2012: the year that was . . .

There was plenty to pique the interest of savers and investors in 2012 – and a lot more to come in 2013

For the first half of the year, savers continued to take fright at the scale of the euro zone crisis, and ploughed their money into safe havens such as gold and German bunds. However, after ECB president Mario Draghi’s pronouncements on saving the euro during the summer, the pressure eased.

“There has been a small, albeit gradual shift away from safe-haven investing,” notes Ian Quigley, director of investment strategy with NCB Stockbrokers.

With many investors opting to place their money in short-term German bunds, when they come to maturity this trend is likely to gain pace, as fears over the euro zone crisis subside and investors opt to bring their deposits home to Ireland.

2 Health insurance got more expensive

The Irish health insurance market finally welcomed a new entrant in 2012 in the form of GloHealth; whether or not it can stem the tide of price increases remains to be seen, however. Since 2011, Irish consumers have had to stomach almost 15 price increases, pushing 60,000 people out of private health cover in 2012 alone.

And with more hikes on the way in 2013, as the Government implements its plans for risk equalisation and a permanent health levy, the expectation is that more consumers will give up their cover to take their chances on the public health system.

Already, Aviva has signalled that it will increase the cost of six plans on January 1st, while the VHI is to increase the cost of its Healthsteps Gold plan on the same date to €320. This trend is going to run and run.

3 Ulster Bank messed up its systems

It should have been a routine technological update but an error in its systems caused chaos for thousands of Ulster Bank customers last summer. The problems led to disruptions for more than two weeks, with branches inundated with customers who availed of extended opening hours to try and conduct basic banking transactions.

Royal Bank of Scotland chief executive Stephen Hester flew into Dublin to try and deal with the situation, as people showed up to branches with hard copy payslips looking to withdraw their salaries, even though the bank couldn’t keep an electronic record of the transaction. In the end, the issues were fixed but the debacle could end up costing the bank €100 million – while the cost to its reputation may hurt even more.

4 Deposit rates started to slide

As the balance sheet of the domestic banks finally start to appear more robust, the desperate dash to shore up deposits is coming to an end, and a sense of reality is returning to the savings market.

With a European rate of just 0.75 per cent, Irish banks were paying out far more in interest than was logical, while at the same time had to pay elevated rates to fund themselves.

Now banks are in a better position to reduce rates and turn their attention to making profits again. Unfortunately, this means it will be harder to earn a return, as deposit rates are pushed downwards across the board.

Take regular savings, for example. In October 2011, EBS was offering 5 per cent on its regular savings account, for amounts between €100 and €1,000.

Now, however, you can expect to earn just 3.1 per cent, while Investec was offering 4 per cent on a 12-month fixed term, but this has since dropped back to 2.6 per cent.

5 Men and women are equal . . . unfortunately

For centuries, women have fought for equality in politics, education, the workplace . . . and now the introduction of the EU’s gender directive means that both men and women will be treated equally when it comes to buying insurance premiums. But this time round, women might be ruing the decision.