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Welcome to Lyons Insights

Welcome to this latest edition of Lyons Insights.


In this issue, we first of all bring to your attention the access that Irish Life Health members have to a network of Minor Injury Clinics. This is followed by a piece that explains a significant opportunity that now exists for business owners to extract wealth tax efficiently from profitable businesses. Finally we take a look back over the last decade and consider some of the financial lessons that we can all learn from our experiences over these years. 


We hope there is something of interest to you.


Roisin & the team at Lyons Financial Services


Expert Articles
Minor Injury Clinic

Minor injury clinics give rapid access to efficient and convenient treatment and advice on minor injuries. These include sports injuries such as fractures and dislocations, and illnesses such as fever and infection. Irish Life Health offers a contribution towards the costs of attending one of our approved Minor Injury Clinics, depending on your plan. Our approved network of walk-in clinics covers up to 20 locations nationwide.

Click here to download more details.

The great new wealth extraction opportunity for business owners

Apart from the volatility in investment markets and everything else going on in the economy and the world in general, 2022 was also a tumultuous year in the world of pensions for business owners.


Apart from the volatility in investment markets and everything else going on in the economy and the world in general, 2022 was also a tumultuous year in the world of pensions for business owners.

This is where it gets a little technical, but if you are a business owner of a profitable business, it is well worth sticking with us here as there is an opportunity you need to be aware of. Otherwise, give us a call and we will discuss it further with you.

In July 2022 there was a major upheaval in the pensions world, when due to regulatory developments, all the main providers ceased to offer one-man schemes, commonly known as Executive Pension Plans. While schemes set up prior to April 2021 were unaffected, any schemes set up since then or in the future would have to comply with significant new regulatory requirements that were introduced under an EU Directive known as IORP II. It was simply not viable for providers to offer a product to meet these new requirements.

The market was thrown into a state of flux, with business owners wishing to establish new pension schemes being unable to make tax-efficient large company contributions.

However the Finance Act 2022 came into law at the end of last year, which opened up a significant and very attractive opportunity for business owners, particularly of profitable businesses. The change relates to Personal Retirement Savings Accounts (PRSAs), which up until the beginning of 2023 treated employer contributions as a Benefit-in-Kind for an employee from an income tax perspective. This is now no longer the case, with employer contributions to a PRSA not treated as a Benefit-in-Kind in the hands of the employee. This gives the employee full personal benefit of their tax relief limits, without having to allow for any employer contributions made.

But furthermore, and unlike company pension plans, the big opportunity in the new regulations is they do not define the level of employer contribution allowable with reference to age, service, salary or other pension benefits. The only factor that limits employer contributions to a PRSA is the lifetime Standard Fund Threshold (SFT) of €2million. This makes PRSAs extremely attractive now for business owners when compared to occupational pension schemes or master trusts, where employer contributions continue to be limited by salary, service and age factors.

Also, tax relief on all employer PRSA contributions can be claimed in the accounting period in which they are paid. This is unlike a special contribution to an occupational pension, where the tax relief must be spread forward over 5 years.


The Opportunity

The new opportunity is for owners of profitable businesses, who can now extract large sums of money from their business by making large-scale contributions to a PRSA, with the only restriction being to avoid funding past the SFT.  Also, if your spouse and/or your children are working in the business, the company can also fund pensions for them up to the SFT. That is a significant wealth extraction opportunity.

In addition, it’s worth noting that PRSAs differ to company pension plans when taking your benefits. First of all, you can get access to your benefits from age 50. Also with a PRSA, you can phase in your retirement by dividing your pension funds across multiple PRSAs. This option is unavailable when retiring from an occupational pension scheme.

So the previously unattractive PRSA has now become a fantastic wealth extraction vehicle for business owners of profitable companies. However as with all matters pension related, specialist advice and careful planning are needed. We would be delighted to help you.

What can we learn from the past decade?

Do you remember 2013? It sounds quite recent, but then when you think about the major events that happened that year, they seem so long ago. 

Do you remember 2013? It sounds quite recent, but then when you think about the major events that happened that year, they seem so long ago. That was the year that Nelson Mandela died at the age of 95, two homemade bombs ripped through the crowd of fans and runners at the Boston Marathon finish line, killing three and wounding nearly 300 others and Typhoon Haiyan killed over 6,000 people in the Philippines and south east Asia. It was also the year the word "selfie" became mainstream!

2013 was also the year that if you had invested money in the MSCI World Index at the end of March, 10 years later you would have enjoyed annualised returns of 9.44% p.a., even with the falls over the last 12 months. Even more telling is that interest rates were at 0% for much of this period, resulting in deposits being a very poor alternative in comparison.

So if you had the chance to step back in time in your financial life, what might you have done differently? The value in doing this is that while of course past performance is not a guide to future performance, there are always lessons to be learned. Here are 3 lessons that we think you can take away from the last decade.


A long term perspective usually pays off

When it comes to investing, enough time, patience and the power of compound interest are powerful forces. Even though this 10 year period saw an approx. 30% fall when Covid hit and another big sell-off as a result of the war in Ukraine, investors have been well rewarded, particularly with money in the bank not increasing in value.

Being invested in global markets for sufficient time and staying in the markets has rewarded investors over most 10 year periods.  The last 10 years are a great example of this. Time in the market is key, as opposed to trying to time the markets. Investors who stayed the course over the last decade and didn’t panic when markets fell, were well paid for their perseverance – remember that 9.44% p.a. growth figure...

So having a long term perspective and letting markets get to work for you are valuable lessons.


Continuous saving is important too

As we said above, investors who had money invested 10 years ago have done very well, However people who continued to save over the decade did even better. By continuing to save, you are actively growing your wealth yourself as opposed to just relying on the markets. These additional savings also enjoyed the growth over the last decade. Even when markets fell during this time, the regular saver was buying assets at these points in time, at effectively reduced prices. Who doesn’t like buying things at a “Sale” price?


Money is an enabler to help you live a fuller life

We are firm believers that the scorecard is not about how much money you have, it’s about what this money does for you. And we think the last decade has given us more lessons in this vein than most periods before that. Indeed, the "Covid years" taught us lessons that hopefully will stand to us for the rest of our lives.

The pandemic taught us all so much about the importance of health, the value of having access to an emergency fund for unforeseen events and having a financial plan that is resilient in the face of the most unexpected events. Covid taught us that a pandemic doesn’t select people based on means. It also taught us the importance of living the best life that we can, while we are able to do so. Seeing the suffering of the population of Ukraine in the last year just highlights this further.   

Don’t just focus on having more money and risk being the richest person in the graveyard. See money as a means to helping you to live the best life possible and make that your target.

I wonder what valuable lessons we’ll learn over the next decade?