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General disclaimer

NOTICE : I understand that the Financial Services Authority does not like unqualified people giving financial advice.  I would like to state that none of the following should be considered as advice.  I just like to point people in the direction of useful information. To find an Independent Financial Adviser (IFA) try www.unbiased.co.uk.
Details on this page 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 or you get a 'Page Not Found', please email me at paterson.keith@gmail.com

RSS button This is my blog re Savings

Stop Press. (Dec 17) National Savings have just upped their savings rate on Guaranteed Growth and Income Bonds.  1 year = 1.5% 3 year 2.2% with Income Bonds paying slightly less. You can add anything from 500 to a million. As savings, this will be virtually tax free. Are you stuck with it for the whole period ? The penalty for cashing in Income Bonds before the end of the period is only 90 days interest of the amount cashed in (which is less than many Banks and Building Societies charge).
There is an option for people who have an existing maturing bond to get 2.25% for five years

Direct Saver is just 0.95% and the ISA is 1%.

I NEVER give advice on investments (or even savings), merely regurgitating what I see published for all to see. Hargreaves Lansdowne suggest some funds that would bring in over 3% if they continue to perform as they have done for the last 30 years : See HERE. These days that amount is impossible to find without some risk. And as they often stress, investments can go down as well as up. They can be sheltered from tax and capital gains in an ISA.

Despite the Bank of England raising it 10 year rate from 0.25 to 0.5% is is unlikely that we will see much encouragement to cash savers, who are currently losing out to inflation.
So far there has been no return to Santander's best deal (on up to 20,000 savings), which was reduced last year, although it still maintains discounts on household bill direct debits, along with a 5 a month charge.

Numerous banks are offering easy swaps and big cash 'tempters', including TSB, Barclays and M&S

The Tesco Bank is probably one of the best if you are a Tesco shopper. If you pay in 750 a month and have three Direct Debits your cash will earn 3% up to 6000. As an extra perk, you get Clubcard points on debit card spending. The number you can earn in Tesco will be quadrupled for two years until 1 April 2019, from 1 per 4 to 1 per 1. For example, if you spend 80/week in Tesco, you get 80 extra points per week (4,160/yr). That's worth 41.60 in normal Clubcard points, but you can boost that to 166, and this is on top of normal Clubcard points. If you have enough cash to spare a couple could have flour such accounts between them, so conceivably could get the 3% on as much as 12.000. But that is a lot of hurdles to jump over.  Work it out.

Paragon Bank pays as much as 2.45% for a five year fix.  But that is really fixed - unless you die !

It is highly likely, with current interest rates, that you will still benefit MUCH more by reducing monthly bills than trying to save in other ways. The first things that come to mind is energy costs.  it really IS possible to shop around. I have been getting 30 a month off just by changing suppler.  Try and get 360 a year on savings interest!  And, if you are a taxpayer, remember your bills are from taxed income. If you are on a low income you can get and adequate phone and broadband deal for 9.50 a month from BT. That would be another 30 a month saved for some people. Mobile phone deals vary a great deal in price, too. (I am about to try the 1pPhone SIM.  And comparing metered water against a standard charge is also worth doing. And then there are those iniquitous interest rates on credit if you can possibly avoid them.

National Savings have stopped selling Children's Bonds but have started a Children's ISA paying 2%,  You (or they) can start from 16 years of age but must keep it there until they are 18.

NS & I have a 3 year growth bond offering 2.2%. You can save from 100 to 3000 per person. This would amount to 202 at the end of the 3 years.  Any money withdrawn during that time would cost 90 days interest on the amount withdrawn. Say you took out 500, this would cost you 2.75. The interest is taxable but is unlikely to be taxed unless you have savings interest amounting to 1000.  As this is government backed NS & I is the safest place.

In fact, Money Savings Expert mentions an additional 'Starting Saving Rate' .bringing the tax free allowance up to 17,500 if there is an element of saving :
"
Okay, why's the limit 17,500 – sounds like a random figure? Well, it's made up of three separate allowances. The first is your personal allowance – this is the amount you can earn without paying any income tax – for most people this allowance is 11,500 (for 2017/18).
On top of that allowance there's the 5,000 starting savings rate where the tax rate is 0%, so again this is the amount you can earn in savings interest before paying any tax on that. Finally there's the personal savings allowance worth up to 1,000"

In addition the amount allowed free of tax on dividends will be 5000 for each individual. So someone with 100,000 invested and receiving a 5% dividend would not pay tax on the dividends.

The Bank of England has hinted that there may be a gradual rise in the interest rate to tame inflation.  Good news for savers as, even before the rise, financial houses will begin to consider raising what they offer.  And about time, too. It has been a long hard winter.

Spring Budget 2017http://www.hl.co.uk/financial-advice

The ISA year end is now long past (April 2017). The allowance has now risen to 20,000 p.a. But it is now impossible to find a no strings ISA paying as much as 2% even if you are prepared to leave it five years.  Even so, five year deals might be worth considering if you can withdraw cash during that time (usually with a penalty on the sum withdrawn).  Virgin ISA's allow some penalty free withdrawals.  You may also find some regular savers paying quite well. Hfx pays 2% and you can save up to 250 a month. For extra security one might look to the government backed NS&I, which is paying 2.2% on a 3 year bond (up to 3,000) - but no withdrawals during that time.

Regardless of whether you keep an investment in an ISA or other savings most people will not have to pay tax on investment earnings The current tax allowances (IHT, income etc) can be seen HERE 

From April 2017 the new LISA (Lifetime ISA) scheme has begun with the aim of adding 25% to any ISA funded by people 18 to 30. It is NOT being taken up by ANY of the organisations offering cash ISAs, although three companies are offering Investment ISAs that will attunsecuredt this bonus. The others say that it is too complicated. The bonus is only payable if the ISA is used towards house purchase or towards a pension after the age of 60 ! Not a lot of 18 year olds (or even 30s) look that far ahead.  If the ISA is not used in the appropriate way the bonus is reclaimed.  Looks as if it is dead in the water (well done George Osborne, who didn't consult the industry).

The following quote is now thought to be a hoax  In 1887 Marx was supposed to have said : "Owners of capital will stimulate the working class to buy more and more expensive goods, houses and technology, pushing them to take more and more expensive credits, until their debt becomes unbearable. The unpaid debt will lead to bankruptcy of banks, which will have to be nationalised"

I see one on line retailer is being fined for not adequately checking whether people can pay for household goods.

The popularity of the quote is, no doubt, because it appears to be so true to the current situation in many countries....
June 2017
After  9 years the Royal Bank of Scotland is still making losses and still owes the taxpayer 20,000,000,000 (Twenty billion) although, as the share price recovers, there may come a day when we (i.e. the taxpayer) make a profit and shares may, once again, pay a dividend - providing the board doesn't give the hundred executives one million pound bonuses, as they did in the days of "Fred the Shred" !

You may be able to top up you National Insurance record, if there are gaps preventing you from getting a full basic pension. See https://www.gov.uk/voluntary-national-insurance-contributions

Pension pots
. What happened to folk who opted to invest a 100,000 pension pot in 2015, when that became possible ?  It must have been worrying initially as the markets fell almost immediately after but have recovered since.  If someone put 100,000 in stocks and shares in 2015 and decided to cash in 4% (4,000) per annum, after the initial fall,
shares exposure helped these pots recover by the end of the two years, to around 105,475, so they would have done better than if they had bought an annuity (and would still have their capital intact).

Down down!  Hfx (not allowed to say its name) have reduced their 5 a month reward to 3.  National savings has reduced all their rates to 0.75% from May. Nationwide are also reducing their ISA and savings rates.  Even the amount distributed by the National Lottery is coming down. When will it ever stop ?  The only bright news is that you don't have to pay tax on the first 1000 savings interest (or dividends... if you are lucky enough to get that much.  It is ironic that the new amount that one can now stuff in ISAs is 20,000.  One wonders who will bother. Not a lot of incentive.

Anyone over 40 can skip the following paragraph, unless you are advising a youngster !
LISAs Lifetime ISAs  This is a strange new product is being pushed by the government from April 2017. 
It is intended to help two groups (1) First time buyers saving for a house (2) People saving for a pension. You have to be over 18 and under 40. The government (er.. you and me if you don't qualify) will add the princely sum of 25% to any amounts you save in the scheme. You can add up to 4000 per annum.  So, a couple saving for a house could add as much as 2000 per annum (25% of 8000) towards their house deposit. Someone saving 4000 p.a. until they are 50 could have as much as 32,000 added to their pension pot. This would be in addition to any (compound) interest of dividends paid by the scheme.  Dividends ?  Yes, the money can be saved in cash or invested with an Investment company. This is all so new that it is not yet clear which organisations will offer LISAs and what interest/dividends are likely to accrue.  BTW. If you withdraw your cash and do not use it for these two specific things (first house or pension pot) your will lose the additional sum added by the government ! See more at http://www.moneysavingexpert.com/savings/lifetime-ISAs

At an average of 3.5% of income we are saving less than at any time since records were taken.  The climate of low interest rates is dissuading people from saving and is keeping the country going as we go deeper into personal debt.

************

Don't forget that if you and your legal partner are both under 81 and one is not a tax payer you could be getting the Marriage Allowance of 220 for this tax year AND for the last. You need to transfer unused tax allowance from one person to the other. Only HALF of those eligible are doing this and may be missing out on 432! If one of the couple is over 81 then see  https://www.gov.uk/married-couples-allowance, which is slightly better but is being phased out at some stage.

It is difficult to find a savings account paying as much as 1%. At that rate one would need 50,000 tucked away to make 500 a year. But I have saved that much merely by moving from one energy supplier to another. Consider, too, that your fuel bill is probably being paid from taxed income  It is vitally important to keep tabs on this.  I suggest TWO links you should try  
1:. http://www.moneysavingexpert.com/cheapenergyclub.
and 2 The official OFGEM page at http://www.goenergyshopping.co.uk/

Post Brexit referendum everything financial is up in the air. The Bank of England reduced the bank rate to 0.25% (now up to 5%) and pound has fallen against most other currencies, including the Euro and the dollar. The result is expected to be rising import prices (e.g. food, oil, gas) and therefore rising inflation. If the economy needs a boost the bank rate could even reduce to zero (as did Japan).  Organisations seeking safety are even investing in government stock at LESS than zero percent. So, for now, I must delete all references to bank and building society interest rates until things calm down. 

People keen to pay off their debts were, briefly, thrown a lifeline when the governments suggested they might sell their annuities.  Such hopes were dashed within a week when ministers realised that they were likely to be ripped off by money-grubbing financial organisations. So, what is next ?  What about a zero interest credit card. Oh! Great! Sainsbury's has just launched one that - on balance transfers - does not have to be settled for nearly four years !  Mind you, you will have to add on another 2 to 4% of the amount transferred and then, if you use the card for more purchases you risk having to pay 18.9%. Little wonder that the Advertising Standards Authority ruled that their advertisement showing a couple talking about using the card to finance their home makeover had "trivialised the process of taking out credit and was therefore irresponsible". 

So, what is left ? Equity release on a house? Which (magazine) discovered that many 'middlemen' did not make clear the pitfalls, such as penalties for early repayment of the loan and inheritance tax implications.  One should read guidance given by the Equity Release Council and only do business with a company that is a member of that body

People worry that when the last village bank closes they will be without banking facilities.  But for those which still have a Post Office Post Office banking includes Direct Debits, Standing Orders, Online, phone and Mobile banking, card use abroad, contactless Visa card, cheque book on request, even an overdraft at 14.5%  There is a charge for going overdrawn or bounced cheques.  You can avoid these for a monthly 5 fee

Tax free interest (more detail and the savings tax relief)

According the Money Savings Expert "Any interest you earn from bank accounts, savings accounts, credit union accounts, building societies, corporate bonds, government bonds and gilts is tax free up to 1000 of interest. This includes interest earned on other currencies (eg., US dollars, euros) held in UK-based savings accounts. Peer to Peer Lending interest is also covered, but dividend income from shares is not  included in the allowance (although benefits in another way - see below **). It also includes interest distributions (but not dividend distributions) from authorised unit trusts. open -ended investment companies and investment trusts and most types of purchased life annuity payments"  (end of quote) Higher rate taxpayers will only be able to earn 500 interest free of tax.
Effectively, this means that for 95 per cent of savers all interest in High Street accounts will be paid tax-free — giving them a 20 per cent boost.  And with many bank accounts (e.g Santander) paying more than ISAs this will probably mean that people will begin to move cash from ISAs to those accounts. Currently, banks and building societies automatically deduct basic rate tax of 20 per cent before your interest is paid and pass it directly to HM Revenue & Customs. Higher earners paying 40 or 45 per cent income tax have to declare the interest they receive on a self-assessment form. Lower earners who  don’t pay income tax had to fill in a form to stop the tax being deducted. These deductions mean that someone with 20,000 in a High Street savings account paying 2 per cent earned only 320-a-year net interest if they were a basic-rate taxpayer but will now earn 400. A higher-rate taxpayer previously earning 240 and a top-rate taxpayer 220 will get more than before.

But since 2015 those on low incomes have already had a much larger allowance on savings interest.  I would advise anyone who suspects they are paying tax on their savings accounts to have a chat with their bank or building society.  It is all a bit of a muddle and I suspect many people are losing out.  After all, how would a bank or building society know your level of income ?

For the article from MoneySavingsExpert click on the link.

Another important change is the greater flexibility of ISAs. From April 2016 it will be possible to withdraw them and reinvest them in an ISA later in the year.

Along with these changes and reduced company taxes, one can see why IDS resigned over the proposed reductions in Invalidity benefits.

New proposals in the 2016 budget indicated that small savers (putting away 50 a month for two years, will receive a bonus added to their savings. But things like an increased ISA annual total and a "Lifetime ISA" (up to 4,000 per annum) also attracting a 25% bonus, will not be available until 2017 and cashing these BEFORE retirement will incur a 5% charge. Confusingly, this is similar to the current First Time Buyer's ISA, which CAN be cashed for a deposit on a house.

ISAs From April 2017 the ISA maximum per annum became 20,000. There is no longer a restriction on transfers between cash and investment ISAs but there is greater flexibility in that you can replace cash ISA amounts you withdraw without it taking you beyond your maximum allowance.

Although it may be wise to retain ones ISA holdings, there will be competition from other financial organisations, as many savings accounts will be tax free. However, from 2016 it has been possible to withdraw ISAs and put them back again within the year.

Although the total amount that people up to 75 can save into pensions (via SIPPs) is reduced to 1million, amounts invested in SIPPs will continue to attract an addition from Inland revenue equal to their tax rate. This means that someone on the highest tax rate need only invest 6,500 in a year but this will be made up to 10,000. Surprisingly even non tax payers will also have a gift from the tax man if they invest in a SIPP

However, the amounts charged for servicing your SIPP varies, not only from one financial organisation to another but also depends on the amount you invest.

These differences are shown clearly in the chart below :

 Sipps charges

 
Temprary Reduction in the protection level on savings  

From 1st January 2016, the Financial Services Compensation Scheme (FSCS) limit was changed from its previous level of 85,000 to a new deposit limit of 75,000. This created a potential issue for savers who were previously fully protected and have found themselves over the new limit. And, having inconvenience people, who move some of their cash, they have now returned protection to 85,000 per person per organisation. What a futile exercise.

BUDGET 2016
As most people will have heard, the Chancellor suddenly dropped his plans to cut working tax credits. But other ideas were quite significant. In future banks will pay up to 1000 interest on savings accounts without deducting tax. This does not affect ISAs, the annual amount of which remains the same. The personal tax allowance will rise to 11,000. There will be a significant increase in Stamp Duty on almost all second home purchases, including Buy to Let.  The State Pension rises to 119.30 a week but new pensioners will receive 155.65, creating two levels of pensioner.. Student maintenance grants will be replaced entirely by loans - tough on the poorer students.  A very generous Help to Buy scheme will be introduced for the Greater London area. With a 5% deposit buyers will be able to borrow 40% of the cost of a house, up to 600,000, free of interest.

Help to Buy ISAs Anyone 16+ can start one of these with the intention of building up a deposit for a house. If they put it towards a deposit the government will add 25%, up to a maximum of 12,000 - to which would be added 3000. The best rate is 4% from a High Street Bank.The minimum to attract a bonus is 1,600. If you don't put it down as a deposit you get the interest but not the bonus

With the increase in the value of houses, many people are property rich but, in their later years, if on a basic state pension, may be cash poor.  In the past, the idea of Equity Release got a bad name because, if the loan was based on Compound Interest, (especially at punitive rates) it was possible that the loan might grow to the value of the whole house - especially if the borrower lived to a ripe old age. But why shouldn't someone borrow cash against the security of their house and pay the interest each month, as one does with a normal mortgage.  After all, what has age got to do with it ? Www.purelyretirementmortgages.co.uk is and example of a site which will offer advice on that sort of arrangement. See the section on Interest Only Lifetime Mortgages With luck the increase in house values will keep pace with the interest paid. However, I have not checked this site personally and I advise you to seek advice on any big financial arrangements. Interest rates are currently low but might rise, unless fixed at the outset.  See  :  http://www.maturetimes.co.uk/equity-release-myths-dispelled/

Not strictly Savings but a clarification of 'Rights to Buy' for Council tenants. A big article but interesting http://www.remortgage-me.co.uk/council/

Until recently the National Savings On line Instant Access ISA has been a favourite of many because it had at least kept up with inflation and is considered as safe as they come. Unfortunately from 1st May 2017 this has been reduced to 0.75%.    

But if you want to look into investing you can have a look at the site where the Nationwide BS explains the mysteries

The Financial Services Compensation Scheme protection limit is ow only 75,000 (per organisation if it fails), so one really does need to be sure you are covered.

Santander's popular 123 account
 currently had a charge of  24 p.a.  In January 2016 this increased  to 60 p.a. So, is it still be worthwhile ?  The answer is that, with the cashback allowances on household bills AND the 3% allowed on substantial amounts held in the account, it may still be worthwhile providing at least a credit balance of 8,500 is maintained.  Bear in mind that a couple with a joint account can double the amount of interest bearing savings to 60,000 @ 3%.  The interest is taxable, so less attractive to higher tax payers.

EQUITY RELEASE ?
An excellent article in Mature Times (website) about equity release for the older set. This points out the advantages. That people could release some cash, paying low current interest rates, while their property may continue to rise in value. Up to the age of 75 cash might even be added to their pension pot (e.g. a SIIP), with the government adding an amount equal to their tax rate. http://www.maturetimes.co.uk/please-release/   The well heeled can add as much as 40,000 per annum with the tax pay adding up to 45%   Even retired people can add up to 2880 p.a. and get tax back at their current rate.  What is more, with the current shortage of houses, the chances are that house inflation will make up the difference of what they borrowed.

AGE ACTION ALLIANCE FINANCE (Much good advice and useful links)

Marriage Allowance Tax Transfer  Must be under 80, and in a legal partnership..One is a  basic rate taxpayer, the other doesn't use all their allowance. It is now possible to transfer part of one partner's tax allowance to the other

HMRC  estimate as many as 4 million people are eligible. Unfortunately the online request does not tell you if you are actually eligible. ,

If you didn't claim, it is possible to do so within 4 years of the relevant tax year. If you make a claim prior to, or in, the year you want to transfer your allowance, it will remain in force until you tell HMRC to stop.If you claim after the year then it will only apply for that year. To claim future years you will need to apply again. HMRC does recognise that some customers may struggle to apply online and plans are being put into place to address the issue.

Although there is 50billion in Premium Bonds the amount distributed in prize money has always made it a bad investment.  But, even though the amount distributed is only 1.3% this is beginning to compare with the miserable rates from savings accounts. After all the bonds are easily cashable and the winnings are not taxable.  So, what are your chances if you have a spare 40,000 languishing in a bank somewhere.   But see NS&I for the latest on Premium Bonds. And see a chart at Money Savings Expert

 https://www.nsandi.com/sign-email-updates  

I had a horrendous time accessing my National Saving Account, for over two months.  It was all to do with passwords and security checks.  I reckon to know a little about computing on line.  If it takes me this long I hate to imagine how many other people have difficulty with their site.  I made recommendations but doubt very much if this stuffy organisation will take note, even though I have also made them via my local MP, who happens to be in charge of improving government websites. At least NS & I compensated me for my trouble.

People may wonder what happens to the ISAs held by a spouse who dies. It is, of course, passed to the spouse if no other decision has been made but it used to lose its tax-free protection. Under new rules the surviving partner will be able to keep their tax-free ISA allowance.

Children's Accounts  Hfx regular saver pays 4%. Nationwide pays 3%. This is not an ISA but is for under 17s.  Why not help a grandchild?

From 2014.There were new rules on Intestacy (dying without a will, like 50% of us!) See the government site at https://www.gov.uk/inherits-someone-dies-without-will: For the many couples who are not married, this is a very important issue, especially if there are children.  It is particularly important for them to have wills and keep them up to date with their current situation.

People who have difficulty getting a credit card can try Vanquis.  But I just noticed that they charge 39.9% if you don't pay it off each month

Although my opinion of credit cards is only marginally better than pay day loans and pawnbrokers, they continue to be universally popular and many give people a chance to get on top of things by transferring their existing credit debt to another lender, with zero percentage interest up to three years.  There is a one-off charge, which in one case is as low as 0.65% of the amount transferred. But that option is probably only open to people who can convince the lender they can pay it back. To check this you can complete a form at https://creditcards.moneysavingexpert.com/?balance-transfer.

Useful Technology !  It is a wristband that can be programmed to stop your habits.  This one gives you a mild electric shock when you go to overspend.

shocking writband

In my view they should be given free with every credit card.  But they wont !

N.B. You cannot use old 50 notes in the shops any more. Since October 2014 the only place to exchange them has been the Bank of England . And old pound coins should be changed by October 2017

People are using 'creative saving methods'. One paper seriously suggested that you open a Nationwide Flexaccount with 1000 a month (to get the 5% they allow on the first 2500 held in it. You then make a Standing order for this 1000 to the TSB account (which also pays 5%). You then make a standing order for the following day to a second TSB account (!) and the day after you make a Standing order for the 1000 back to the Nationwide. This merrygoround apparently would enable you to make a taxable 5% on up to 6,500 split between the accounts ! It all seems so ludicrous and about is inefficient and moving from one energy supplier to another every year or so.. Please check that these rates are up to date.

GENERAL THOUGHTS Saving for one's retirement is problematic. After all, you don't know how long you will live and, with women, on average, living longer than men, it is often they who have a lengthy, solitary, old age. And often it is they who have not been in a position to put money away or have a good work-based pension. Annuities were usually claimed to be the answer.  But the rates have been so low and often provision ceases when the man dies, leaving poor widows.

These days the decisions about what to do with pension pots (if any) have become even more complex. From now on you can do what you like with your pension pot. So, what alternatives do we have, apart from continuing to work ?  Annuities will continue, with even smaller returns if provision is made for a wife. But at least they continue until the end of life. So, many people must be considering alternatives such as income producing investments. As advisers repeatedly tell us ''investments may go down as well as up" but over the years the value of stocks have risen steadily, well ahead of cash savings. Then there is property. Many older people have been through a period of unprecedented increase in the cost and valueof bricks and mortar. Not long ago "Buy to Let" was on everyone's lips. And, in the absence of a decent pension and annuity, it is likely to become popular again. So many young people are trapped in the rental market, unable to save for a deposit, that there appears to be a ready market for rental properties.  But it is not all gain. Landlords have responsibilities for the upkeep of their properties and will have the tax man looking at what they receive. Unfortunately, I do not have any ready answers and, anyway, so much depends on individual situations. But for many people the answer comes down to "Get a job" and this is often preferable if suitable work can be found. Deferring taking one's State Pension increases what one receives eventually.

Other ways to 'save' Often, changing your energy supplier can save you more than having thousands in savings. In addition to my saving 30 a month by changing supplier, after one year the new supplier found that they owed me 134 !  So, by chopping and changing annually, one really can save. In my case I saved over 400. Beats stuffing money in a building society.

Other big savings may be made by attempting to lower your Rating Band. Or getting a cheaper broadband.
Recently a number of organisations have been told to reimburse customers for miss-selling. This included banks and insurance companies, the CPP card protection company and now the Energy Suppliers. If you think you have been miss-sold by the latter the Citizens Advice Bureau has published a form by which you might action a claim.  See HERE . There are many adverts on TV and on line which try to persuade you to apply for a refund.  Better to do it yourself and avoid the fee of such advertisers.

You may also be able to make big savings on your broadband, phone and TV bill. Tip: Join Topcashback and look for what is on offer. e.g. I saw an offer of up to 100 cashback if one took a TalkTalk service from 19.95 a month. My current ISP charges well over 60. In my arithmetic that is 40 x 12 = 480 per annum (plus the 100 cashback).  Try getting that from your savings !

News Around 3.5 million people are owed money by an old power supplier. See HERE  for how to check.  The energy companies have been found to be sitting on 200 million !

** n.b.  The H***fax has asked me to remove all reference to it from this page.  If you want information about their offerings better check out Money Savings Expert, who routinely includes such references.

The Government Money Advice Service :  Click www.moneyadviceservice.org.uk rather than the many other sites that are out to make money.

I have a separate page on (State) Pensions and Benefits

Current Accounts are the 'in' thing.

Financial organisations do not need you money (they can borrow it cheaply elsewhere) but they are still keen to gain customers.  They have lots of other services to offer like iniquitous credit cards !
Please check these old figures....

Look at the Nationwide, TSB, Tesco, Virgin, Santander, First Direct on line bank is offering 100 if you transfer your bank account to them and pay in 1500 a month.  They are so confident you will stay that, if you are not happy after 6 months they will help you transfer out and pay you another 100 !  They have a good regular saver account.
And many offer useful packages of travel and mobile phone nsurance and roadside help

I never give advice on savings or investments but, with savings showing such miserable returns, I was interested to see an article in the Telegraph which suggested that the best performing and most consistent shares were in companies which were large but also paid a reasonable dividend (4%+). Most advisors charge monthly for this sort of research but they published a list of companies which had also seen a substantial price rise this year. The ones that passed the test included Centrica (4.71pc yield), J Sainsbury (4.7pc), Tesco (4.5pc), GlaxoSmithKline (4.6pc) and British American Tobacco (4.4pc).These dividends may have changed.

Since November 2009 banks have been liable for any payments (e.g. direct debits) made after you have instructed that they should be stopped. The new Financial Conduct Authority (FCA.org.uk) estimated that 30,000 people could be due compensation by banks who continued to pay. If they do not repay, you should write to the Financial Ombudsman or call 0800 023 4567 (good number!)

The government Help to Buy scheme is stimulating the housing market. It allows you to buy a new build house with a value up to 600,000 with a 5% deposit + an equity loan of 20% provided by the taxpayer. But you will have to pay back 20% of the value if/when you sell. It sounds great for people who can take advantage of that.  The building trade must be pleased. A little more risky-sounding was the (now defunct) scheme which was due to start in January 2014, allowing you to buy ANY property up to 600,000 with a 5% deposit. Shades of the housing scramble in the USA that got us all in this mess in the first place ? What happens to the loans when people overstretch themselves?  Never mind, it is only taxpayer's money... not real money.

Annuities. Hopefully, by now, everyone is up to speed about shopping round for annuities when that time has come. Nothing shows this more clearly than an article in the Telegraph which said "In fourth place in the table of "plain vanilla" annuities – those with no provision for a spouse and no inflation protection – was a Standard Life product paying 5,363 per annum for a 65-year-old with 100,000 to spend. A table-topping annuity from Legal & General, meanwhile, was paying 5,532 a year, according to the Annuity Bureau. Not so unusual, you may think – getting 160 or so extra for shopping around. But the Legal & General offering was at the top of a different table – the one for "joint-life" annuities, in this case paying a surviving spouse a pension of two thirds of the original income. In other words, someone who decides to shop around for an annuity will not only get more income to start with but will also receive – in effect, thrown in for nothing – a pension that continues to pay out to a widow or widower should the buyer die first! Buying L&G's joint-life annuity could mean a couple receiving (an average) about 40,000 more in total compared with the single-life policy from Standard Life, according to calculations by Ros Altmann, the veteran pensions campaigner.

IN VIEW OF THE FALLING RATES IT IS NECESSARY TO CHECK ALL OFFERS DIRECTLY ON THEIR WEBSITES AS MANY OF THE RATES QUOTED BELOW WILL NOW BE OUT OF DATE

Buy to Let ? Because many older people are finding that their pensions and saving are being eroded some people are rekindling the idea that they should buy a property with the aim of living off the rental in their later years. In a recent article, Mark Dampier, Head of Research at Hargreaves Lansdown does not enthuse about this tactic. In some areas the value of property has even reduced over the last five years, in some cases as much as 25%. So, might this be a good time to buy? Mortgages are comparatively cheap if one has a fair sized deposit and there is a huge population of young people who seem destined to rent rather than buy (as well as a large number of partners who seem unable to live with each other).  But it is not all profit. One has to consider maintenance costs and insurance, although these and the cost of borrowing may be set against the tax which will be exacted from any 'profits'. Mark considers that shares are a better bet; less trouble and much easier to dispose of and, in the long run, more profitable. Me ?  Like Manuel : 'I know nothing'.

Peer to Peer lending The idea of borrowing from and lending to small organisations (instead of banks) has grown recently. One article at http://www.knowyourmoney.co.uk/ points out the pros and cons. An example is ZOPA where you could earn 4.8% p.a. with a five year loan.  Peer to peer lending interest also qualified for tax free interest from April 2016

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I have mentioned it before but for a site which summarises best savings at http://www.savingschampion.co.uk/ is great and it has a warning system, so you don't get caught out with the miserable rates when the bonuses inevitably run out. Among their suggestions are a number of taxable bonds (for people who can't find suitable ISAs or don't pay tax) 

AgeUK also have a series of videos by a financial adviser dealing with debt, annuities and retirement.  See http://www.ageuk.org.uk/money-matters/ 

Paying too much tax ? Inland Revenue is in a mess due to staff reductions. Check your old codes — some have reclaimed 5,000. The Tax Code Calculator also lists past years' codes and shows how to reclaim if you've overpaid. You may be due big money like Chris Kendall: "I checked my tax code, rang HMRC and it told me I'd get over 5,000 back. Incredible!"

An article at www.thisismoney.co.uk suggests that "Those worried about private sector banks might consider National Savings bonds, savings accounts or Premium Bonds - which are directly guaranteed by the government - as possible homes for spare cash".

In these days of austerity there may be ways of saving money apart from looking for meagre savings accounts.  If you have enough cheek - and you know that you have got retailers over a barrel, you could try your hand at bargaining (especially if you have just come back from a Mediterranean market !) 

If your spouse has low earnings it might be a good idea make sure that any tax deductible savings are in their name.  They may then be able to complete a form to ensure the interest is paid gross. Otherwise the tax is deducted at source.

The Financial Services Authority (now the Financial Conduct Authority FCA) has a useful comparative site at  www.moneyadviceservice.org.uk (was MoneyMadeClear) dealing with many different financial offerings.  Just fill in what you want to do and it will show an up-to-date list of what is available. Incidentally I am making efforts to block all adverts which related to debt counselling and PPI miss-selling, apart from official ones.  If you see any, please ignore them.

Junior ISAs. The amount allowed for cash or stocks ISAs has been upped to 3,720 per annum. Junior Isas will automatically be converted to standard Isas when the child reaches 18. They are only be available to kids born in 2011 or later, or before 1 September 2002. Anyone born between those dates is instead eligible for a child trust fund (CTF) which is also a tax-efficient vehicle, though this is closed to new joiners. However CTFs can still be added to (up to 4000 p.a.by parents or grandparents.
Child trust fund future In March, the Government announced the limit for CTFs as 3,000 but eventually it increased it in line with the junior Isa to 3,720. CTFs can be converted into a Junior Isa when the child is 16. The worry is banks may not offer their best rates to CTF holders as they are not available to new customers so there is little incentive to gain business. From 2015 they could be transferred to Junior ISAs, which may pay more.There is a booklet "Investing for Children for Dummies, which may still be available from www.fandc.com/children or 0800 3698 561 from F & C, an investment company

Going Abroad ? If you don't want to be left stranded when your credit card is refused it is advisable to tell your bank you are going.  Most also have an emergency number you can call and some even can let you have a code to get cash from a machine. So get their emergency number and add it to your mobile phone list or keep a note somewhere.

Are my savings safe ?  Recently a spokesman for the government said that, in future, banks should not assume that the taxpayer will bail them out. This is taken as a shot over the bows to banks which are still acting as if they are 'too big to fail'. In view of this new stance should we ask 'are my savings safe?'. An excellent article on this subject can be found in Martin's money tips at  http://www.moneysavingexpert.com/savings/safe-savings. After all, the Financial Compensation Scheme is known to have too little cash to be able to compensate the customers of even a small deposit taker.The amount covered is now back to 85,000 per customer per organisation. How would they raise the money ? Martin explains this mystery in the article.  But scares like Iceland's Kaupthing and the Bank of Cyprus don't help.

If you wonder why you rarely see adverts on my pages for 'Debt Help' sites it is because I actively filter them out.  This has proved to be a wise course. Recently the OFT has closed 19 sites which targeted disabled people and those in debt with offers of 'financial help'. Examples include (and I quote Computer Active) Loansforpeopleondisability and Samedayquickloans. If you have money problems, although they are very busy, your first port of call should be the Citizens Advice Bureaux.  Although the Office of Fair Trading no longer exists you can still find links on the old site at http://www.oft.gov.uk/

The Daily Mail points out that banks are taking advantage of the ISA rules, which make tax payers feel that they SHOULD take up their annual allowance.  Certainly one is hard put to find a decent rate without strings - usually a bonus which runs out after a year, meaning that you have to constantly move your money.  If you do not, the chances are that you will continue to get a miserable rate.  It is as frustrating as having to move fuel supplier every year. This 'churn' must cost the companies money and is certainly a nuisance to the consumer. But the banks hope lethargy (or confusion) will rule and they will get your cash at 1% or less. The Mail article pointed out that, even after tax, many savings rates beat the ISAs on offer. One of the 'strings' is that most banks and building societies do NOT allow the transfer of existing ISAs.  They are after NEW customers and NEW money.

The Mail suggests the following links for financial help :  As a rule Org Uk addresses are 'not for profit'

Saw an article in the Sunday Mail which mentioned that some parents and grandparents are helping youngsters get on the property ladder, by using their savings in an "Offset Loan" arrangement.  Their cash earns no interest (well, it is pretty low these days) but is taken into account in the mortgage.  In one example their daughter's payments were cut by 250 a month, meaning that she was paying no more than she had been paying to rent one room in a house. Try Newbury, Market Harborough or Yorkshire Building Societies.    

 The tax mess. The tax authorities have admitted to giving out incorrect tax codes to employers, which will have resulted in over 5 million pay more or less tax than they should. They are beginning to send out letters demanding more or paying some back.  The people most likely to be affected are those who have had more than one source of income during the last two years.  It is less likely to affect the self employed or pensioners (unless they also have a job).  The period over which repayment is required seems uncertain.  There was vague talk of people owing over 2000 being asked to pay more quickly than those asked to pay less. There has also been talk about people being charged interest if they do not pay on time.  This adds insult to injury for a mistake that is THEIRS and there has been hostile reaction to this.
2 million people have underpaid tax and 4 million have paid too much because of errors by the tax authorities. If you get a demand you should check the facts carefully.  If you have to pay you will be allowed to do over a period of a year.

A new site which tackles financial matters is at www.savvywoman.co.uk

Purchased Life Annuities   :(Article extracted from www.thisismoney.co.uk) Hard-pressed savers were given no cheer. Continuing low interest rates are forcing savers to consider new ways to generate the income they need. And, for older people, higher returns 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 a much higher rate. 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 might receive 1,376 a year and an 80-year-old would get  around 2,000 p.a.. 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

Another Annuity Comparison site is at  http://www.bankingtimes.co.uk/

Saga reckons their annuity rates are better than most. You would get more if you are a smoker and positively unhealthy. .

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

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.

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 some companies 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. But don't use the card for purchases unless you want to pay more. Credit Cards also vary quite a lot in the length of zero interest on purchases, so check before committing to one.

**IVPPs  Hargreaves Lansdown 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 !

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The Financial Services Compensation Scheme assures savers that savings in UK banks and building societies are safeguarded to the extent of 85,000 per person (170,000 for a joint account).  

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 85,000 per person's account

The Bank of Ireland is covered by the Irish Government.  
Ing is covered by the Dutch Scheme.  
National Savings is covered to 100% by the UK government

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.

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.

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.)

The banks have begun to share credit information about customers, so tightening up on loans to people who have accumulated debts with various agencies.  

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 See https://www.gov.uk/

The current tax allowances can be seen at  HERE  (IHT, Income etc)

For older people a good site is the AgeUK site  or phone their SeniorLine on 0808 169 6565 for free advice on financial matters.

TRACING CASH There is about 466 million lying idle in National Savings accounts.  If you think you might have similar savings lying around you can ask NSI to try and trace it on 0500 007 007.  There is also around 30 million of unclaimed Premium Bond prizes. Unclaimed National Lottery winnings amount 3 million.  If not claimed in 6 months it goes to charity. Company pensions : Go to the Pension Tracing Service on : https://www.gov.uk/find-pension-contact-details  For bank and building society accounts try www.mylostaccount.org.uk  But for people who have died get a leaflet from https://www.bba.org.uk (the British Banking Association. The link still leads to many useful places) and tap in 'Lost Account'. For shares you can try This is Money  For Life Policies, unit trusts or dividends there is a site run by Experian at www.uar.co.uk (Unclaimed Assets Register) but there is a charge of 25.  You can also try www.policydetective.co.uk to trace your old policies (free).  Before trying these services you should gather as much information as you can, such as names, previous names and addresses, policy or certificate numbers, companies

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 !   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.

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EQUITY RELEASE  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.  Two alternatives to releasing equity are downsizing to a cheaper property and/or taking in a lodger.
Financial Mail also has a free guide called Home Truth  (Tel 0800 068 6065) . 

The government FSA no loger exists and is now divided into the Financial Conduct Authority and the Prudential Regulation Authority, which is nothing whatsoever to do with the insurance company of that name but is, in fact, the Bank of England.  Oh what a tangled web they weave !

 And IFA (Independent Financial Advisers) can put you in touch with members on 0800 085 3250 or www.unbiased.co.uk   Norwich Union (Aviva) 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.

Age Partnership is the UK's leading over-the-phone specialist in equity release.
Some equity release plans impose an early-repayment charge, so you could incur charges should you wish to pay them off before your death. However, like a standard mortgage, these will vary from plan to plan, reinforcing the benefit of Age Partnership’s specialist equity release advice before you proceed

Compare the entire Equity Release 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.
Another site is www.equityrelease.net

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.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  http://money.guardian.co.uk http://News.ft.com/yourmoney (Financial Times). www.moneysavingexpert.com & www.yourmoney.com  

See also : www.mortgagerates.org.uk and also daily updates on all the latest rates at www.mortgagerates.org.uk/news/

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. Children over 16 can now have a Junior ISA (cash or shares) up to 3,720 in their name. Parents or grandparents can contribute. But it is a gift and can only be drawn by the child when they are 18.

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

INHERITANCE TAX

2016  Rising property values mean that more people are being caught by the singeing inheritance tax.  If you would like to download a booklet about this do click on https://www.savingschampion.co.uk/news/iht-guide-signup/  Bear in mind that the site will ask for your email address and you may be signing up for their newsletter.  No problem.  Just as long as you know.

(Article from Savings Champion) : In 2013/14, inheritance tax raised 3.4 billion for the taxman and receipts are forecast to be 4.2 billion in 2015/16. With professional advice, many people can avoid this tax, which is expected to affect more people each year. The guide, produced by our sister company, The Private Office, offers an excellent overview of the key considerations relating to inheritance tax.

Inheritance Tax (IHT) In 2008 this was raised to 325,000  per person ( 650,000 for a couple). And is still the same in 2016. 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.  

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 useful article  on you liability to pay for care is at http://www.caredirections.co.uk/

You can give away as much as you like during your life (** but see below re Benefits and Care) 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.  Do check these figures as they are likely to change.

You can give away a total of 3000 per annum without any IHT 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.

** You cannot give away as much as you like in order to qualify for benefits or free care. Mind you, you could book a couple of 5 * world cruises !

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.

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.  Check latest figures

Child Trust Funds. From 2005, children born after 31st August 2002 received a 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 could be topped up by parents or grandparents. This scheme has now been drastically amended.

In debt ?  First goto the Citizens Advice site https://www.citizensadvice.org.uk/

http://www.creditjungle.co.uk 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.)

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, 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 Adviser and the Banks (who have set aside millions for this purpose). Before jumping in to this, do 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.   https://www.nationaldebtline.org/    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. Whatever you do avoid tempting sites that say  'Write off 83% of your Debt' .  There is bound to be a catch.

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 your 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 , 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.

Capital Gains Tax.  This is a complex subject and the government has upset a lot of business people by trying to make it simpler.  Have a look at https://www.gov.uk/topic/personal-tax/capital-gains-tax

If you are having a clearout, are you liable for Capital Gains Tax on what you sell?  The answer is maybe. .  In 2013 the CGT Allowance was 10,900 p.a.(each). If a gain since purchase or inheritance is over 6000  (or 12,000 if owned jointly) you might be liable for tax.. But, surprisingly, not on 'wasting assets' (items such as mechanical devices with a lifespan of less than 50 years)  And the tax man considers collectors cars, antique clocks and guns to be wasting assets. So, you can see that it is a very complex issue.

You may get interesting information (and cheaper dealing) by getting in touch with Hargreaves Lansdown www.hl.co.uk. They also have a regular newsletter, in which they point people in the general direction of companies or investment organisations which appear to regularly beat the odds e

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. ETFs 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   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.  .

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Wills: Until 1st October 2014, if you did not leave a will (died Intestate - and only half of us do) your estate would be divided along a set pattern which distributed cash to your relatives. Under those rules, in England, a spouse would get the first 450,000 of your estate and 50% over that amount. Couples, where one died intestate did not get anything from their partner's estate. 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. It is particularly important that unmarried couples write a will.

If you want to make a will on line see http://www.tenminutewill.co.uk/main.cgi The charge is from 30 for a single person.  See interesting details regarding the differences between EU and English law with regard to wills. Until recently EU countries had 'Forced Heirship' rules, whereas English law allows you to will your estate to whoever you wish.

Will Writing from 34.95  https://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 invalidated by the probate office -- as can happen with online downloads improperly printed and stapled at home.

Remember, also that, each November is 'Will Month' when certain solicitors will create your will for a donation to certain specified charities

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 ?

The new rules, which are quite different from those prior to 1/10/2014 can be found here https://www.gov.uk/inherits-someone-dies-without-will:

Tracing a will. You need a grant of representation. There are three types.  Probate, which is granted to the executors named in the will; a letter of administration, granted to someone other than an executor, when a valid will is left and letters of administration when the deceased did not leave a will.  To apply one must send to Postal Searches and Copies Department, Leeds District Probate Registry, York House, York Place, Leeds LS1 2BA with the name, data of birth and date of death.  There is a small fee. http://www.justice.gov.uk/courts/probate/copies-of-grants-wills

Annuities, Stakeholder Pension Schemes, SIPPS (Self Invested Personal Pension), GARS (Guarantee Annuity Rate Policies), Life Insurance and Endowments have now been moved to the Pensions and Benefits Page  

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