Two Saffas in Ireland – Money and Banking

Two Saffas in Ireland – Money and Banking

The Republic of Ireland is part of the European Union and the Eurozone. The Euro is a stable and powerful currency, controlled by the European Central Bank (ECB). Let’s look at some basics related to money and banking for living in Ireland.

How much money do I need to more or less maintain my SA lifestyle?

Europe is an expensive place to live. When looking at maintaining your current South African lifestyle in Europe, a good rule of thumb is to convert your current ZAR salary to EUR and then doubling it. Even then, there are some luxuries that you’ll need to learn to do without, for example: cleaning services and gardening services. Labour in Europe is expensive and you will not have access to cheap manpower. On the other hand, this means that everyone who is able to work can maintain a fairly good standard of living, which means people do not need to turn to welfare services.

Banking

As a newcomer to Ireland, opening a bank account is difficult. Banks have extremely strict standards for what they consider to be valid proofs of address. It is not dissimilar to SA, for example, a utility bill is accepted, but these are difficult to obtain during your first couple of months in Ireland due to the way billing for these utilities work, not to mention the fact that housing is scarce and rental properties are usually taken within a day of being listed (this is not an exaggeration). Letters from your landlord or AirBnB hosts are not sufficient and will not be accepted.

Which traditional banks should you be looking at in Ireland? I can only speak from personal experiences and relay anecdotes. AIB is generally seen as a modern, tech-friendly bank with a good reputation. I’ve been cautioned against banks like Ulster and KBC as they are either leaving the country or being merged with other banks. Bank of Ireland is (again, to my understanding) a reputable bank, but a bit behind the times when it comes to technology.

So what are your alternatives? You can start off in SA already by opening a Wise (formerly TransferWise) account with a Euro-based sub-account. With this, you can at the very least earn a salary and transact on a day-to-day basis. Once you arrive in Ireland, you can also order a physical card from them. However, and this is a big caveat, your money is not insured with Wise. I have had no issues with Wise, but I also have an N26 account, which works similarly to Wise, but with the peace of mind that my money is insured up to EUR 100 000. Plenty of Irish nationals (especially younger and technologically-minded people) are also flocking to N26; the account can be opened with very little difficulty (you will need a valid proof of identity and a tax number for Ireland, also known as a PPS number), you can order a physical card, and the app is easy-to-use and loaded with features. It supports Apple Pay (and the Google alternative).

Again, I wish to stress that this was my solution and my anecdotal experience. I am not a financial advisor and you should do your own research.

IBAN Discrimination

You may (probably “will”) at some point experience what is termed “IBAN discrimination”. IBAN is the code that uniquely identifies your bank account within the Eurozone, including the country it is registered in and the unique number of your bank. For example, N26, mentioned above, is a German financial institution and as such its account IBANs start with DE. Some automated systems in Ireland (for example, Electric Ireland’s sign-up website) will declare the IBAN “invalid” because it is not an Irish bank. This is illegal. Countries and companies in the Eurozone may not discriminate against financial institutions simply for being registered in a different country.

At the risk of repeating myself, take note of the following:

  • Your employer in an EU country may not refuse to pay your salary, because of your IBAN. If you work for an Irish company, but bank with N26, your employer must respect your choice of bank account and IBAN. If they cite “technical difficulties” then they should get those fixed. It is their problem, not yours.
  • No company may refuse you service (or a debit order), because of your IBAN. If their automated online system gives you trouble, then they must manually accept your IBAN via the phone or a traditional paper form.

Any EU company or institution that conducts IBAN discrimination against EU-registered financial institutions is in violation of EU regulations and can face legal consequences for their actions. Report IBAN discrimination!

Interest Rates

Interest rates in the Eurozone are negative. You will not earn money on your savings; on the contrary, you may be charged monthly for storing capital over a certain amount. If you’re looking for capital growth, you’ll need to invest this money elsewhere. (Note: this does not mean that when you take on a mortgage or vehicle loan that those interest rates will be negative.)

Watch this video for an explanation of negative interest rates

Taxes

Like its SA counterpart, Irish income tax is progressive: the more you earn, the more tax you owe. If you have an idea of what your gross EUR salary will be, you can use a tax calculator to help you figure out your take-home pay.

Taxes may be high, but you get to see what your taxes go towards. The roads are excellent, the postal services work brilliantly, and even visiting a Garda (police) station or a driver’s licence / testing centre is a straightforward, efficient experience. Renewing your driver’s licence, for example, is an effortless process in which you make an appointment online, pitch up on the day, and be done with the process in 15 minutes. Yes, you read that correctly. Your licence card is then mailed to you (no, not couriered) and will arrive at your door within 3-5 days. Yes, you read that correctly as well.

Pay your taxes. Render unto Caesar the things that are Caesar’s. And in a country like Ireland, it’s all worth it, because everything just works.

Conclusion

There are many things to take into account when moving your lifestyle to Europe. Will you be staying in the countryside? If so, you’ll need to budget for a car and petrol (unless you can afford an electric vehicle). Are you staying in the bigger cities like Dublin, Cork, or Galway? You will be able to make use of public transport, but the rent is sky-high. If you’re a middle-class or upper-middle class citizen in SA, you’ll have to learn to do without cleaning and gardening services. You’ll even have to pump your own fuel. Things like clothes, food, and even household utilities like electricity are more expensive.

I’ll cover some of the topics like housing and owning a car in more detail in future blog posts. Until then, take care!

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