January 2025 has kicked off with major events, including the formation of a new government and Storm Éowyn, which caused significant disruptions.
Additionally, there are several financial changes will impact your personal finances.
If you haven’t already, now is the time to set financial goals and plan for 2025.
With Budget 2025 changes now in effect, reviewing your budget and entitlements is crucial.
Financial Advice
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Key Financial Changes in 2025
Tax Changes: More Take-Home Pay
- Income Tax Adjustments & Universal Social Charge (USC) reductions.
- Increased Rent Tax Credit for renters.
State Pension & Social Welfare Enhancements
- Weekly Payment Increases across most social welfare benefits.
- Child Benefit Increases to support families.
- Newborn Baby Grant introduced.
- Higher Working Family Payment thresholds.
These are just some of the financial changes for 2025. To maximise your benefits, ensure you’re taking full advantage of available tax savings and entitlements.
Smart Financial Planning for 2025
Set Your Goals:
- Plan for major purchases, investments, and holidays.
- Assess your spending – Are you using your money wisely?
- Identify areas for cost savings on big expenses (insurance, utilities, mortgages, etc.).
- Set a savings goal and automate transfers to your savings account.
Changes That May Impact Your Finances
Interest Rate Adjustments
- The European Central Bank (ECB) plans four interest rate cuts in 2025.
How This Affects You:
- Lower deposit rates on savings accounts.
- Mortgage rates are expected to decrease.
What You Should Do:
- Consider regulated investment options with better growth potential.
- If you have a mortgage, check if switching could offer better value.
New Banks Entering the Irish Market
- Bankinter (owner of Avant Money) will become a fully licensed bank.
- Monzo, a UK-based digital bank, is preparing for entry into the Irish market.
- Revolut continues expanding its services for Irish customers.
What This Means for You:
- More competition in banking could lead to lower fees and reduced loan interest rates.
Market & Economic Outlook
Investment & Markets Outlook
- Higher market volatility is expected, but US equities may perform well due to policy changes.
- The bond market presents opportunities, though risks remain due to increased supply, political uncertainty, and shifting investor sentiment.
Investor Advice
- Stay vigilant and ensure you understand your risk exposure.
- Review your investment strategy to align with market trends.
Housing Market Trends
- House prices continued rising in 2024, driven by demand exceeding supply.
- Price growth is expected to slow to 7% in 2025, but supply constraints persist, particularly affecting first-time buyers.
Economic Performance
- Ireland’s economy is projected to grow by 4% in 2025, fuelled by a strong labour market and favourable external conditions.
- Unemployment remains low, supporting consumer confidence and spending power.
Key Financial Planning Recommendations
✔ Stay Informed: Monitor policy changes and economic updates that could impact your finances.
✔ Review & Adjust: Regularly reassess your budget, savings, and investment strategies.
✔ Seek Professional Advice: Consulting a financial advisor can help you make informed decisions.
By staying proactive and informed, you can successfully manage your personal finances in 2025’s evolving economic landscape.
The information provided is for general purposes only and does not constitute financial advice.
Always consult a qualified financial advisor who is registered with the Central Bank of Ireland for personalised guidance.
