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Information gleaned from financial papers and Teletext in the UK

NOTICE : I understand that the Financial Services Authority do not like all and sundry giving financial advice.  As I consider myself in that category (all and sundry) I would like to state that none of the following should be considered as advice.  I merely copy what I have read in newspapers and the like and try to point people in the direction of useful information. To find an Independent Financial Adviser (IFA) try www.unbiased.co.uk.
As I have said from the beginning, "All the following details are to my knowledge correct at the time of uploading but are supplied as information only and in no way implies advice and the author cannot be held responsible for any actions which you take as a result of what is written". Also, as interest rates and investment charges can change at any time, it is imperative that, before acting on the information below, you check with the organisation concerned. If you find any of the rates are inaccurate, please email me by clicking Here
General disclaimer


To find sections e.g. on Pensions on this long page please use Ctl + F and type in 'Pensions'.
n.b Links on this page change rapidly. Apologies if you get a 'Page not found' error. Please let me know.

28th July For all you folks who are up to date with your ISAs Coventry Building Society is offering 3.7% fixed until August 2012.  But that is truly fixed. Apart from going Dutch with Ing, the next best looks like Sainsbury's Easy Saver at 2.7%.
If you don't mind moving ISA savings about and are getting less than 2.75% (and many are) then Nationwide might suit until their bonus year ends in 2011. The you would be on the move again. But if you are willing to tie up your ISA for 4 years they will pay 4%.

19th July If you didn't grab the Index linked National Savings Certificates that I mentioned on the 23rd May (below) you are too late because they have been sucking in all the savings from every other savings provider (in anticipation of rising inflation).  They have been withdrawn, sorry !  They still offer a snag free 2.5% ISA, though.

July 2010 Not a lot of exciting news on the savings front. There are some ISAs paying 2.75% for an introductory period. And the Post Office has a one year ISA at 3%.  The AA is paying 2.8% on non ISA savings (including a bonus) and Ing is advertising a no strings account at 2.75%.  Nationwide is doing a 4% 3 year fixed Rate Bond but it would cost you 9 months interest if closed early.  

Moneysupermarket has done a deal with Halifax that can make moving your current account to them worthwhile. If you apply through MoneySupermarket you get a £50 bonus. The Halifax Reward Account pays £5 (tax free) each month if you pay in £1000 (even if you take most of it out immediately). After the first year overdrafts can get expensive but, if your account stays in the black, it can be useful.  

The Budget. A VAT rise to 20% from 4th January 2010 may give shops an unexpected Christmas boost. Pensions will be linked to wage rises (but not those of bankers - sorry) and not less than 2.5%. Child Benefit is frozen for three years (why not taxable ?) Personal income tax allowance is to be increased by £1,000 in April to £7,475 - worth £170 a year to basic rate taxpayers. Capital Gains Tax will rise from 18 - 28% for people earning over £40,000. Housing, Tax Credits and Disability Benefits are all likely to be reduced.  But households getting less than £40,000 may get more. That'll be a nightmare to administer.  Is young Johhny part of the household or not ? Maybe he will be kicked out at last !

Purchased Life Annuities (Article extracted from www.thisismoney.co.uk) Hard-pressed savers were given no cheer last Thursday when the Bank of England base rate was kept at 0.5% for the 15th successive month. Continuing low interest rates are forcing savers to consider new ways to generate the income they need. And, for older people, returns of up to 14% have put Purchased Life Annuities (PLAs) firmly on some savers' agenda. A PLA involves handing over capital in exchange for a regular income. While the cash cannot be recovered, unlike a bank or building society savings account, the income is guaranteed for life. Buyers also gain from the unique tax rules surrounding a PLA.  A large part of the regular payment is treated not as income, but as a return of the buyer's capital. This element is not taxed.....
Take the case of a man aged 70 who buys a £20,000 purchased life annuity. The gross annual income from this is £1,444. But £1,194 of this income is called the 'capital content', so the buyer is taxed only on the remaining £250. This means a net income for a 20% taxpayer of £1,394. To earn the same after tax, he would need to find a savings account paying 8.7% gross. The equation improves with age. The same £20,000 earns a man aged 80 an income of £2,260 a year after basic-rate tax. Matching this requires an account paying an improbable 14.1% gross. Annuity rates are slightly lower for women because they have a longer average life expectancy. A woman aged 70 investing £20,000 would receive £1,376 a year and an 80-year-old would get £2,099. But people with health problems may be able to get an even better deal.  See rates at http://www.sharingpensions.co.uk/annuity_rates_purchased.htm

26th May  For over 50s Saga have a 3 year fixed ISA at 3.75% (slightly less if you want monthly income).  It is run by Birmingham Midshires, so be aware that they are in the Halifax, Bank of Scotland, AA, Intelligent Finance group with regard to the £50,000 guarantee.  Transfers in are allowed.    So, if you have stacked up £30,000 of ISAs it would yield £1,100 per annum or £92.25 a month tax free.
They also do an instant access ISA at 2.6% (variable and including a 1% bonus for 18 months). See  http://www.saga.co.uk/money-shop/savings/fixed-rate-ISA/

Sunday 23rd May. With the Retail Price Index (RPI) hitting a high of over 5% suddenly Index linked National Savings are attractive. For a good explanation see Money Savings Expert at http://www.moneysavingexpert.com/savings/savings-accounts-best-interest#guaranteed. This is for 3 year 20th Issue Savings Certificates. You purchase from £100 to £15000.  They are tax free and are not affected by any cash ISA limits.  Sorry this has been withdrawn as of 19th July.

Interest earned in year 1 (provided you don't close account) = RPI +0.85%
Interest earned in year 2 = RPI +0.95%
Interest earned in year 3 = RPI +1.21%
So, even if you cashed them in immediately after the first year (and assuming the current RPI level continues) you could get as much as 6% tax free. And for higher tax payers this would be a real bonus.

Regular Saving Accounts used to be attractive but they are no longer easy to find (at anything like a good rate). Halifax is now down to 2%. Unusually they accept up to £500 a month.   Barclays has an 8% job but with many strings.  Northern Rock pays 5% and no strings.  But you have to pay in via a local branch.

Monday 17th May. After the stock market took a considerably bashing, mainly due to worries over European debt problems the FTSE - especially banks - was up a little by Monday but with other markets (including the US) still showing losses. The Euro was even lower against the dollar. That usual haven in times of concern, gold, reached new highs for the yellow stuff as well as the mining shares.
Savings : Barclays are still topping the ISAs at 3.1% (an introductory offer) and Ing is offering 2.75% for an easy access savings account but just for new money. But the National Savings Direct ISA at 2.5% beats this.

13th May 2010  So, we have a coalition government. Initially the FTSE breathed a sigh of relief that a deal was done. The Bank of England also appeared to approve.  But the pound and Euro were lower against the dollar and even the beleaguered Euro and then the stock market followed suit.

The only bright light on market was HSBC, which reported good results, mainly as a result of its Eastern dealings - but even the USA branch made a little profit. So, should we savers worry in such times ? Despite Spain being in an even worse mess another strong bank is Santander/Abbey, still offering a 3.3% ISA if you have a stack to transfer there and NS&I still offering 2.5% on its Direct ISA

Under the matress savings  and there is always this option of course

29th April  I was surprised to see what percentage of the working population is employed in public service in one way or another.  As one of those (retired|) it is interesting to see that despite inflation at the rate of 3.5% my pension will be the same as last year for the next twelve months. Many people will be affected by this. My ex employers pointedly mentioned that if I (as a consequence) had any money worries I could contact 0800 012 1656 or visit http://nowletstalkmoney.com, the site set up by the Dept.of Work and Pensions for people in distress. Worth knowing.

Sunday 25th April  With inflation on the rise (the annual Consumer Price Index is now at 3.4%) and interest rates being held down to stave off recession, it may be time to rethink savings. If your instant access account is paying (on average) 0.73% your capital is losing value at a rate of 2.82% even without taking tax into account. By shopping around you might find an ISA paying as much as 3.2% (Santander and Alliance and Leicester) or Barclays on 3.1% or Coventry BS on 5.25% (one year) but even these are barely keeping pace.  The only bright spot in times of higher inflation is the NS&I Indexed linked Savings Certificate, paying Inflation plus 1% tax free but only pays this on maturity and that is FIVE YEARS. You CAN cash them in beforehand but your would lose the inflation element if you do this in the first year. I hate to say this but over the last year the stock market has been a better bet. But who knows whether the trend will continue. For high yielding Income Bonds. which can be sheltered in ISAs and SIPPs see http://www.uswitch.com/investments/ These can pay as much as 7% but there is some risk involved.

Sunday 29th. There can't be too many people looking for non ISA savings with the miserable rates on offer.  After all if people have any cash to save there is a £10,200 ISA gap to fill in April and with Santander (Abbey) Alliance and L offering 3.2% Instant accounts one could even keep up with inflation. But note those rates are 'introductory' and may disappear like (we hope) the snow in Spring.  Saga offer a fixed 3.9% cash ISA over three years. Transfers are allowed. One can withdraw cash subject to interest penalties.  Transfers from this to stocks and shares ISAs would allow you to increase your cash ISA during the year.

24th March Budget.  Not a lot for oldies. A little relief for first time buyers and a heavier duty levied on house sales over a million. A little more on alcohol and tobacco and the 3p per litre increased duty on fuel will be brought in gradually over the year. The current level of Cash ISAs has not been changed but ISA limits should now rise annually in line with inflation.   Winter Fuel Allowance : Over 65s will  continue to receive £250 while the over-80s will gain an extra £400 next winter.

Lower unemployment and fewer company closures has meant higher tax returns than expected, so government borrowing has been reduced a little. Cuts in government department expenditure have been outlined but precisely what they will mean  to us is difficult to assess. The stock market hardly budged.

The current Income Tax rates can be found HERE

March 2010 ISA's It is the ISA time of the year... making sure that, if you want to, you use all of this year's allowance. It is reported that 16% of savers haven't invested in ISA's because they find them confusing.  Another 35% are put off by the low rates.  But it is estimated that savers have missed out on £13 billion since they were started 10 years go. And yet ISA's are tax free, do not have to be declared and are even exempt from Capital Gains Tax. So, they are not much help to a non tax payer, are more attractive to a 20% tax payer and extremely attractive to someone paying a higher rate than that.
From 6th April this year everyone over 16 will be entitled to the ISA allowance of £10,200, of which £5,100 (p.a.) can be put into Cash savings.  The rest can be used to 'shelter' investments (including some bonds) or, if you don't use your Cash ISA allowance, the whole £10,200 can be put in ISA investments. Although you can add to your cash ISA during the year, up to your limit, you cannot start another ISA (say, with a different company) Many (but not all) organisations allow you to transfer your previous holdings to their scheme. Some ISA's are 'Instant' while others are fixed for a longer period. Generally these pay more.

1st March 2010 NEW: Nationwide is currently offering a 2.5% Cash ISA.  It does include a big bonus until 30/11/2011 but one free withdrawal is allowed. Otherwise you would lose a couple of months interest. They allow transfers in from other ISAs.  N S & I offer 2.5% as well but no transfers.

21st Feb 2010 Interest rates remain low for borrowers (mortgage, NOT credit card) and savers and no-one will hazard a guess when they will rise. So, finding decent saving rates remains difficult. In view of the 3.75% inflation rate the only way one could even keep savings intact this month would be by tying up your cash.  BUT the jump in inflation was inevitable with the increase in VAT and high cost of fuel. IF you thought inflation is here to stay, almost the only protection would be something like National Savings Inflation linked Saving Certificates. The 3 year 19th Issue pays the inflation rate plus a little more each year - and they are tax free.
The Post Office  is offering a 3% fixed rate cash ISA for one year. Transfers in are allowed. This ISA is provided by Family Investments, which is FSA authorised and regulated, but is registered with the Bank of Ireland. If you want your cash before the year is up there is a 90 day loss of interest. To preserve your annual allowance you would need to transfer it to another ISA.

For non ISAs, barely keeping up is the A & L 3.9% 2 year bond but fixed for that period and for deposits of £25,000 + (!). More attractive is the Coventry BS 3.15% (easier access) Postal account, which includes a one year bonus of 1.15%. About the only thing that beats the current inflation rate is Nationwide over 50s 3 year ISA  Bond at 4% net

4th Feb 2010  Remember, if you are over 50 your cash ISA allowance is £5,100 this year. National Savings are still giving 2.5% on their Instant ISA (but no transfers in from other ISAs). This is equal to 3.12% gross for a Basic tax payer. Other organisations are complaining this is unfair. Most who offer more have strings, such as a bonus, a minimum sum or other restriction e.g. You can get 3.9% at Santander on £25,000 if you commit it for two years or a 3% ISA including one year bonus. But the normal ISA rate for Santander and Alliance and Leics is 2.75%.  Transfers are allowed.  I have just heard from Halifax that my ISA rate will be reduced to 0.5% shortly.  They obviously don't want my business !  They offered 3.5% on a two year deal. Hmm. Coventry BS  (0845 766 55 22) is offering 4.25% fixed until 31.08.12 but no withdrawals and this cannot be sheltered in an ISA.

26th January 2010 The new Begrand site has got off the ground and there is a n article on investing for grandchildren HERE

20th January 2010. Sometimes you wonder about the stock market.  Yesterday's news was that the inflation rate had gone up to 2.9% (and the market went UP).  Today the news was an unexpected fall in unemployment (the first in 18 months) and the market went DOWN. But the higher inflation rate puts the Bank of England in a quandary.  One wonders if the rate will begin to move up, with a corresponding affect on savings and mortgages. It is certain that we will have less money to spend in 2010. But I really believe that HMGov. took the only action open to it. The alternative would have been unthinkable. Looks like the unpopularity of those Bankers Bonuses is finally having an effect, with Barclays cutting back and Obama taking a firm line. This affected bank shares generally but I think they will recover. After all it might mean a better prospect for the shareholders.

Santander have entered the Cash ISA field with 3% including bonus. Barclays are offering 6.5% on an ISA Bond up to £10,200 for over 50s after 5th April this year.  It is a 6 year bond with no guarantee on your capital but would yield £663 per annum tax free or around £54 monthly. See HERE

January 2010 A good site that deals with GRANTS of various kinds is at http://www.moneysavingexpert.com/protect/grant-grabbing Includes the new grant for laptops and broadband for kids from poor households.

January 2010 Credit Cards. I use a Debit card and have always considered Credit cards to be an invention of the devil.  But they are hugely popular, so is there any way in which you can win? If you take a look at http://www.moneysavingexpert.com/loans/plastic-loans you will see that MBNA and Virgin offer exceptional terms for transferring cash to your bank account, providing (a) you are looking for a longer term loan (up to 16 months) (b) pay a one-off fee, (c) make a direct debit covering the minimum monthly payment and (d) tie up the whole thing by the end of the period. To quote from the site: "Top Short Term: The Virgin card is 0% for 16 mths with a 4% fee (slightly higher than for normal transfers) so it wins provided you can repay in that time" But don't use the card for purchases unless you want to pay more.

11th January 10. There has been little to report for a month. The Bank of England has kept the rate at 0.5% and some are suggesting that it may stay the same all year, obviously having an effect on savings. Uswitch has spotted that loans by the major lenders have also come down to between 7.6 and 8.6%. So the banks are ONLY making 7 - to 8% out of borrowers ! That YOU should be so lucky. The only way to get easy access and as much as 3.3% is with folks like Coventry BS (including a one year bonus)  You have to keep your eyes open for rates, which can slyly be reduced without telling you. Fixed rate ISAs of 1 to 2 years can be found at 3 to 3.5% and, for a taxpayer, are still useful. Even the NS & I Direct ISA still looks attractive at 2.5%. Safety and no ties.
But folks on Fixed Rate Mortgages might get a pleasant surprise when they end, as some SVRs are comparatively low e.g. C & G , IF and Nationwide, all on 2.5%, compared with a number of Building Societies on more than twice that. This can make hundreds of pounds a month difference in mortgage payments.

11th December 09  One of the features of the Pre Budget was a promise to raise the State Pension by 2.5%.  However, this does not affect the SERPS element of the pension

25th November 2009 The news is finally out : It has been decided that the banks did not charge for unauthorised overdraughts unfairly.  People who were hoping that they would have these charges repaid will get nothing, unless they feel so strongly that they are willing to take on the banks themselves.

19th November 09 Not much new on the savings front by I see that Sainsbury's Bank has a 3.2% on line one year saver account and National Savings have a 3.95 % one year growth fix.
Think rates are going to stay at their present level ? You can get as much as 4.5% for a five year ISA (Nationwide BS) and a number of Building Societies pay well over 4.2% for 3 or 4 years.

1st November 09 November is "Will Aid Month". Each year many solicitors will draw up a will for a donation to a charity, suggested as £75 to £110 (a couple). Click the link or phone 0300 030 0013 (03 numbers cost the same as standard landline numbers (e.g. 01/02 numbers) even from a mobile phone)

Lloyds are hoping to break free from government control by raising £13 billion.  Royal Bank of Scotland is under pressure to dispose of assets, including international investment branches, Direct Line and Churchill Insurance and Green Flag. Repossessions of houses by Northern Rock (due to late mortgage payments) are expected to be down this quarter. But Northern Rock is a long way from becoming independent.

NS& I (National Savings) Growth or Income bonds are now available by phone, post or on line and are up to 3.95% gross (one year fix) and 4,25% for a two year fix. So, even for basic rate tax payers the minimum received would be 3.16%, so beating their Direct (on line) 2.5% ISA. See rates HERE  You get a little less if you want monthly income from their Income Bonds. If you are a non tax payer (e.g. a non working wife) you should be sure to apply to have the income paid net of tax. Get form R85 from HERE. For a non tax payer this might be the best move. On £10,000 the monthly income on a five year Income Bond would work out at £37.50 and this would be fixed, regardless of how other interest rates vary.  You CAN get your money out early at the cost of some interest. Mind you Nationwide is offering 4.75% for a five year bond and Yorkshire is even topping that with 5.3%. On that, £10,000 would yield £530 per annum for a non tax payer.

Check for the latest Benefits, Pensions and Jobs at Department of Works and Pensions page.  U.K. Tax exemptions (last three years). http://www.hmrc.gov.uk/rates/it.htm

Credit Card proposals Although credit card debt has reduced slightly it is still running at £54 billion. A third of card holders fail to clear their debt each month, resulting in punitive charges. Around 11% just pay the minimum charge of around 2% of the debt (to avoid the even more punitive charge), which means their debt gets ever larger even if they stop using the card. The government proposes to crack down on credit card companies. They propose that companies should use payments to pay off the most expensive items (such as cash withdrawals) first; that they should demand a higher minimum payment each month; that they should not increase borrowing limits or issue cheques without a request from the card user; or increase interest rates on existing borrowings.  And that they should issue an annual statement showing all charges made. If you have an opinion on this you can email your thoughts to cscr@bis.gsi.gov.uk

9th October 2009  New ISA rules  It is quite complex so this is extracted from the "Brilliant with Money" page HERE "A new £10,200 annual limit comes fully into force (for everyone) on 6th April 2010 for the start of the 2010/11 tax year. However, if you are 50 years old before 6th April 2010 you are now able to take advantage of the new higher allowance in the 2009/10 year. This new annual ISA allowance works in much the same way as the old £7,200 limit – up to half can go into cash and the balance of the allowance can go into investments within the ISA tax wrapper. This means a maximum of £5,100 in the cash ISA component and the balance (another £5,100) in the stocks and shares component. But watch out for the rules : Only ISA managers can transfer ISAs. If you try to do this yourself, it will be treated as a withdrawal and you will lose the related ISA allowance. If you want to move money between providers then you should ask your ISA provider for the relevant transfer form and let them process this on your behalf. You can transfer part of a previous tax year ISA to a new provider but if you want to transfer the current year ISA you have to move the whole lot at once. Partial transfers of your ISA for the current tax year are not permitted."

National Savings have almost doubled their Direct (on line) cash ISA rate to 2.5%, leaving their Premium Bonds languishing.  That is worth 3.12% to the standard rate tax payer. But purchase at the Post Office, by phone or post for this rate is no longer possible. For top ISA rates see http://www.money.co.uk/savings-accounts/isa-savings.htm. However, NS& I bonds are available by phone, post and on line and are up to 3.95% gross (one year fix) and 4,25% for a two year fix

16th Sept 09. With green shoots in America and the Far East the stock market powers on over the 5100 mark, with investors anxious not to be caught without shares in a bull market, despite the caution being expressed by pundits who have been caught before by false dawns. Meanwhile there is little to report on the savings front apart from the offerings below. City Treasurers, having been burned by the Icelandic Bank debacle are now going for anything safe, regardless of the interest rate.  This is affecting the amount of cash that Building Societies have to lend.  
Despite the widespread condemnation the Obamas and Browns of the world have had to put up with, the shout over the water is "Why did you let Lehman Bros go to the wall?" You can please some of the people some of the time....  Personally, I am quite pleased that my life's savings didn't go up in smoke last year, no matter what the papers say.

24th August 09 Equity Release Schemes.  These are the ones where people agree a loan on the equity of their house.  But the interest on the loan, which can be at 7.34% (e.g. Aviva) or as much as 16%, compound, is usually added to the mortgage (this is termed a 'roll-up equity release'). So, if the loan is taken out when someone is around 55 it can grow ever more rapidly until it equals (or exceeds the remaining value of the house (especially at times when house prices have fallen).  Even if house prices rise slowly the value of the house may not equate to the loan by the time the borrower reaches 85. At such a time the lender may try to evict the householder and sell the property to regain their cash. To quote the well known financial adviser, Mark Dampier "These deals should be an absolute emergency, a last resort, and even then only for the very elderly"

11th August 09 Piggy's bankruptcy information website was launched after Mark Davis trained to help others,  following his own bankruptcy in 2006.  It is a 'not for profit' site.

The Halifax Reward current account, launched on Monday, rewards savers with a monthly net cash payment after tax of £5 when accounts are funded each month with at least £1,000. This is the equivalent of a credit interest rate on that £1,000 of 7.5% for lower rate taxpayers, but, uniquely, the payment is handed-out irrespective of balance. So the £1,000 does not need to stay in there.

With savings rates getting lower by the week folk are looking round for something better.  The best ISA's now pay as little as 3.0%, barely keeping pace with inflation.   http://www.thisismoney.co.uk/corporate-bonds, mention that some 'Investment Grade' Bonds (considered pretty safe) are paying over 5%. What is more they suggest that Cash ISAs might be transferred into these.  And, by the way, there is a much higher limit because they are related to the Stock Market. Not wanting to give advice, I can only suggest that you take a look at the link and see for yourself.

**IVPPs  H.L. also sent me information about Immediate Vesting Personal Pensions (IVPP) where people under 75 can arrange an annual pension payment at a far higher rate than is now available from savings. There is a limit each year that you can put away and the money is lost on death but, as an example a man of 74 would receive as much as £211.21 a year for the outlay of  less than £2000, which is over 11%. Younger people and women would get less but even at age 50 a woman would get over 6% for the rest of their lives.  The pension is taxable and, once committed cannot be withdrawn. But, if you feel you will beat the odds and expect a long life, this is where an IVPP would pay off handsomely !

Safe Savings? Good article on this important subject HERE  and http://www.which-savings-account-4u.co.uk/

Had a request from the Norwich and Peterborough Building Society to add a link to their site, which offers competitive saving and mortgage rates. See http://www.npbs.co.uk/savings/  

Regular Saving Schemes seem to be keeping their end up. See Barclays, HSBC, Halifax, A & L and several others

USEFUL LINKS:

Chelsea ;  Anglo Irish Bank phone or post (0845 455 2222); The Bank of Scotland ;   Birmingham Midshires  (08456 03 66 01) ; Saga (0845 603 2292) ;   Alliance and Leicester (08000 68 66 99); The AA ;  Halifax ;  Nottingham BS (0800 077 6777) Nationwide ;  Ing Direct ;   B & B ;   Intelligent Finance ;  Natwest ;   Tesco ;   Yorkshire BS ;   Abbey (Santander) ;  Kent Reliance BS (08451 22 00 22)  Nottingham BS  (08008 22 38 50) Norwich and Peterborough BS  ;  National Savings ; HSBC

End of Savings Section  ****************** 

The Financial Services Compensation Scheme assures savers that savings in UK banks and building societies are safeguarded to the extent of £50,000 per person (£100,000 for a joint account). This only applies to each organisation which has a banking license. But, with so many amalgamations recently, how is your money covered ?

The following share only ONE License so cash in more than one of the organisation in each line is only covered to a TOTAL of £50,000

The Bank of Ireland/British Post Office and Anglo Irish Bank are covered by the Irish Government.  
Ing/Kaupthing/Heritable are covered by the Dutch Scheme.  
National Savings and Northern Rock are covered to 100% by the UK government

The ongoing tale of woe which I catalogued from April to November 08 is now ancient history so has been cut from these pages.

Which banks and building societies have not weathered the storm ? (Current owners in brackets) Alliance and Leicester (Abbey/Santanda), Barnsley BS (Yorkshire) Bradford and Bingley (Mortgages nationalised, Savings went to Abbey) Catholic BS (Chelsea) Cheshire BS and Derbyshire BS (Nationwide) HBoS (Merged with Lloyds) Heritable/Landisbanki and Kaupthing Edge (Savings to Ing) Icesave/Landisbanki collapsed, savings assured by HM Gov. London Scottish Bank (In administration) Scarborough BS (Skipton BS) Northern Rock (Nationalised) Anglo Irish Bank (nationalised). A sorry sight all round. Let us hope that things settle down in 2009.

Tuesday 14th October So the die is cast. The government has become a large shareholder in three main banks (not HSBC or Barclays), much to the relief of many people. HBoS and RBoS bosses have fallen on their (rather blunt) swords (probably relieved to take early retirement) and the country is saddled with a huge debt but with assets which, in normal times, should be worth a great deal more.  So, where has all this cash suddenly appeared from that was not available for so many important services hitherto ? Well the majority will join the already burdensome National Debt, which most countries now carry (apart from Norway which, wisely, used its oil revenue to get rid of it).  What is the national debt ? At the top of every stock market listing you will see Government Funds, many of them 'dated', at which date the government has to cough up the cash.  Meanwhile they pay interest to people and institutions who hold these bonds. Because the average interest in such a safe haven is only around 4.5% most investors shunned these in the past, instead putting their money in Icelandic banks paying a couple of percent more.... and are ruing the day. All those massive pension funds now, in hindsight, wish they had taken up War Loan 3.5% (perpetual) steady as a rock (rather than 'safe as houses!').
So, we can expect more such government loans in future and our children will have to pay for them. Now, hopefully, tax reduction will no longer be the cry of all the political parties as we enter the new and more realistic world where we have to pay for the services we expect. The party is over.

The Financial Services Compensation Scheme.  Where would the £50,000 per account come from?  Under the scheme the FSCS has the facility to demand cash from ALL major financial organisations. Currently it has an annual limit of £4 billion. As this is nowhere near enough to cover one of the bigger banks the government has the power to lend further cash to the scheme, but would require interest and repayment from those institutions over the years to come. In theory the compensation will not be paid for by the taxpayer. This is not the case where a bank is nationalised, where the government has to fund it from debt (or reserves - if any) and would undoubtedly mean a higher tax burden in the long run, unless the bank can be later sold off to reduce the national debt..

Banks are sneakily pushing up interest rates on agreed overdrafts. Since January almost all have increased them by between 1% and 4%, with most now being over 19% p.a.

5th October 08  Got a dormant account ? The government is pressing ahead with legislation to use the £400 million lying in dormant accounts (untouched for 15 years) for 'good causes'.  Savers, who discover they have such dormant accounts will no lose out, however.  Want to check ?  Try www.mylostaccount.org.uk.  They get 800 claims a day !

2nd September 08.  By now everyone will have heard of the Chancellors late, but welcome, news that the Stamp duty payable on house sales will be nil if the house sells for less than £175,000 (up from £125,000). A more sensible idea would be for only the amount OVER £175,000 should be charged a Stamp Duty percentage. For now one can imagine quite a few houses being priced at £174,999 !

Did you know that under section 187 of the Social Security Administration Act 1992: it an offence for banks to take bank charges out of the accounts of people who are on social security benefits. So, if your bank has taken charges out of your Benefits eg: if you are in receipt (and totally dependent on) of any of the following benefits:   Income Support; Tax Credits; Child Benefit; Job seekers allowance;  Incapacity benefit;  Disability living allowance;  Attendance Allowance ; CSA payments;  Other DWP payments....   then you should get onto them and point this out

NEW TAXES.  Are you better or worse off ?

In last year's budget, the Government announced the new income tax thresholds. This doesn't just impact what you earn, but also the rate of tax on savings and pensions too. The main changes were:
* The 10% starting rate has gone. The 10% income tax ‘starting rate’ will be removed for pensions and salaries, but will stay for savings.
* Basic rate of income tax drops to 20% from 22%. (the cost of this change is clawed back by the ending of the 10% band).
* Because of the 10% tax 'revolt' the tax free Personal Allowance has now been increased to £6035
* The ‘higher rate’ of income tax stays at 40%.
The idea behind these changes was a simplification of the tax system and now (barring savings) there are only two bands. While this was meant to be a tax boost, those who were only paying the 10% level have lost out, meaning its some of the poorest people who will pay more tax.
There will be a new 10% starting rate for savings income only, with a limit of £2320. If an individual’s taxable non-savings income is above this limit then the 10% savings rate will not be applicable.
.... so if your non-savings income exceeds your personal allowances you will pay tax, initially, at the new rate of 20%. But if your non-savings income exceeds your personal allowances .... but by less than £2320 - then the balance can be off-set against any savings income at 10%.
Not easy to comprehend and creates a further level of complexity both for HMRC and their customers. (because you'll have to claim .. as tax will have been deducted from your interest at 20%) Quite frankly it was hardly worth leaving in the calculation at all. If you did calculate (with difficulty) that you were in this narrow band the maximum you would get back is £232

A copy of the government page is as follows:

The Tax Bands 08


Married Couple's Allowance  Click on http://www.hmrc.gov.uk/incometax/married-allow.htm You should be getting this tax allowance where at least one of a marriage or civil partnership was born before April 6th 1935.  For marriages before December 5th 2005 the allowance goes to the husband. (For marriages on or after that date the allowance goes to person with the higher income. The maximum allowance (2009 - 2010 is £6,965 but this is reduced if the person claiming it is has an income in excess of £22,900. BUT the actual tax saving is only 10% of the allowance i.e. £696.50 (less for high earners). If you do not pay tax and your spouse does then you can transfer any unused allowance. If you think you are not getting this allowance you can write or phone your tax office. Claims can go back as far as the 2004/5 tax year

Did you know that under section 187 of the Social Security Administration Act 1992: it an offence for banks to take bank charges out of the accounts of people who are on social security benefits. So, if your bank has taken charges out of your Benefits eg: if you are in receipt (and totally dependent on) of any of the following benefits.

.The Financial Services Authority has a useful site at http://www.moneymadeclear.fsa.gov.uk/dealing with many different financial matters. This service, which can be accessed on 0300 500 5000 will give free advice on money matters and may also be access via the Citizens Advice Bureaux.

I really do recommend that people sign up to get regular emails from the Money Savings Expert at http://www.moneysavingexpert.com/site/money-tips-email-faqs

From 6th April 2008 all PEPs became ISAs; the annual ISA investment allowance increased; there are no longer be Mini and Maxi ISAs (just Cash ISAs and Stocks and Shares ISAs). You can transfer Cash ISAs to Stocks ISAs (but not the other way)  See http://www.thisismoney.co.uk/isacentre

BEWARE : A little known fact about credit cards.  If the company gets concerned that you are getting seriously behind in your payments they can apply to the courts to get a charging order put on your home, turning the debt into a loan secured against your house.  A number of Building societies are becoming concerned that repossessions are being triggered by other lenders who are after their money. In fact Newcastle BS found that 28% of repossessions were triggered by other lenders (even , in some cases, when their customers were up to date with their mortgage payments.)

Inheritance Tax (IHT) In 2008 this was raised to £312,000  per person ( £624,000 for a couple).  This now makes my section on Inheritance Tax (below) somewhat out of date, especially with regard to the Nil Rate Discretionary Trust, which was always a hassle to get almost the same result. It is tough on singles (and those fond elderly sisters who have lived in the same house (jointly owned) for many years and cannot legally be married). But it can be claimed retrospectively by widows and widowers.  

This month banks will begin to share credit information about customers, so tightening up on loans to people who have accumulated debts with various agencies.  

For latest details on total debt levels see http://www.creditaction.org.uk/startpage.html  and http://www.creditaction.org.uk/debt-statistics.html

There is a useful site at http://www.taxvol.org.uk/retired.htm/ (free tax advice to older people by volunteers)Tel. 0845 601 3321 email taxvol@taxvol.org.uk. They may even make home visits for disabled people

The (official) Financial Services Authority has a new site at http://www.moneymadeclear.fsa.gov.uk/

The current tax allowances can be seen at http://www.hmrc.gov.uk/rates/it.htm  (IHT, Income etc)

For older people a good site is http://www.helptheaged.org.uk/Money/_default.htm  or phone their SeniorLine on 0808 800 6565 for free advice on financial matters.

A good general site which will give you links to most financial sites is www.77finance.co.uk

There is about £466 million lying idle in National Savings accounts.  One person found that an early savings account set up by her parents had accumulated nearly £500.   If you think you might have similar savings lying around you can ask NSI to try and trace it. Click Here.  There is also around £30 million of unclaimed Premium Bond prizes.

PENSION CREDITS

The government reports that there is £2.5 billion in pension aid which pensioners are not taking up. In fact there were 33,000 FEWER claims for pension credits this year. The pension credit scheme aims to ensure that no pensioner over 60 receives less than £130 a week (£6,760 per annum) and that no couple receives less than £198.45 per week (£10,319.40 per annum) Over 65s with modest additional pensions can claim even more, even if a couple is already receiving over £13,800 per annum. Certain household payments, such as mortgage interest, may increase the amount you can get. Are you SURE you are getting your share ?  Because apparently one third of those eligible are not claiming. For more information call the free phone line at Age Concern (now called AgeUK) on 0800 169 29 39 or the government Pension Credit helpline on 0800 99 1234 The Textphone number for deaf people is 0800 169 0133

The rules on Pension Credits are a little complex.  e.g. the description of what constitutes a partner.  The partner does not necessarily have to be over 60.  In addition benefits may be payable to people who have additional pensions such as annuities. One can get an estimate of how much you could claim (and get an application form) from http://www.thepensionservice.gov.uk/pensioncredit/age65.asp  But don't delay. Back pay can be claimed but only up to a year before a claim.

COUNCIL TAX BENEFIT In addition, between 2.27m and 2.95m people who are entitled to don't claim the Council Tax benefit, are missing out on combined savings worth between £1.3 billion and £1.8 billion a year. You may qualify for council tax benefit if you pay council tax and your household income and savings and investments are £16,000 or below. The amount your bills will be reduced by depends on circumstances such as your age, the ages and size of your family. If you have income or savings of over £16,000 you can't normally get council tax benefit, unless you're aged 60 or over and getting the 'guarantee credit' element of the pension credit.

The total of unclaimed benefits (excluding care allowances etc) is therefore around £4 billion !

That Overdraft and Credit Card Charge Business
Swingeing charges on Credit Cards and unauthorised Overdrafts have been a safe bet for banks, with one making 40% of its card company profit from these. Not content with this card companies are increasing interest rates, scrapping interest free deals and reducing the number of days before you have to clear the debt.  If you think that you have been charged unfairly TAKE ACTION.  See HERE how to go about it.

Personally, I can't see banks being willing to write off charges more than once.  People who have overdrawn once are likely to overdraw again.  I think that the next time they plead with their bank that charges are unfair they are likely to get 'a flea in the ear', just the same as people who fall for phishing more than once. One recent judgment turned down an application because it was made on behalf of a client by a 'no fix, no fee' company, on the grounds that the company had acted unlawfully as it was not a qualified solicitor. "Which?" recommends, therefore, that people should make their own applications.

So, Watch Out for charges from Banks and Credit  (and Store) cards. Some charge over £30 for a missed payment or going over the credit limit, £10 for a replacement card and £15 extra for the letter telling you they have charged you !  Some of these cheaper options may turn out to be very expensive indeed. Introductory rates of 0% (Halifax, B of S, M & S, Lloyds) are very tempting but they have to get their money back somehow.  The lowest standard rate is now up to around 9%  but only if you are considered to be 'low risk' and many charge as much as 11%. The OFT has now banned 28 credit card companies from claiming their low introductory rates were their APRs. Bank charges can be equally high.  The rates charged for each bounced cheque can be huge. HSBC £25; Barclays £30, Lloyds £35, Natwest £38, Halifax £39. Unauthorised overdrafts are charged as a percentage of the amount and it can be as high as 30%.   So, now you know how the banks can write off huge bad debts that they unwisely loaned and still make even bigger profits. The Financial Ombudsman  http://www.financial-ombudsman.org.uk/ is receiving complaints at the rate of 5000 per week.

The Loan Insurance Business (PPIs)

One site which is dealing exclusively with this problem and helping people reclaim charges that have been wrongly made is www.ppireclaimservice.co.uk There is a lot of information there.  If you want them to take it up on your behalf there will obviously be a charge. Take a look.
In this age of low cost loans and competition one must check carefully how the company is managing to offer cash at such a low rate.  A closer look reveals that some lenders - even well know names - try to make up the difference with additional insurance in case you get sick or lose your job. On a £5000 loan over three years one (Internet) Bank charges nearly £1000 for insurance, more than doubling the cost of the loan, whilst another (Building Society) not only charges half that fee but also offers the loan at 10% less than the bank! This made the cost of borrowing almost precisely half what it would cost from a big bank. What the Mail on Sunday described as a scam is the fact that many of those they telephoned added the (voluntary) insurance automatically and did not even mention that they were doing it or even what it was for. Always bear in mind that the profit margin on loan insurance is estimated to be around 70%.  So they will sell it to you if they can. Most self employed people would not be able to claim if they had no work and pensioners probably couldn't claim anyway.  But did you know that you can obtain this sort of protection from separate companies such as Paymentcare.co.uk and britishinsurance.com for much less than most banks charge. Shop around if you feel you need this.
n.b. Jan 07. The FSA is going undercover to find out which organisation are selling PPIs to people who cannot possibly benefit. Let us hope they rapidly expose the Banks and Mortgage lenders who are continuing to perpetrate this scam and NAME and SHAME them.  It is thought that the number and total of claims against lenders (for miss-selling) will outstrip the number claiming against banks for 'higher than reasonable' charges for unauthorised overdrafts. Of course there is always someone who see they can make easy money out of this so the companies wanting to 'help' you with such claims are queuing up for your business.  Better to do it yourself.

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The Daily Telegraph has published a series of free personal finance guides. For your copy telephone...0870 167 0980 (Retirement planning); 0870 169 0999 (Inheritance Tax); 0870 382 4409

Compare the entire Equity Realease market at Key Retirement Solutions, the UK Equity Release specialists. They do a booklet about remortgaging to release money called Home Truths. Phone 0800 531 6027. But they ARE in the business and you may be also offered a 'no obligation consultation'. A basic consultation is free but if you require an in depth one they will charge and they will charge a percentage of any loan raised.

Buying property abroad);  0845 450 9190 (Private Medical Insurance); 0870 830 3421 (Investments); 0800 068 6065 (Releasing the Wealth in your Home).

More useful websites: www.express.co.uk/money/  www.arrow1066.co.uk, www.betterfinance.co.uk  www.moneysupermarket.com  www.moneyexpert.com  www.mortgages.charcol.co.uk (a broker)  www.learnmoney.co.uk  www.thisismoney.co.uk  (Daily Mail) which has links to the whole world of finance or  www.virginmoney.com  or  www.bestinvest.co.uk  to compare various products www.moneyweb.co.uk  http://money.guardian.co.uk http://News.ft.com/yourmoney (Financial Times). www.moneysavingexpert.com & www.yourmoney.com  

http://www.surf4finance.com/. This site provides links to useful sites dealing with Debt Management, Mortgages, Insurance, Bank charges etc.

For other savings rates check Teletext Page 255 on BBC 2

Investing for Grandchildren
Each child has their own annual personal allowance free of tax and a capital gain allowance. Grandparents have the advantage of being able to make gifts to grandchildren, whereas parents who purchase investments or savings on their behalf are taxed on a child's income in excess of £100.  Whenever possible you should save in the child's name to avoid paying tax. Parents should complete Inland Revenue form R85 as that tells the taxman that the saver is a non-taxpayer and interest will be paid tax-free. Young children cannot have ISAs in their name as they are only open to the over-16s.

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U.K. Tax exemptions. http://www.hmrc.gov.uk/rates/it.htm

Check for Benefits, Pensions and Jobs at Department of Works and Pensions page.  

INHERITANCE TAX

 (9th Oct 2007 - This section has been amended due to the sudden increase of tax free allowance to legal couples. The situation is complex and you should consult a financial advisor)

As from October 2007 a substantial change was made in the rules governing Inheritance Tax.  Hitherto the value of the estate left by the last survivor of a legal partnership was taxed at the punitive IHT rate of 40% if it was more than £300,000. The 2008 allowance is £312,000 or £624,000 for a couple, as legal partners 'inherit' the partner's tax exemption. This is retrospective, so it applies to partners who died a while ago.  But the exemption would only amount to the level that was relevant at the time of their death and would be less any amount that they willed to (say) their children.  The site below gives examples and can be consulted as to the level of exception in any particular year.

Reducing your heirs' liability to Inheritance Tax (IHT) See http://www.hmrc.gov.uk/leaflets/iht.htm for leaflets on IHT.  

There is a very useful site on this question at http://www.squareonefinancial.co.uk Work out your liability and the best way to deal with it.  Another usefuk article is at http://www.caredirections.co.uk/

You can give away as much as you like during your life but the money would still be taxable if you do not survive seven years after the gift. If you survive over three years the percentage taken by the tax man is reduced.  For example, if you gave £100,000 (and died) your heirs would have to pay £40,000 to the tax man. Between 2-4 years this would be reduced to £32,000. 4 -5 years £24,000. 5 - 6 year £16,000. 6 - 7 years £16,000

You can give away a total of £3000 per annum without any tax worries (or £5000 as a wedding gift to one of your children (before they marry), £2,500 as a wedding gift to a grandchild or great grandchild and £1,000 to anyone else). And you can give any number of £250 gifts to individuals. In addition you can make  regular gifts from normal income and this, too, is exempt from IHT but you must give it regularly and 'not materially reduce your standard of living' (pretty vague that). So you could put, say, £25 a month in savings for each grandchild, if you can afford it.

Copied from a government site : Q: "Can I carry forward any unused annual exemptions (for cash gifts)?"
A: Yes. If the total value of gifts in any one tax year is less than £3,000 any surplus can be carried forward to the next tax year but no further. You can even carry forward last year's £3000 allowance.  
So, If you gave someone £6000 in one year and nothing the following year it still would not be taxed on your death. But if you gave away £12,000 one year and nothing the following year £6000 of this would still be taxable if you did not survive 7 years from the date of the gift.

One of the worst aspects of the IHT problem is that, if you are over the limit and you die (without a legal partner) the tax has to be paid before "probate". So nothing can be released to your heirs until the tax bill is settled.  If you have not left enough cash to settle the bill then assets such as property may have to be sold in order to raise the necessary funds. And, even with a straightforward will, probate can hang on for a year (as I know to my cost).

For the (many) people who have fled to warmer climes things get complicated. You are still considered to be 'domiciled' in the UK if your FATHER was born here (!) You may be considered to have left only if you are away for over three years, sell all your UK assets and give up your passport. Then you may be liable to taxation in the country to which you fled.

A novel way to reduce your liability is to have a new type of mortgage. In Switzerland and Japan the lifelong interest only mortgage is popular and you may be able to obtain one over here. Basically you just keep paying the interest on the loan but the mortgage then passes on to your heirs, who could then sell the house and settle the debt.  With the way house prices go the chances are they will still inherit some cash but their IHT liability would be considerably reduced (as would their inheritance) - but, at least, the Government would not get their hands on 40% of it.

You cannot be taxed on any money that was never yours, so you can consider making out life insurance plans in trust to others. Even a legacy can be diverted to another person within two years of your receiving it.  
One does not have to pay tax on the death of a spouse but people who just live together (without being registered under a civil partnership) do not have this benefit and could be caught having to pay IHT just to stay in their joint house.  From December 2005, however, it was possible for couples (of any sex) to register under civil partnership laws. Unfortunately a test case turned down any help for sisters who have lived together all their lives (seems unfair!).

Nil Rate Discretionary Trusts. In view of the fact that in most cases the new rules allow a couple to have a much larger IHT Allowance I have cut the section which referred to Nil Rate Discretionary Trusts. For people who jointly own a house but cannot take advantage of the new, more generous,  rule because they do not wish (or are unable) to marry it is probably worth them investigating this further
 
Lastly, you may wish to consider taking out an insurance which will help your heirs pay the IHT bill when it arrives. Such insurances are tax efficient in their own right.

I state (again) that I am not giving financial advice.  For that you should find a professional financial adviser.

Pensions :  Do you think that your National Insurance contribution record might be incorrect ? Look at this site for an explanation as to what might have happened http://nirs2.atspace.com/index.htm  In fact, because people may now have paid into multiple pension schemes it is easy to lose track of them. The Pensions Service 0845 6002 537 www.thepensionsservice.gov.uk offers a free pension tracing service. They have a database of over 200,000 pension schemes.

The many benefits available are very complicated to describe.  The best document for this is at http://www.thepensionservice.gov.uk/pdf/pensionersguide/pg1june06.pdf.  You will need to download a PDF file reader (such as Foxit) to read this. The document deals with most benefits such as Pension Credits, Council Tax Benefit, Carers allowances and even Child Benefit and Tax Credits
According to the Saga Magazine 2.5 million over 60's are missing out by not claiming their Pension Credit. See  www.thepensionservice.gov.uk  However, the calculation is complex and savings are taken into account, as well as expenses such as mortgages.  The best thing to do is look at the charts on the Pensions Service website. Click here. You can apply for Pension Credit by calling the Pension Credit application line 0800 99 1234, textphone 0800 169 0133 (8am to 8pm Monday to Friday, 9am to 1pm Saturday) or can print a form by going to the site on line.  For deaf people with a text phone the number is 0800 169 0133

Anyone deferring drawing their state pension can get increases equivalent to 10.4% for every year that they wait, OR you can get a lump sum instead.  At current estimates this could be as much as £30,000 for five years' delay.  But be careful. Two out of every five people don't make it to 70 ! And, in some poor areas of the country this is as much as three out of every five. For longevity live in Cornwall !  

Many disabled and elderly people are not claiming State Benefits which are theirs of right. Virtually all those in care homes will qualify for Attendance Allowance. Those needing help overnight, too, get a higher rate (and this is NOT means tested). In England, people with recognised medical need also qualify for a weekly payment from the NHS towards care costs.  It is in three bands (see the link below). The level of payment is very different in Wales, Northern Ireland and Scotland.  So much for a United Kingdom !  See the NHS leaflet HERE for more details

Be aware that people who did not manage to pay sufficient National Insurance contributions to get a full state pension may be able to top up their contributions for the period 1996 to 2002. Unfortunately this does not apply to women who elected to pay the married women's reduced rate for the whole of any tax year in question.  But for someone who can increase their contributions to over the 25% necessary for a state pension, they are likely to benefit quite substantially. The rule mainly applies to women born after 5th April 1938 who reached state pension age after 5th April 1998. Amounts payable would be backdated.  See HERE for official details

From 2012 everyone in employment will have the equivalent of 7% of their salary saved into a pension scheme, 4% of which will come from the employee. A problem for the government is whether this will be a disincentive to work and save.  As is the case now, people who saved hard for their retirement are penalised when it comes to means-tested benefits (from additional pensions to household expenses such as central heating installation and in many other ways). It has been the same since the introduction of the 'Welfare State' : if you waste your money during your life someone else will hopefully keep you in old age. I realise, however, that there are many people who have NEVER been in a position to save, even living frugally. This problem will never be resolved. One cannot, in a modern society, let people starve because they were not wise savers during their lives, as Malthus suggested. Our local workhouse still exists, but has been turned into modern flats !

See more on pensions, including SIPPS lower down

Education Maintenance Allowances (EMA) are available to students of 16 and 17 who are studying more than 12 hours per week and whose parents earn less than £30,000 per annum.  The allowance is not  affected by the student's own earnings.

Child Trust Funds. From 2005, children born after 31st August 2002 receive da voucher for either £250 or £500 (depending on family income at the time). It is intended that this should be invested and is not available to them until they are 18.  This can be topped up by parents or grandparents. So, if you are feeling generous watch out for this.

In debt ?

May 2020 Credit Jungle, is a new website designed by former employees of the Leeds based credit reference agency Callcredit, . It offers users free credit scores and geo-demographic information about their neighbourhood only usually seen by lenders. It costs nothing to retrieve the score and the secured loan/debt management applications are entirely optional. A useful tool especially if you are unsure of your credit rating and how it works.
(It is important to realise that multiple applications for credit may leave a 'footprint' of those applications which may be taken into account when a company is considering your creditworthiness but with Credit Jungle you can view your score as often as they like without a footprint being left.)

http://www.thinkmoney.com/debt/   See HERE for a complimentary report on this company by Times On Line.  Thinkmoney also has a useful link at http://www.thinkmoney.com/tag/pension/
http://www.surf4finance.com/.  This site provides links to useful sites dealing with Debt Management, Mortgages, Insurance, Bank charges etc.

Piggy's bankruptcy information website was launched after Mark Davis trained to help others,  following his own bankruptcy in 2006.  It is a 'not for profit' site

www.nationaldebtline.co.uk provides a national telephone helpline for people with debt problems in England, Wales and Scotland offering free, confidential and independent advice (Telephone 0808 808 4000). They have a downloadable information pack, debt management plans and sample letters to creditors. Or you can e-mail them.  But I also recommend that you have a good look at the site run by Martin Lewis at http://www.moneysavingexpert.com/loans/debt-help-plan

I never suggest ideas for dealing with debt .  There are experts in this field who MAY suggest things like moving credit card debt to a new card which has a nil interest demand for as much as 15 months. There is likely to be a percentage one-off charge (around 3%). Obviously, they are after your business and, after the free period, the rate will return to the usual stinging percentage normally charged by credit card companies.  But it might give you time to get things straightened out.

Going for broke ? Individual bankruptcy is becoming popular as people get out of their depth in debt. It is not as shameful as it used to be and it seems more and more individuals are opting for that as a way out of their (sometimes self-inflicted) financial problems. It is not recommended for everyone, as it can have lasting consequences, such as the inability to get a credit card or mortgage and the debt collectors can be after you for years. And folk might also think about the people who will lose out. I know it cost me many hundreds of pounds when I was in business when companies could no longer settle their bills.
However, if you ARE contemplating bankruptcy it would be a good idea to look at the following site:  Piggy's bankruptcy information website was launched after Mark Davis trained to help others,  following his own bankruptcy in 2006.  It is a 'not for profit' site
However, a less painful way has recently gained in popularity.  A Debt Advisor may recommend that insolvent people with huge unsecured debts (such as Credit and Store Cards) arrange an IVA. This is an Individual Voluntary Agreement.  For a fee, the Debt Advisor may strike up a deal with your creditors to pay off an agreed (and lesser) amount.  And this way you don't actually go bankrupt, even though you are insolvent.  Banks and other creditors might agree this so they get something.  If you go bankrupt they will probably get nothing at all.  So you CAN have your cake and eat it! You can rack up £60,000 on credit cards (despite being on a small pension) and then say "Sorry"! Another reason for the rise in IVAs is that a Debt Advisor gets no commission from advising bankruptcy and can get as much £6,000 from arranging an IVA!  So everyone is happy, the debtor, the Debt Advisor and the Banks (who have set aside millions for this purpose, but are still raking in vast and increasing profits). Before jumping in to this please read an article at 50Connect HERE  or go and see your Citizens Advice Bureau

There are some organisations which may help tackle a debt problem. One is the free Consumer Credit Counselling Service  www.cccs.co.uk/ and the other is the Credit Action charity www.creditaction.org.uk. But one should first visit your local Citizens Advice Bureau. Unfortunately there is no easy way to tackle debt.  Consolidating your debts is one method but the chances are that the repayment term will be longer, so you finish up paying more.  Remortgaging may also seem to be a good way of reducing payments. But what you are doing is converting expensive short term unsecured debt against long term debt which is secured against the roof over your head. So be careful.

Loans
Ever wondered what your credit rating is ? Experian (www.creditexpert.co.uk) and www.equifax.co.uk are the people who know everything about you r financial activities.  I recently did a check on my own credit rating, using a free introductory offer from Experian, above. It wasn't too difficult but you have to wait for them to post you a Pin number.  The on screen report could be printed out and it told me whether I had been late in paying up on my credit card and whether I had an overdraft on my current account.  It also told me which companies had enquired into my credit rating (such as an insurance company).  It would have told me what my credit rating was if I had forked out £4.99.  Equifax recommend a regular checkup in case someone has nobbled your persona (is using your name to get credit at your expense) - and this seems to be happening more frequently lately. Even if you don't have to settle someone else's debt you might find it difficult to get your credit rating back up to scratch.  One couple couldn't get a mortgage because they had been erroneously listed as owing one penny on a bill!  I am not sure how one goes about correcting incorrect information. My report said I had an MBNA credit card and I was not aware I had one, even though these things drop through the letterbox like confetti.

The endowment policy mis-selling scandal. Recently some very large organisations have had their knuckles rapped because of the 'shambolic' way in which they have been dealing with people who believe they were mis-sold endowment policies.

If you think you were mis-sold an endowment policy e.g. one that was supposed to cover your mortgage, you can ask an Endowment Investigation Company to take up your case for you.  But they will charge a percentage of what you are awarded. This can vary between 10% and 50%!  Or you can follow the procedure suggested in Financial Mail.

The Financial Ombudsman  If you feel that you have exhausted all possibilities when dealing with a financial organisation you can consider complaining to the Financial Ombudsman at www.financial-ombudsman.org.uk

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Pension books are being phased out and people receiving state benefits will have money paid either into a bank or building society account or, if they cannot be persuaded to open one, will receive a Post Office Card account. Money will be paid out by the counter clerk 'swiping' the card.

News : Lost cash ?  There is a free tracing service for cash lost in various bank accounts. Maybe granny left a fortune.  A single form is circulated to 45 banks. Download the form from  the British Banking Association - www.bba.org.uk

Remortgaging  Impartial booklet from http://www.moneysavingexpert.com/mortgages/remortgage-guide
The cheapest way to borrow money - for house owners - is still to re-mortgage. Vast sums are being borrowed in this way (mortgages represent the vast majority of the trillions that we owe in the UK). A number of Building Societies will lend money to Owner Occupiers at reasonable rates, keeping the same rate for a year or so. But see the Sunday Telegraph or Mail for the fees charged and whether there is a tie-in period ('redemption penalty') after this initial low rate. Those which don't tie in may still charge a low rate. But compare this with other forms of longer term borrowing and you can see the advantage of remortgaging.  With deals like Intelligent Finance  (Halifax) , Natwest or www.oneaccount.com (RBS) you can reduce mortgage payments even further by linking your current account to the mortgage, so you only pay interest on the balance. It is a question of whether you are prepared to put the house up as collateral or are keen to keep the house value intact.  There may be an arrangement fee, which would make it uneconomic if you are borrowing a smaller amount.  It is difficult to imagine why ANY house owner would borrow large sums on credit card and store cards at their high rates.

Equity Release   (5/08) You can get a free booklet on this subject. The Mature Times guide, produced in association with In Retirement Services, is the first step to finding out. Call freephone 0800 082 65 70 quoting MATN080507.
Equity Release is where you release part of the value of your house but still remain in it. The money is then used for living or invested to produce income. No repayments have to be made until the person dies, when all the cash and rolled up interest is taken from the value of the house.  This would not be done whilst the spouse still lives in the house. The cumulative interest can mount up considerably over a period of years but the total sum will not exceed the full value of the house (so beneficiaries of the will will not be left with a debt)  It may be particularly suitable for people without dependents and who do not have children to which they wish to will the property or for single people who wish to reduce their IHT liability (see above). People on means tested benefits should be aware that these would almost certainly be affected.  Financial Mail also has a free guide called Home Truth  (Tel 0800 068 6065) .  The government's Financial Services Authority (FSA) also have one called Raising Money from Your Home  (0845 606 1234 or www.fsa.gov.uk) And IFA (Independent Financial Advisers) can put you in touch with members on 0800 085 3250 or www.unbiased.co.uk   Norwich Union has launched an informative film (available in VHS or DVD format) available to consumers and intermediaries alike. To request a copy consumers can call 0800 404 7137.  For am Equity Release Comparison site see Keyrs (Key Retirement Solutions)

Capital Gains Tax.  This is a complex subject and the government has upset a lot of business people by trying to make it simpler.  From April 08 the tax on a capital gain is at a standard 18%.  Currently small businesses have a more generous regime.  However, from the point of view of private individuals who have bought second homes to let or in the hope of making a killing as house prices rose, this is likely to be a benefit, especially if they pay income tax at the higher level of 40%.  It is not quite such a benefit to those on the standard tax rate. A Capital Gain has always been considered as part of your income.  So, currently, someone who is on the lower tax scale would still have only paid tax at that level providing the capital gain (over and above their basic annual CGT allowance - currently £9,600 in 2008) did not bring them into the higher tax band in the year in which they sold.  If their total 'income' in that year brought them into the higher tax band they would have had to pay tax at 40% on the excess. Once again, this is all very complex and time to seek professional advice as the amounts of tax can be substantial.  

From April 2008 any 'indexation' allowance is lost and the capital gain will be the complete gain since purchase (less your annual CGT allowance of £9,600)  See the government site HERE  

Helping offspring with house deposits : See www.ParentAidNow.com

Investing Get a free guide to the stockmarket from The Share Centre 0870 400 0266 www.share.com/freeguides   or See Here
If you have investments in stock and want to keep an up-to-date record of your folio go to www.iii.co.uk. You have to register your name but then can enter the details of investments, which will be kept up to date for you.

A good site to help with stock market decisions is http://www.share.com/  You can join for a small quarterly fee, look for suggestions or find prices (either by searching the stock market code or by typing in the name of the company).  Very clear site. 

EFTs (Exchange Traded Funds) If you buy Unit Trusts you will pay an administration fee every year. This is taken out of the value of the units (whether they rise or fall) The percentage taken is likely to be in the range of 1.75. Unit trust funds are normally administered by a Fund Manager. They vary in their ability to foretell what will happen to the shares or bonds which they buy. Quite frequently they get it wrong, so the value of the units goes down, even more than the general stock market. EFTs usually concentrate on a specific market e.g. Japan, Europe, UK, USA, and merely follow whatever that market does. Without a Fund Manager, their charges are lower - more like 0.4%. Recently these have become more popular with small investors.  They can be sheltered in an ISA. For more detail see http://uk.ishares.com/en/rc/about/what-are-etfs.

The Daily Mail share tipper is Midas, which has a Midweek extra at www.thisismoney.co.uk/midas-extra

Independent Financial Advice?  It may be independent but it isn't free.  Advisers have to earn a living and they will want you to buy something that pays them a commission. Purchasing Unit Trusts, for instance, involves initial charges and it is from these that the adviser gets his cut. Try  www.unbiased.co.uk  Also, the Stock Exchange supports a website at  www.equityeducation.com but it does require you to register.  Other sites well worth a look are www.fool.com  and www.moneyextra.com. Free investment guides are also obtainable from www.share.com  

Unit Trusts :  Used to be a slightly safer way for the small investor is the Unit Trust.   These are funds which are managed by companies which invest in the stock market but spread the investments over a number of companies.  They may specialise in a particular area, of industry or the world, and some may be consistently more successful than others.

Is it worth using the 'net' for buying and selling shares ?  Looking at the charges of on line trading companies it certainly seems to be the case. Take a look at www.halifaxsharedealing.co.uk as an example.

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Wills (please check these amounts) : If you do not leave a will your estate will be divided along a set pattern which distributes cash to your relatives. At present, in England, a spouse would only get the first £125,000 of your estate (£200,000 if there are no children from either party) In Scotland the law has increased the amount which automatically goes to a spouse to £300,000.  It is expected that this will soon be increased  in England to £350,000 or £650,000 if there are no children. You can imagine a situation, at present, where, if a house is in the name of the husband, and he dies without a will, children of either party would have a claim and the widow might have to sell up in order to pay them. So the change is overdue. Incidentally, if you don't leave a will and there are no known relatives the Queen gets the lot - and she doesn't need it. But it does show that making a will can be important. If you want to make a will on line see http://www.tenminutewill.co.uk/main.cgi  The charge is around £30.  ~
If you would like a free will writing information pack you can get one from www.bluecross.org.uk.  Obviously they hope you will put in a little something on behalf of your darling moggie or pooch.. and why not ?

Will Writing from £48: http://www.halifaxlegalexpress.co.uk/halifax/ The page also offers legal advice at fixed costs
Will Writing for a fixed £69 http://www.glosslegal.co.uk. Each Will is checked by a qualified solicitor, and is then professionally printed, bound and sent to you by post to make sure it does not get invalided by the probate office -- as happens with online downloads improperly printed and stapled at home.

November each year is WILL MONTH !  It has become usual for solicitors to off free will writing services in November, with the expectation that you will donate something to a charity instead of a fee to the solicitor.

For more details on taxes, including IHT (Inheritance tax) see http://www.hmrc.gov.uk/rates/it.htm

Annuities   From October 2012 employers and employees will have new pensions options.  The government is introducing Personal Accounts to try to boost the savings of the 40% of workers who are not paying into any kind of pensions scheme (apart from the State one). Staff will be automatically enrolled into the new scheme, to which employers MUST contribute, although it will still be possible for employees to opt out. The intention is that all those with Personal Accounts will save 8% or earnings between £5,000 and £33,500. of which 3% will be paid by the employer and 5% by the employee.  But the value of the schemes will still be dependent on th vagaries of the stock market.  As at present employees will still be able to access the money at age 55 and take 25% tax free lump sum at that time, using the rest to provide an income. The scheme will be introduced to the largest companies first, the rest joining over the following two years.   

But annuities are a really complicated subject.  The government booklet on  and other subjects it is displayed at the Financial Service Authority site providing you have Acrobat (or Foxit) Reader. As things have changed since April 06 I recommend that you read it thoroughly
The law says that, at present, you must convert your company pension fund into an Annuity by the age of 75. Much greater flexibility is being allowed with company and contracted-out personal pensions.  After that date you were be able to take as much as 25% in tax-free cash (which might be used to pay off a mortgage, for instance) or the whole amount if your fund is less than £15,000, although only 25% of this is tax free ! If you convert a lump sum to an annuity, however, that income could be taxable. In addition to this change it is be possible to make a much larger contribution into a scheme just prior to retirement, if that benefits the retiree.  What is more, this lump sum will be added to by the government because of the tax relief allowed on pension contributions and the contributor can then draw out 25% tax free a week later ! What is even more confusing is that you can reinvest the 25% tax free lump sum in what is called a Lifetime Annuity and this has some advantages over an annuity bought with the whole of your pension fund.  I am beginning to sink in this quagmire. Help !

An annuity provides a regular lifetime income paid to you monthly, quarterly or annually from a lump sum, which is then lost on death..There are two main types.

(A) The CPA or Compulsory Purchase Annuity, which is bought from your company pension fund.
(B) The PLA or Purchase Life Annuity, where you pay cash in order to receive regular payments in return.

The money is invested in fixed rate stocks (government funds) by the annuity company.

The main distinction between these two is one of taxation. In the case of the CPA the whole of the amounts received will be taxed as normal income - providing you are in the taxable range - whilst the PLA is made up of returns of your capital plus interest on the investment. In this case only the interest is taxable because the capital is being returned to you.

Beyond this distinction there are options which allow a guarantee period for surviving relatives. Also there are annuities which increase payments over time to keep up with inflation. Generally, the latter will pay much less at the beginning but will overtake the set payments after about ten years.

Also there are annuities which are joint and will pay a spouse a proportion of the income after the death of the other annuitant.

The amounts received in respect of a fund of say, £10,000, vary enormously depending on which of the above schemes are arranged and upon the age at which it is arranged and also whether it is for a man or woman. This is one case when it pays to be older (or sicker!) when you start . It even pays, with some companies, to be in poor health or a smoker because the shorter your life expectancy the more you will receive each year - e.g.  www.britannicretirment.com. It also pays to shop around as benefits do vary from one company to another. Incidentally, you are not bound to convert your company fund to an annuity offered by the insurance company it is with. But once you have committed yourself to one pension provider you are stuck with it for life. Despite this only about one third of annuity buyers actually shop around for a better deal and often lose out for the rst pof their lives.

Because the rates vary so much I will not attempt to include them here but refer you to BBC 2 Cefax Pages 262 onwards, where the rates by various companies are usually displayed. No doubt there are also Internet sites giving this information. But as an example, in 2008, a Male aged 70 putting £10,000 into a Single Life Level Annuity with the Norwich Union would have received £724 per annum but a couple, where the last survivor would continue to get the pension, might receive £551or even  as little as £255 if it had a 5% per annum cumulative escalator (to take care of inflation).  Under a fiver a week for £10,000 doesn't seem a lot !  More up-to-date rates may be found at http://www.h-l.co.uk/pensions/Annuity-rate-best-buy-table

Smokers  This is the only time smokers really win. Because actuaries say their chances (of living to a ripe old age) are less, some companies will give them a better annuity (as much as 20% better) than a non smoker. Search for the 'Just Retirement' site.

Postcodes :  Although Legal and General will not advertise which areas qualify they say they will take where you live into account when calculation an annuity.  This is because the average life expectancy in certain areas is so much less than in others, so they may pay more if you retire to the Gorbals......

A guaranteed income for life ? The government is so keen on you making provision for your old age (so they can opt out at a later date !) that they will GIVE you money.  No kidding. This is the STAKEHOLDER pension scheme. Say you are 70.  If you use the following scheme you can pay £2,808 each year. The government adds £792 in tax relief, even if you are not a taxpayer. The scheme immediately pays out the 20% tax. The annual return you get at 70 would be £238, taxable (a bit less for a woman) and the first payment is made to you immediately.  So your actual outlay is only £2808 - £900 - £238.  That is £1670. The annual income (£238) is 14% !  Mind you, if you pop your clogs you don't get anything back, so to make a profit on this you had better be healthy. Again, this is a way to reduce inheritance tax whilst enjoying a higher income during your lifetime. Check with  www.opas.org.uk  www.thepensionservice.gov.uk  or  www.hargreaveslansdown.co.uk (which is a Financial Advisor/Stockbroker)

SIPPS  (Applies to under 75s) A Self Invested Personal Pension. This is another method devised by the government to encourage people to save towards a pension. The encouragement is that you receive tax relief on the sums invested. This means that for every £100 invested by a standard rate taxpayer it only actually costs you £78 (and higher tax payers only £60). People on a salary can invest up 100% of that every year, whilst people who do not receive a salary can still invest £2,808 per annum (which is bumped up to £3,600 with the tax relief) Although you can put your existing company pension into a SIPP you should take advice on whether this is wise. It is not just cash which can be put into a SIPP. In addition, investments in property, shares and other funds can be added in. You can take out the resulting pension any time between the ages of 50 and 75. When you decide to opt to take your SIPP pension you can take 25% of the fund immediately as cash lump sum. The rest could be used to buy an annuity (see below) or you can take 'income drawdown', which means you can take regular income from the pension pot, whilst leaving the rest to accumulate interest (or, hopefully, make stock market gains). You can bequeath anything remaining, whereas an annuity continues until you die and then is wound up. However, if you opt for 'drawdown', when it's gone, it's gone. One organisation offering a list of companies which offer SIPPS is the SIPP Provider Group at www.sipp-provider-group.org.uk

GARS ? Another guarantee to mull over.  During the 70's and 80's, when insurance companies were rich and optimistic (and people were not stubbornly living to 84 and 87) hundreds of  thousands of policies were sold on the basis of a GAR or Guarantee Annuity Rate with a minimum lifetime income promised. Although at least one insurance company tried to wriggle out of its contract (and was slapped down in the High Court) other companies are only giving policyholders a limited period in which to claim their GAR, resulting in a substantial loss of income for life if they fail to reply.

Life Insurance (generally for younger people). This is  another area where it pays to shop around. A broker, such as Cavendish Online may find you a better deal than going to one particular company. In fact it can save you thousands over a period of 20 years.

Endowments
If you are thinking of cashing in an endowment policy and it is worth over £2,000 you will find that you get a better deal by selling it as a 'going concern'.

AAP (link to http://www.aap.co.uk) is the largest endowment policy buyer & seller in the UK. Find out all you need to know about endowment surrender, selling endowments & cashing in policies with AAP.

Also have a look at  www.policyplus.com (0845 20 20 200).  But not all policies are easily sold.  You need to shop around and it may be worth considering 'freezing' the policy rather than just cashing it in, which almost inevitably results in a poor deal.


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