the next 3.5 years. Right now there is a higher probability that the fixed rates available in 3.5 years will be higher than 2.25%. In that case probably best to continue to overpay or increase overpayments so that your monthly mortgage does not increase.

If you have 40k cash available you could always consider locking that up in savings for the next 3 years whilst continuing to overpay 10%.
 
DublinHead54 said:
Probably negligible difference in overpaying vs saving over the next 3.5 years. Right now there is a higher probability that the fixed rates available in 3.5 years will be higher than 2.25%. In that case probably best to continue to overpay or increase overpayments so that your monthly mortgage does not increase.

If you have 40k cash available you could always consider locking that up in savings for the next 3 years whilst continuing to overpay 10%.
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Rather than overpay, wouldn't it be better to put the overpayment money into Trade Republic for 4% interest and instant access to cash if needed (alternatives to TR are of course available)?
 
time to plan said:
Rather than overpay, wouldn't it be better to put the overpayment money into Trade Republic for 4% interest and instant access to cash if needed (alternatives to TR are of course available)?
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I think so, even after the DIRT tax. I was just suggesting to continue overpaying the 10% whilst locking up the 40k cash. The 10% overpayment would go someway to negate a possible increase in monthly mortgage costs at end of fixed rates.
 
DublinHead54 said:
I think so, even after the DIRT tax. I was just suggesting to continue overpaying the 10% whilst locking up the 40k cash. The 10% overpayment would go someway to negate a possible increase in monthly mortgage costs at end of fixed rates.
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Trade Republic offers 4% up to 50k. So having locked in the 40k savings, the OP should redirect the money that they would have overpaid into TR. There is instant access so it's available if needed at the end of the mortgage fixed rate, if as you say the mortgage rates go up.

Once you account for DIRT, the advantage is pretty small in cash terms, but there is a value to having cash on hand in case of unforeseen circumstances.
 
time to plan said:
Trade Republic offers 4% up to 50k. So having locked in the 40k savings, the OP should redirect the money that they would have overpaid into TR. There is instant access so it's available if needed at the end of the mortgage fixed rate, if as you say the mortgage rates go up.

Once you account for DIRT, the advantage is pretty small in cash terms, but there is a value to having cash on hand in case of unforeseen circumstances.
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It wasn't if interest rates go up they already have. OP is on a 2.25% fixed for 3.5 years, there is a non-zero probability that the available rates at the end of the fixed rate is > 2.25%. I just suggested to continue overpaying 10% as it is part of their monthly expenditure like a bill. At the end of the day it is a difference of 2.25% and 2.65% (Trade republic net of dirt).

Also there is greater risk with Trade Republic, I know they have a version of 100k guarantee, but you could still lose access to your money and have it repaid later down the line.
 
DublinHead54 said:
It wasn't if interest rates go up they already have. OP is on a 2.25% fixed for 3.5 years, there is a non-zero probability that the available rates at the end of the fixed rate is > 2.25%. I just suggested to continue overpaying 10% as it is part of their monthly expenditure like a bill. At the end of the day it is a difference of 2.25% and 2.65% (Trade republic net of dirt).

Also there is greater risk with Trade Republic, I know they have a version of 100k guarantee, but you could still lose access to your money and have it repaid later down the line.
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Accept there is a greater than zero risk with TR and fair enough that that is considered.

But the future increase in mortgage rates isn't really relevant as when the rate goes up, money can be withdrawn from TR to make an overpayment. Unless I'm missing something which is always possible!
 
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