QUESTIONS & ANSWERS:Reading a couple of letters in your 'Q&A' column last Friday has prompted me to query the payout on my wife's SSIA which has just matured.
She had been saving the maximum amount (€254) over the five years and was expecting something in the region of €20,600 on maturity.
She was slightly disappointed when the final figure turned out to be €20,014.
This was from an SSIA "variable" account with AIB which seemed to pay quite paltry interest rates ranging from 1.41 per cent at the beginning to 2.74 per cent at the end.
I was surprised to see that one of your correspondents had a 4 per cent fixed account with AIB. I don't recall ever being offered such an account.
Can you let me know what you think?
Mr MS, e-mail
Your wife's contributions over the five-year term amounted to €15,240. With the Government's 25 per cent bonus, this increases to €19,050.
As you point out, net interest of less than €1,000 over the period is little to celebrate - without the Government bonus, this would have been a strongly underperforming investment.
However, it is a fact that your wife - and hundreds of thousands of others - opted for the ultra-safe but low-risk alternative of a deposit-based SSIA at a time when Irish interest rates were trundling along at historic lows.
AIB certainly did offer a 4 per cent fixed rate deposit account option - in fact the various institutions all offered fixed rates of between 4 per cent and 4.55 per cent and these were reported in The Irish Times and elsewhere.
If it's any consolation, your wife's return broadly matches that of other variable deposit rate SSIAs that I have seen from other providers.
On the subject of AIB's 4 per cent rate, the original correspondence a fortnight ago queried the €740 difference upon maturity of two SSIAs taken out at the same time by a couple and contributing identical amounts - one to an AIB 4 per cent fixed rate account and the other to a An Post account, also offering 4 per cent.
At the time, An Post attributed its lower yield to timing issues related to the lodgment of the Government bonus to customers' accounts. Still, the gap seemed too large.
The customer contacted An Post again after 'Q&A' appeared. It has since emerged that they did not hold a fixed-rate SSIA at An Post - which offered 4 per cent - but, rather, a lower-yielding variable rate account.
The original correspondent, Mr L, has since been in touch to acknowledge his mistake and note that An Post dealt very promptly with his query.
For what it's worth, the An Post account amounted to less than €20,000 on maturity.
Inflation Check
I have now got my statement of account from my SSIA provider. My query concerns the composite value of the inflation rate during the period from April 2002 to April 2007.
Can you provide an all-over inflation figure for this five-year period. It is needed to properly evaluate the actual increase in real terms.
Ms C.W., email
Between April 2002 and April 2007, the consumer price index - the indicator with which the Central Statistics Office measures domestic inflation - rose from a reading of 102.3 to 120.6.
That amounts to an increase of 17.89 in percentage terms.
Investment Losses
I'm intrigued to read that losses on an Irish Life Scope investment cannot be offset against capital gains. I too have suffered a 50 per cent loss to date on my investment. In 2006, I wrote to Revenue and asked if, upon cashing in my investment, I could offset the loss against other gains.
I have a letter from Revenue stating: "Please note that a loss incurred on your investment can be offset against capital gains in the same year that the loss is incurred, or can be carried forward to future years to offset against possible future gains".
Mr ER, Dublin
I'm intrigued too, having confirmed this precise point recently with Revenue. Just in case, I put your point to them and they reiterate that the principle applying is: "Where gains on the disposal of an asset are not chargeable gains, losses on the disposal of the asset are not allowable losses".
In relation to your Irish Life Scope investment, any gains would have come under the income tax regime - either taxed annually at the basic rate of income tax under the old regime or, for funds launched since 2002, at the basic rate plus three percentage points under what is called the "gross roll-up" regime.
Your losses on the Irish Life investment are not chargeable against capital gains.
Obviously I have not seen the full letter you hold but, if you retain any doubts, I would contact the Revenue official with whom you were dealing once again.
Please send your queries to Dominic Coyle, Q&A, The Irish Times, 24-28 Tara Street, Dublin 2 or e-mail to dcoyle@irish-times.ie. This column is a reader service and is not intended to replace professional advice. Due to the volume of mail, there may be a delay in answering queries. All suitable queries will be answered through the columns of the newspaper. No personal correspondence will be entered into.
