€244m in ‘biscuit tin’ punts drops in value

THOSE who have not yet cashed in some €244 million worth of Irish punts aren’t losing any sleep over it as it’s probably in their mattress.

Age-old habits of stashing cash in tins, shoes and beds may explain why so much of the old currency is still out there.

One of the world’s richest tennis players, Roger Federer, recently declared that a “big mattress” might be his salvation in the current world financial meltdown, but the Central Bank has served that one back by pointing out that unconverted punts will continue to devalue over time.

Latest figures from the Central Bank show that €244m worth of Irish punts is still being held by people, unconverted into euro and losing value.

That figure only declined by around €4m last year and only relates to notes. Approximately another €127m is still unchanged from old coins. Over the seven years since the euro was introduced here, the value of unconverted punts has fallen by 22%.

According to a spokesperson for the Central Bank, a total conversion of outstanding punts is not expected, but “bits and pieces” are being changed into euro on a daily basis.

They said the overall amount of unchanged money is pretty much par for the course for most EU member states which joined the eurozone in the early part of this decade.

However, Bank of Ireland Life yesterday warned about the dangers of stashing cash at home, in the current climate of falling confidence in the banks, lowering interest rates and general market uncertainty.

“This significant sum highlights the creeping loss ‘biscuit tin’ savings bring to the value of nest eggs even in times of low inflation.

“These losses don’t get the attention that stock market losses do. Yet they destroy the value of savings more predictably and consistently than market falls ever have. People with a lump sum who are looking for security need to bear this in mind,” said Brian Grimes, head of investments at Bank of Ireland Life.

The bank has launched two new capital-protected investment products — Secure Advantage 2 and Secure Plus 2.

“We have learned that doing nothing with the money we have earmarked for the long-term is not an option as its value will diminish over time. We need to go for growth with this money, and while not a prediction for the future, equities have historically provided this growth given the time to do so,” said Mr Grimes.