SimplyFinance

Unemployment, high inflation raises debt crisis

2011-03-29T23:00:00Z

A warning has come that rising unemployment coupled with high inflation will cause problems for thousands of people accruing personal debt.

National debt charity, Consumer Credit Counselling Service (CCCS) has made the announcement following the Office for Budget Responsibility's prediction for peak unemployment, debt, and inflation over the next few years. The revised forecast for unemployment alone in 2011 is estimated at 8.2 percent.

Personal finance website SimplyFInance.co.uk has produced guides for people facing debt difficulties. Read about some of the personal debt management options on SimplyFinance.co.uk, or use a debt calculator to help get a clearer picture of what your debt actually is.

The charity says that unemployment is a major factor in personal debt problems with almost half of the people it counselled last year citing unemployment or reduced income as the reason for their debt problem.

CCCS External Affairs Director, Delroy Corinaldi, said difficult times were ahead. "The OBR forecast spells disaster for thousands of UK consumers and the next few years will see a significant rise in the number of people in need of financial help and advice. We urge anybody struggling with debt to contact a debt charity such as CCCS for free counselling and support."

Unemployment protection insurance is also on the rise, with many taking up the opportunity to protect their income. Policies vary from 12 to 24 months, and are often sold with mortgages, credit cards, and other loans. It is often expensive to purchase policies from lenders, so it pays to look at policies from independent brokers.

For more information on managing debt, income protection and personal finance issues, visit SimplyFinance.co.uk.

Larry - and why he needs pet insurance

2011-02-22T00:00:00Z

Number 10 Downing Street has been hitting the headlines with the news of Larry, the new rat-catching cat moving in. And while Larry is by all accounts settling in nicely, the truth is that without pet insurance, Larry could find himself in serious financial trouble.

It was an embarrassing scene some months ago when a rat scurried across the doorstop of Number 10 during a press briefing. After previous success with keeping a cat and as such the rodents at bay, Larry was brought in from Battersea Dogs and Cats Home. Larry comes as a recommended mouse and rat hunter, but according to one pet insurer, Larry's small victims are unlikely to go without a fight.

Karen Jakes, head of AA Pet Insurance says: "Larry will need to be on his guard when he's out ratting. A rat bite can form an abscess in a cat's skin which might not immediately be noticed beneath the fur but it is likely to become infected and make the cat very unwell within two or three days. It can be very serious and even fatal if not treated immediately. Cats have been known to contract a form of leprosy from a rat bite.

"I would certainly advise staff at Number 10 to keep a close eye on Larry when he's back from his hunting expeditions. At any sign of incisions on his skin or if Larry seems listless, they should immediately take him to a vet."

Veterinary Surgeon, David Brooks says insuring our (often) furry friends is vital. "Pet insurance is the best option to protect the wellbeing of your pet and as well as vet bills, most policies cover for a variety of other useful things," he said. "These include paying for advertising costs and a reward should your pet be stolen or lost, and reclaiming costs for booked holidays if your pet becomes unwell and you are therefore unable to travel. Many policies now also cover homeopathic remedies."

An estimated 1 in 3 pet owners need to claim vet treatment, and with the cost of a broken leg costing upwards of £1000, now is the time to insure your pet's health. Pet insurance can be tailored to your pet's specific needs, and with a whole host of pet insurance products on the market, it can be tricky knowing where to start.

SimplyFinance.co.uk has a great guide to getting the best pet insurance for you pet that helps take out the guesswork, and a useful pet insurance needs calculator. And Larry? He is happy as, err…

Watch out for Mortgage fees when Shopping Around for a new Mortgage

2011-01-26T00:00:00Z

Now may be a good time to think about taking out a new fixed rate mortgage to protect yourself against possible future interest rate rises. However new research from Which? Money shows that mortgage lenders charge a baffling array of set up and other fees on their mortgages, for example, fees for booking an interest rate, administration fees, arrangement and valuation fees.

In addition many lenders will also hit you with charges if you get behind with your payments, want to change from an interest-only to a repayment mortgage and if you take out your buildings insurance with someone other than your mortgage provider, for example. In fact Which? Money found 39 different types of fee on the 1,100 fixed rate and tracker mortgages it looked at. Shockingly most mortgage lenders have more than 20 different fees. Newcastle Building Society has the most with 29 and Ipswich Building Society has 28 different fees on its mortgages. However, a handful of providers have kept the number of charges to a minimum – Stafford Railway Building Society has only three different types of fee, and HSBC and First Direct have just four and five charges respectively.

Stuart Beattie from HSBC mortgages commented on the research: ‘Once a customer completes their mortgage with HSBC there are no further fees during the life of the loan. Our transparent fees approach provides homeowners with an assurance that if the fee isn't mentioned in the sale documents, then they won't have to pay it. We also offer a number of 'fee-free' mortgages where booking and completion fees are removed and a standard valuation is included at no cost.’

Mortgage fees are very important as they make it almost impossible to easily compare mortgage deals and work out which is the best mortgage for you. The best way to compare mortgage deals is to look at the total cost of the mortgage over its life, or introductory deal period.

Which? Money editor, James Daley, said: 'Finding the right mortgage used to be as simple as looking for the best rate but the array of fees nowadays has made it a much harder task – it’s never been more difficult to understand how much your mortgage is going to cost you. Lenders should make it clear what the total cost of a deal is so borrowers can make easy comparisons.'

Which? Money also found that the level of fees has gone up since the financial crisis in 2007, with four out of five two-year tracker mortgages for 90 per cent of the property’s value charging over £990 in set-up fees in 2010, compared with just one in five in 2007.

How to get a Good Deal on Your Mortgage

Firstly you need to think about what sort of mortgage is right for you. For example, a fixed rate mortgage interest rate will not change for the length of the fixed rate period, typically between two and five years. Tracker mortgages change in line with movements in the Bank of England base rate plus a percentage. With many industry experts expecting interest rates to rise in 2011 a fixed rate mortgage means that your repayments won’t change for a period of time.

However it’s essential that you shop around for a new mortgage and speak to an independent mortgage broker to find the right mortgage for you. Some mortgages aren’t available from mortgage brokers so it’s important that you also look at what is available directly from mortgage lenders. You can compare all available mortgages using an online comparison tool, like, the Mortgage Finder from Which?. You will also need to check if you have a penalty to pay for leaving your existing lender.

When comparing mortgage deals you should take into account the total cost of the mortgage rather than just looking at the interest rate – this way you will get the best deal taking into account fees and charges. The interest rate you will pay and the type of deal available to you will depend on how much deposit you have. In recent years lenders have reserved the best deals for people with larger deposits and it has become harder to take out a new mortgage or switch your mortgage to a new provider.

Get a free mortgage quote!

Ethical Investments: The Green Way to Grow Your Money

2010-11-10T00:00:00Z

This week has been named as National Ethical Investment Week, so if you are considering creating or expanding your investment portfolio, now is a great time to find out about the greener way to make your money grow. National Ethical Investment Week, which is coordinated by the sustainable investment and finance association (UKSIF), has been established to raise awareness of the options available to investors with a social conscience.

Ethical investing incorporates a number of ideas, the main one being a conscious choice to put money into companies and products that have a socially responsible ethos. You can select the issue that is most compatible with your personal values, be that environmental preservation, human rights or another social concern. You can even actively choose to only invest with companies that do not themselves invest in socially questionable products such as arms, tobacco or pornography.

One point to note is that there are different 'shades of green' when it comes to ethical investments. 'Dark green' products are those with a high level of screening, so that you are actively choosing products for their credentials and discriminating against companies that do not meet your values. 'Light green' is a more reactive investment approach - the fund manager will take the green route wherever possible, but 'going green' will not always be the main factor in the investment choices. Be very clear on your values when talking to an investment manager to ensure that you are comfortable with how your money will be invested.

UKSIF believes that the 'tennies' could become the decade of financial responsibility, with increasing numbers of consumers becoming smarter about choosing their investments - "less Gekko, more Eco" as Penny Shepherd, UKSIF Chief Executive puts it. Shepherd comments: " The research shows that although only 8% of savers and investors currently hold green and ethical investments, a further 37% will consider doing so in the future. There is now ample evidence that green and ethical options can deliver excellent performance. Investors and savers can also choose from a wide range of products, including ones for cautious risk profiles."

There is already evidence that investing ethically is on the rise - according to figures from the Investment Management Association (IMA), net retail sales of ethical funds totalled £74 million in the last quarter, above the average of £64 million for the past four quarters. Gone are the days when investing ethically meant compromising on returns - there is now such a wide range of 'green' products in the market that a well-managed ethical portfolio can match or even outperform other investments.
Ask a question about investments on the SimplyFinance website and have it answered by a professional adviser. Alternatively, you can visit Your Ethical Money for an overview of the green credentials of a wide range of UK financial products.

What the 2010 Spending Review means for Workers and Pensioners

2010-10-20T23:00:00Z

This year's Spending Review has been overshadowed by the current Budget deficit - the result of public spending exceeding the Government's income over a number of years. The four-year budget for the country's public services now has to include measures for paying down the huge level of Government debt, and as such, cuts have been announced to many Government departments. These cuts will amount to an average of 19% reduction in departments' budgets over the next four years. Here we outline the key points of the Spending Review relating to work and pensions, and examine how the budgetary changes may affect you. Further themes (transport, education and local community) are discussed in a separate article.

Employment

One of the consequences of the Government's cost-cutting measures is the expected loss of around 490,000 public sector jobs over the next 4 years. Both positive and negative outcomes have been predicted by industry analysts. However it remains to be seen whether the resurgent private sector will create compensatory jobs (the Office for Budget Responsibility has estimated a total of 1.5million new positions opening up over the same period), and whether an equivalent 500,000 roles in the private sector will fall victim to the cuts (as predicted by the chief economist at PriceWaterhouseCoopers), and which outcome will form the main legacy of these cuts.

For those currently working in the Armed Forces, there will be similar upheaval. Cuts in the Defence budget could result in around 42,000 people losing their jobs across the Army (5,000 jobs), Navy (5,000 jobs) and Air Force (7,000 jobs) and in related administration fields (25,000 civilian jobs at the Ministry of Defence).

Pensions

The state pension age is going to rise to 66 for both men and women in 2020, 6 years earlier than originally planned. As women currently retire at the age of 60, the raise to the state pension age means that women will be working for an extra 6 years by 2020. The government's figures show that the Treasury will save around £30bn from the state pension and other retirement benefits between 2015 and 2025. There will be additional savings over this period from the income tax and national insurance contributions made by older workers who would otherwise have retired.

Public sector workers are likely to see their pension contributions rise by an average of 3%, which will create savings for the Treasury of £1.8bn a year by the 2014-15 tax year. In the private sector, the national pension scheme (known as the National Employment Savings Trust or NEST) is to go ahead for employees at smaller firms and those on lower incomes from 2012. This means that all eligible UK employees will be automatically enrolled in a company pension scheme, from which they would have to opt out if they do not want to be involved. There was concern about the future of NEST when the coalition government came into power, but the news that the government will push forward with the initiative has been welcomed by the pensions industry.

The 2010 Spending Review explained

2010-10-20T23:00:00Z

What is the Spending Review?

The comprehensive Spending Review is for the Treasury to allocate resources to all government departments so that they know their budgets for the next four years. The departments then have the responsibility of deciding how best to manage these available resources. Some local authority spending, social security spending and other non-departmental spending such as tax credits are also outlined. This overview of the total funds available to the government for public spending is known as the 'Spending Envelope'.

Budgets for government departments used to be set on an annual basis, but this made it very difficult to plan for changes and developments that were set to take place over a number of years. The Spending Reviews started in the late 1990s to counteract this issue. The Spending Review 2010 covers the four-year period from the 2011-2012 tax year, starting 6th April 2011, through to the end of the 2014-2015 tax year.

How does the Spending Review differ from the June Budget?

The June Budget was for the Treasury to set out the total public spending for this four-year period. The Spending Review then designates portions of this total budget to individual departments so that each area of public spending is accounted for over the next four years.

Why is the Spending Review 2010 different to past Reviews?

This year's Spending Review has been overshadowed by the current Budget deficit – the result of public spending exceeding the government's income over a number of years. The four-year budget for the country's public services now has to include measures for paying down the huge level of government debt.

This means that cuts have had to be made to the budgets of many government departments – an average reduction of 19% over the next 4 years. The departments will be responsible for managing their own budgets, and among the cost-cutting measures, it is expected that there will have to be redundancies of as many as 490,000 public servants over the next 4 years, with likely knock-on effects in the private sector.

The government will also be giving the local councils more independence over how they manage their budgets. Communities and Local Government Secretary Eric Pickles commented: "It is right that Whitehall absorbs the bigger proportion of the cuts so that council budgets and spending on vital frontline services on which we all rely can be protected. The settlement means we have had to make tough choices about how we allocate money and ensure that investment is matched by the necessary reform in order to make every pound go further and deliver the changes we need to see.

"We are continuing the programmes that support the elderly, the disabled and the vulnerable. […] At the same time, this settlement and the major reforms - to housing, planning and funding of local government - will together allow us to wrest power away from Whitehall and to end the era of inefficient regional bureaucracy as we make good on our commitment to devolve power and decision making to councils and to local communities."

What does the 2010 Spending Review mean for my Community?

2010-10-19T23:00:00Z

This article outlines the main points from this week's Spending Review with regards to councils, welfare, education and transport, and takes a look at how you and your family may be affected.

Local Community

The funding available for social housing will be reduced by 60%, meaning that social tenants will have to pay higher rents. However, with the money saved, the government plans to build 150,000 new affordable homes over the next 4 years. The government will keep to their Coalition agreement pledge to provide local councils with £650m worth of grants that will enable them to freeze council tax rates for the 2011-2012 tax year. The freeze, according to Treasury officials, would save a household in a Band D home £70 on their council tax next year.

Overall, local councils will see a 7.1% fall in their annual budgets, meaning that closures of some local council offices, as well as some local authority-run services such as libraries and leisure centres, could be imminent. However there is a welcome reprieve for those who benefit from local cultural facilities. Despite the dramatic reduction in the Culture, Media and Sport department budget (capital spending cuts of 32%, with the departmental administration costs cut by 41%), access to museums and galleries will remain free. The BBC licence fee will also be frozen for the next 6 years.

Welfare

There are an extra £7bn in welfare savings planned on top of the £11bn identified in the June Budget, including the state pension changes mentioned in the 'Work and Pensions in the Spending Review' article. Child benefit will no longer be made available to higher-rate taxpayers, in a move that will save the Treasury a total of £2.5bn per year, more than double their original estimate. The maximum savings award on pension credits is to be frozen for four years. There will be an increased working hours threshold on working tax credits for couples with children, and a total benefits cap per UK household is also planned.

A new 12-month time limit will be placed on the Employment and Support Allowance currently claimed by around 1m people. This allowance pays up to £97 per week to those unable to work due to ill health or disability, and reducing these payments to one year would save the Treasury £2bn by 2014. After that 12-month period, claimants still searching for employment would be moved onto Jobseekers Allowance instead, an estimated reduction in benefits of £30 per week. Those still unable to work would be given a proportion of the old benefit on a means-tested basis. The government is largely leaving the benefits available to pensioners untouched. The winter fuel allowance, free bus passes and eye tests for the over-60s and TV licences for over-75s are all being protected.

Education

As part of a "fairness premium", 15 hours per week of free care and education will be available for all disadvantaged 2 year olds, and the existing weekly 15 hours for 3-4 year olds will be maintained. Direct funding to schools in England is to be protected amidst the cuts in other areas, with the total budget rising from £35bn to £39bn over the next 4 years. Spending on the actual infrastructure of schools will fall 60% however, as the government has scrapped Labour's Building Schools for the Future plan.

The means-tested Education Maintenance Allowance, which gives disadvantaged teenagers £30 a week to as an incentive for remaining in full-time education beyond the age of 16, will be scrapped, apparently with a view to replacing it with more "targeted support". The pupil premium, giving schools more money for teaching children from deprived backgrounds, will rise to £2.5bn by 2014.
The 'Train to Gain' programme is to be axed. The university teaching budget will fall by 40%, and the further education budget will be cut by a total of 25%. The government does however plan to increase the funding for apprenticeships by 50%, leading to the recruitment of 75,000 new apprentices each year by 2014.

Transport

Commuters will face a rise in the cost of getting to and from work, as the regulated cap on rail fares will rise to 3% above inflation from 2012 for the following three years. This could mean an additional £600 or more on the cost of an annual rail ticket. The government has however set aside a total of £30bn for 'capital spending' (on public infrastructure) with projects including a revamp of the Tyne and Wear Metro and the Tees Valley bus network, and the construction of the London Crossrail planned for the years ahead.

Reaction to Government's Proposed Child Benefit Cuts

2010-10-06T23:00:00Z

Chancellor of the Exchequer George Osborne's announcement that child benefits will be only paid out to lower-rate taxpayers has, unsurprisingly, proved to be a controversial one. The government plans to cease paying out child benefits to individuals earning 43,875 GBP or more (37,400 GBP in income plus the standard personal allowance of 6,475 GBP) from 2013. The cuts would not affect those with working tax credits, war widows' pensions or those on disability living allowance.

The UK child benefit support for families is 20.30 GBP per week for a single child, and 13.40 GBP per week for each additional child, until each child turns 16 (or 19 if they are in full-time education). The money is paid monthly (weekly in certain circumstances) directly into the claimant's bank or building society account. HM Revenue&Customs figures show that 96-96% of eligible households currently claim child benefit.

The main argument being made against the decision is that households with just one breadwinner, with a salary taxed at the higher rate (40% or 50%) will be unfairly penalised against households with two people earning less than the higher-rate income threshold (taxed at 22%). Under the proposed changes, a household where two people individually earn less than 44,000 GBP per year would still be eligible to receive the benefits, whilst a household where just one person earns over 44,000 GBP would have their child benefits withdrawn.

The Treasury claims that around15% of families will lose out on child benefit payments, equating to around UK 1.2m families, whilst 6.6m families will remain unaffected. David Cameron defended the proposal, saying that by linking the eligibility to household income rather than individual earnings.

Alison Garnham, chief executive of the Child Poverty Action Group said: "The child benefit cut is a tax on children. Families are right to ask why it is just parents taking this hit rather than all taxpayers. It is the destruction of a one nation system that unites all parents under a shared national belief in childhood and the support and recognition it deserves from our government."

"For decades it has meant families who suddenly lose their financial security, have a life raft to carry them through the weeks before means-tested support arrives. [...] The principle of the wealthiest paying more is sound. But, most wealthy households are immune from this measure. It is the same as a basic tax rise of almost 5p for the typical family just above the higher earnings threshold. A 1p tax increase on high earnings for all wealthy people would save the same amount without the unfairness."

Speaking to Sky News on Tuesday, David Cameron defended his Government decision of ending child benefit said: "As we pay down the deficit we have to ask better-off families, those with the broadest backs, to bear a fair share of the burden."

"Saying that it is not right to go on paying a billion pounds of child benefits to families where there is a top-rate taxpayer, that seems to me a very important statement about fairness." He also stated "It's a big decision for us, but we think it's absolutely necessary and fair, given the financial situation we face."

Cardiff is the UK's Cheapest Retirement City

2010-10-05T23:00:00Z

A recent piece of research by retirement income specialist MGM Advantage looks at the relative cost of retiring in major UK cities, and also compares the average life expectancy of someone retiring at 65 in each of these cities in 2010.   London tops the charts, with retirees needing an estimated average annual income of 34,855.30 GBP to live in the capital. London also had the highest life expectancy - 21 years from the time of retirement - considerably higher than Glasgow, which had the lowest with 17.4 years.

Southampton emerged as the second most expensive city in which to retire, with a nest egg here needing to produce an average of 32, 705.03 GBP a year to fund a reasonable standard of living. The average life expectancy in Southampton was found to be 20.6 years following retirement at 65. Cardiff came out as the cheapest place to retire, requiring an annual income of 25,916.27 GBP, almost 9,000 GBP less a year than would be needed to live in London. Hull and Bradford were the next cheapest, with 26,206.05 GBP and 26,241.77 GBP of annual income required respectively.

MGM Advantage cites a number of causes for concern in these figures, the first being that retirement income levels are falling due to a widespread switch from defined benefit to defined contribution pension schemes. Defined benefit schemes are those where the returns are clearly outlined at the point where an employee joins the scheme, so that the eventual benefits are not dependent on market factors and the pension holder knows what they can expect when the pension reaches maturity.

If there is a deficit in the defined benefit scheme, the responsibility rests with the employer to make this up, provided that the employee has met the contribution requirements.   In a defined contribution scheme, the employee's contributions are entered into an investment fund where the returns are dependent on a variety of factors, including the annuity rates at the point of purchase, the charges of the pension provider and the size of the employee's contribution.   The shift from defined benefit to defined contribution schemes has been largely due to cost-cutting on the part of recession-hit employers.

Other issues affecting the future wellbeing of retirees include regulatory changes and an increased life expectancy after retirement. Aston Goodey, sales and marketing director, MGM Advantage comments: "Retirement should consist of some of the happiest days of your life, but for many, financial constraints can lead to stress and frustration because they can't afford to do some of the things they want to do. "

"We estimate that in the next five to ten years, 135 billion GBP of pension funds will mature and those people who own this need to make sure that they maximise its potential.    This includes shopping around for the best annuity for them as this could increase their income by over 30%. They should also consider an asset backed annuity, which gives people the potential to receive a greater income than through a conventional annuity."

Find a great annuity rate today.

How Our Financial Ignorance is Costing Us Millions

2010-09-29T23:00:00Z

Shocking new research from uSwitch.com shows that on average, Britons do not become knowledgeable about personal finance until the age of 27. 16% of those surveyed said that they did not get fully up to speed until the age of 35, and almost 9% claimed to be in their forties by the time they fully understood the financial products and services available in the market.

When respondents to the survey were asked whether they felt that we are financially educated as a nation, only 7% replied in the affirmative. 40% said that we are less money savvy than previous generations, and 70% felt that personal finance is now a lot more complicated than it used to be.

So are we less well prepared to manage our money now than in the past, or is personal finance just more complicated now than ever before? Whether one or both of these factors are responsible, it's clear that the UK population is feeling the effects. New figures from the debt charity, Consumer Credit Counselling Service (CCCS) show that 110,174 people in the UK are now enrolled in debt management programmes through the charity, a 12% increase on the previous year.

So how are Britons learning about money? 81% pick up their personal finance knowledge 'along the way', relying on trial and error to make the right decisions about their finances. A tiny 4% of respondents learned about money matters from banks, while just 3% more people received a financial education from their parents.

As well as revealing our current shortcomings in managing our purse strings, the research highlights a widespread anxiety about the longer-term effects on the country's future. 95% of respondents agreed that personal finance should be taught in schools, and 89% stated that it was wrong of the government to postpone plans to add money matters to the school curriculum.

As credit cards, personal loans and other financial products are available to consumers aged 18 and above, the gap between financial knowledge and credit availability clearly needs addressing. At the last count, our collective lack of financial education has cost us nearly 250 million GBP in charges and penalties alone, through exceeding overdraft limits, missing repayment deadlines and other personal finance deadly sins. 24% of those charged said that they did not fully understand the terms and conditions of the product.

Ann Robinson, Director of Consumer policy at uSwitch.com says: "Our poor understanding of personal finance is costing us money and now looks to be getting worse with each generation. While our debt is increasing, our knowledge is decreasing - the situation is a ticking time bomb. It's also vital that those who are beyond school age stay on top of this. "

"Taking the time to understand any personal finance product you are signing up to will save you money on interest rates and charges that can catch out the un-savvy consumer. By doing this and keeping an eye on your credit rating, you'll also be better placed to get the best deals on the market on your credit cards and bank account - which could save you over 400 GBP a year."

Click here for the 'Easy Guide to Reading your Credit Card Statement' and avoid those charges.

The Only Time When Smoking Pays

2010-09-29T23:00:00Z

If the smoking ban and continued tutting from insurance providers, friends and family have not persuaded you to kick the habit yet, you'll be pleased to hear that there is at least one financial product where being a smoker will not seriously work against you. When you're purchasing an annuity, declaring any incidences of ill health, an ongoing medical condition or a smoking habit could actually net you thousands of pounds of extra income.

An annuity is a taxable income paid to you for the rest of your life by an insurance company, in return for your pension savings. It is currently compulsory to purchase an annuity by the age of 75, although these rules will shortly be changing. The annuity rate that you are quoted (that is, the amount that the provider offers to pay you each year for the rest of your life) will be based on the standard life expectancy for someone of your age. When you are approaching retirement, your pension provider will get in touch with a quote. Read on before accepting it, and you could potentially increase this annual figure by up to 30%.

According to figures released by finance website fairinvestment.co.uk, an estimated 60% of pension holders will accept the first quote from their pension provider. This is a mistake for two reasons. Firstly, because you have a legal right to exercise what is known as the Open Market Option (OMO) when buying an annuity, meaning that you can go to any annuity provider in the market for a quote. Pension providers have no good reason for telling their customers this, so the OMO is not widely used. Make sure that you shop around for the best deal before committing to anything - after all, you can only buy annuity once, and the decision you make will affect your income for the rest of your life.

Secondly, if you are approaching retirement and your pension provider has quoted you for purchasing their annuity, it's likely that they do so without asking you for details about your health. It is therefore up to you to disclose information about any health or lifestyle issues that may affect your life expectancy. "If you smoke, suffer any medical conditions or take any prescribed medication you could get enhanced annuities," explains George Ladds, head of investment and pension research at Fair Investment Company, "but most pension providers do not make this clear, meaning pensioners could be losing out on thousands of pounds."

"Many pensioners are unaware they can get better rates by shopping around, but even more are unaware that declaring health issues or lifestyle conditions could improve their quotes even further, Ladds continues. "Almost 40 per cent of all completed annuities could be enhanced in some way due to lifestyle or medical conditions. This is because the insurance companies will be able to quote higher based on the assumption that they will not have to pay out for as long to an 'unhealthy' person as they would do on someone with no health issues."

So what qualifies you for an enhanced annuity? Anything from high blood pressure or cholesterol to conditions such as diabetes or multiple sclerosis. Lifestyle factors such as being overweight or smoking make you eligible for an increased annuity, as does a history of strokes or cancer, even if you are now in good health. The point of an enhanced annuity is to give you more of your money earlier if your life expectancy is shorter than average, so make the most of this option by shopping around and being upfront with insurers about your medical history.

Get annuity quotes today and find the best deal for you.

Want a more Cost-Effective Way to Give to Charity?

2010-09-23T23:00:00Z

The amount that Britons have donated to charity directly from their gross pay has doubled over the last decade, according to figures published this week. The report by the Charities Aid Foundation shows that 81 million GBP was donated to charities through the 'Give As You Earn' scheme last year, compared with 31 million GBP in the 1999/2000 tax year.

The Give As You Earn scheme, administrated by the Charities Aid Foundation, is a payroll giving initiative whereby you can donate money tax-free to a charity of your choice through your company. The money is taken from your gross pay, meaning that the donation costs you less overall than it would if you were to make it independently. Last year, 20,600 charities received donations from UK employees at 3,000 companies via this scheme.

So how does it work? You can make donations to multiple charities through the scheme, and can donate as much or as little as you like. If your employer is already a part of the Give As You Earn scheme, all you have to do is let your payroll department know that you wish to be involved and tell them how much you want to donate and to which charities.

If your employer is not yet signed up to the scheme but you and your colleagues are keen to participate, you can ask the relevant member of staff to contact the Charities Aid Foundation on 03000 123 000 or via the website at www.cafonline.org. The company is eligible to join as long as the employees' pay or pension is taxed through PAYE. The Foundation will then help your company to get the scheme set up.

As an additional benefit to the charity, your donation goes directly into their account. This reduces the charity's administration costs - and fundraising expenses - thereby ensuring that more of the money is available for good causes. It is also possible for your employer to match the donations that you and your colleagues give, which would be tax-free for the company and therefore a cost-efficient way to further increase the value of your gift.

John Low Chief Executive of the Charities Aid Foundation said; "Give As You Earn is one of the best ways to give to charity because every time a basic rate taxpayer gives 10 GBP to charity in this way it only costs them 8 GBP. This regular source of income is vital for charities because it enables them to make plans. Only 44% of UK employees on a payroll have access to such a scheme. It would be great for charities and those dependent upon them if all companies offered payroll giving."

Britons Over-Estimate Their Balance by £70.73

2010-09-20T23:00:00Z

New research from Barclays shows that Britons over-estimate their bank balance by an average of 70.73 GBP, which can lead to some nasty shocks at the end of the month. In total, the study found that almost three-quarters of UK adults think they have more money in their accounts than they actually do.

Londoners are the most out of touch with their true financial situation, with an average balance over-estimation of 91.62 GBP. Other top culprits are in Leicester, where consumers imagine that their balances are 90.10 GBP higher than they actually are and Norwich, with an average over-estimation of 89.37 GBP.

The Barclays research shows that 84% of bank customers who use mobile phone banking have a more accurate idea of the state of their finances. Of this number, almost half found the increased access to their account to be the crucial factor in this improved financial management.

If you check your current account balance online, how often do you log on? The average bank customer checks their balance four times a month, with the Internet being the preferred method of access. Thursday morning at 9:49am is apparently the most popular time to check an account, perhaps as Britons gauge how much they have for the forthcoming weekend.

Unfortunately, ignorance is not always bliss, and in this case it can become rather an expensive indulgence. Not knowing how much money in your account means that you are far more likely to exceed your agreed overdraft limit by the end of the month, leading to a bank charge. In addition to this, if you have any direct debits or standing orders that cannot be paid due to the lack of funds, you may be liable to an additional fine.

If your bank offers online banking, consider getting set up to access your account online. Alternatively if you prefer remaining offline, make sure you check your balance at least once a week to keep tabs on your available cash. If you regularly overspend, go one step further and set yourself a weekly budget. Knowing that you have a spending limit from the start of the month can help you to avoid those just-been-paid indulgences that can lead to enforced belt-tightening at the end of it.

Sean Gilchrist, Barclays Digital Banking Director, said: "Being in control of your money starts with knowing how much you've got and where it is being spent. Online and telephone banking made that easier and now mobile phone banking is taking it a step further.

"Mobile phone banking is still a relatively new way of doing your banking but the number of users is growing at a phenomenal rate and simultaneously more features and functionality are being added. It's really encouraging to see the positive impact it is having on helping people stay in control of their finances in a quick, easy and convenient way."

How to be Smarter about Student Home Insurance

2010-09-20T23:00:00Z

If you're heading off to University in the next few weeks, you've probably already been advised to get home insurance to cover your laptop, phone and iPod, and any other valuables you're taking with you. However, rather than getting a new student home insurance policy to cover the several thousands of pounds (on average) of possessions, it is worth checking first whether any of your stuff is covered on your parents' home insurance policy.

Insurer NFU Mutual recommends that parents call their home insurance provider to see whether their existing policy covers goods lost, stolen or damaged outside of the family home. Paul Richardson, home insurance specialist at NFU Mutual, said: "Further education can be an expensive outlay for students and parents. Parents can help save precious pennies by checking whether their children's belongings are already covered by existing insurance on the family home.

"Once student accommodation becomes stuffed full of high-value possessions, it can often become rich pickings for criminals. This could leave uninsured students facing a hefty bill to replace stolen equipment when money is tight. Richardson concluded: "Whether student possessions are covered under a parent's policy or an individual policy, it's imperative they are fully covered. Making sure expensive or prized belongings are protected in this way will help avoid the financial impact of having to replace damaged or stolen items."

Other tips for keeping belongings safe at University include marking expensive items with an ultraviolet pen in case of theft (your name and home postcode would be the most useful marking) and taking photos of high-value items. If you're living in a student hall of residence, check whether the entry point is secure and if you have any concerns, raise them with the management staff.

Also, in the event of a break-in in a shared house or halls, your insurer is more likely to pay out on a claim if there is evidence of forced entry into the room. Therefore, get a lock fitted to the door of your room if at all possible. Also, (and this applies especially if you live on the ground floor of a building), make sure that no valuables are in view when you leave the room.

Back on the subject of home insurance, if you do need to take out separate cover at University, carry out a thorough inventory of your possessions to work out total amount of cover that you need, or 'sum insured', as it is very easy to under-estimate the total value of your possessions otherwise. Also, beware of opting for a large excess as a way of keeping down the costs on your cover. An excess is an amount that you agree to pay towards replacing or repairing goods in the event of a claim, with the remainder paid by the insurance company.

Many home insurance providers will apply a compulsory excess anyway (check your small print), and you may find that an additional, voluntary sum stops the cover from being cost-effective. As recent research from M&S Money shows, 27% of students have been burgled whilst at university, with 71% of this unfortunate group having been burgled more than once. Hopefully your university experience doesn't include a break-in, but it is better to be comprehensively covered than stuck with a huge bill for replacing your things in the event that you are a victim. Check out the home insurance comparison on this website to find some initial quotes.

Don't Let Plastic Ruin Your Budget

2010-09-09T23:00:00Z

When you're getting your weekly groceries, how do you make your payment? It seems that as cheques are becoming less and less popular, debit cards have edged their way into pole position as the nation's payment choice.

According to new research by the Payment Council, debit card usage rose 12% last year, whilst 290,000 fewer cheques were written in the second quarter of this year than the equivalent quarter last year. This is as a result of the rise in instant bank transfers, and faster, more convenient in-store payment methods.

Looking at other forms of payment, spending on credit cards was up just 3.9% on the previous period, as many consumers stuck to debit card spending. Also, the amount of cash withdrawn from cash machines during this period was 1.6 billion GBP lower than during the same period in 2009 - although notes and coins are still a long way from going the way of the cheque.

We are indeed witnessing a payment revolution, but how can we ensure that we keep a lid on our spending when we're becoming further removed from the physical cash in our bank accounts? Here are 3 top tips for keeping control of your spending in the plastic payment age.

1. It is encouraging that debit card use is rising faster than credit card spending, since at least with debit cards you are spending money that is actually yours to spend. However for one week, try sticking to cash and keeping your debit card for emergencies only. Set yourself a strict budget and withdraw only the amount you have budgeted for at the start of the week. After getting into the habit of handing over the debit card for purchases, you may be surprised by how much harder it is handing over physical cash. A weekly plastic ban is a good habit to get into, especially if you are on a tight budget.

2. Have you been living in your overdraft for a number of years? It's an easy situation to get into if you have been allowed to continue spending on your card even when you have no cash available. An interest-free overdraft is a no-risk loan, but if you are getting charged interest or your interest-free period is coming to an end, it is time to take back control of your bank account. Start paying off a small amount of your overdraft each month, and once it has been cleared, put the same amount into a savings account each month so you will actually start earning interest each month, rather than paying it out!

3. If you feel that the ease of paying by debit card is stopping you from budgeting effectively, consider a prepaid credit card instead. This way, you can top up your balance on a weekly or monthly basis and can only spend the money that is on your card. There are no expensive 'buffer zones' or unauthorised overdraft fees, because you simply cannot overspend! Top-up fees vary between card providers however, so make sure you shop around for the best deal on your prepaid card.

What Would You Give Up For Your Pet?

2010-09-08T23:00:00Z

It is a well-known fact that Britons are a nation of animal lovers. However, it seems that we would really go the extra mile to safeguard the wellbeing of our furry friends, according to a new survey from Tesco Pet Insurance.

When asked the question, 'If your pet required expensive veterinary treatment, which of the following would you consider in order to pay for it?', almost a third of respondents (29%) said that they would forego their annual holiday in order to ensure that the treatment could proceed. 24% replied that they would be prepared to borrow the money and go into debt, whilst 24% would ask a friend or family member for a loan.

Interestingly, 7% of pet owners would cancel their own health insurance in order to pay the cost of their animal's medical treatment, and 21% would cancel their gym membership to meet the payments. The largest percentage share went to the lifestyle options, 'cutting back on going out' and 'giving up drinking/smoking/eating chocolate', with 47% and 34% of respondents happy to consider to rescue a beloved pet. Only 8% of those surveyed would contemplate having their pet put down if the costs of treatment were high.

GMTV vet Dr Scott Miller said: "For many people, pets are seen as members of the family. Just as a sick child can cause a parent unbelievable worry, a poorly pet can create anxiety and concern for owners, both emotionally and financially.

"While giving your pet love and attention is important, it is essential that their health and wellbeing are carefully monitored. Regular trips to the vet will ensure that any issues or illnesses are spotted early and can prevent costly bills in the event of major treatment being required."

Julie Hopes, General Insurance Director at Tesco Bank said "Ensuring that your pet has access to any veterinary treatment it may require, can provide peace of mind and it needn't cost the earth." There is a whole range of pet insurance options available in the market to suit your pet's situation. For example, you can find pet insurance where the annual premium does not increase with the animal's age.

If you find a better deal and are planning to switch your pet's cover, make sure there is no gap in the insurance between providers - as neither one would cover your pet if anything happened during that period. Get a great deal on your pet insurance, and you won't have to give anything up to keep your pet healthy and happy.

Don't Keep Your Bank in the Dark

2010-09-02T23:00:00Z

If you recently experienced a change in your financial circumstances, did you choose to contact your mortgage, account or credit card providers? New research commissioned by credit reference agency Callcredit suggests that most of us would decide to keep the news to ourselves, possibly to our detriment.

The study shows that only 30% of people would inform their bank or building society if they found themselves in financial difficulties, leaving 70% who would choose to keep financial service providers in the dark.

The research also reveals that 65% of British adults have experienced some degree of change to their financial situation over the past two years, and that those with children have been particularly affected. 24% of respondents who had experienced difficulties in their finances saw their income suffer: with 6% having to take a pay cut, 9% having their working hours cut shorter and 9% losing their job.

But how many of these respondents actually sought help with debt? A surprisingly small 8% of people contacted their bank or building society straight away when they received the news. However, it took an average of two months for people to break the news to their banks, and even then, 8% of these bank customers admitted to not being entirely honest about their situation.

Only a further 8% of people contacted the Citizens Advice or a debt charity when they realised that their financial situation was taking a turn for the worse. The problem with keeping quiet when you could be at risk of financial difficulty is that your bank, in its capacity as mortgage lender, credit card provider or current account provider, cannot offer any support.

"These figures are extremely worrying," said Graham Lund, Managing Director of Callcredit. "What's particularly concerning is the number of people who fail to make their bank aware of sudden changes in their financial situation - and those that do get in touch aren't always completely honest.

It's therefore extremely important that financial service providers use information and tools available to proactively monitor any changes in their consumers' financial situation and have sight of the bigger picture."

If you are experiencing financial difficulty, consider calling your bank and making them aware of the situation. If you give them early warning, they might be able to offer you a lower rate of interest on your credit card debt, a more realistic repayment plan for your mortgage or a more suitable current account. Be as open as you can, as they may well be able to offer you advice and support to help you overcome the difficulty.

By alerting your bank or building society to potential issues, you might also be able to prevent damage to your credit rating, something that will benefit you when it comes to taking out loans or other forms of credit in the future. If you want to check your current credit rating, you can call one of the UK's credit reference agencies, Callcredit Information Group (0113 244 1555), Equifax (01274 759759) or Experian (0115 9356700). This should only cost you a few pounds.

If you would like to talk to a debt specialist about financial issues that you are having, simply fill out our short debt management form and an advisor will contact you quickly and confidentially.

How to Boost Your Retirement Income

2010-09-01T23:00:00Z

New research from data provider Moneyfacts shows that annuity rates have been steadily dropping over the summer months, and are now at an all-time low.

The figures, released by Investment Life and Pensions Moneyfacts, show that the average rate for a female aged 65 has decreased by 5.6% in the past 12 months. The equivalent product for a 65 year-old man has decreased by 6.3% over the same period.

These figures relate to a 'level without guarantee' annuity purchased for 10,000 GBP, which means that the income from the annuity would remain the same for the rest of the annuity holder's life, regardless of inflation.

Although this is in itself a significant reduction, Moneyfacts highlights the fact that the average male annuity rate has dropped by a staggering 45.5% over the last 15 years, with female rates having decreased by 41.8% over this time. As we're all living longer, this trend is likely to continue.

"With every passing month the outlook for those approaching retirement appears bleaker," commented Richard Eagling, Editor of Investment Life&Pensions Moneyfacts. "There has been a spate of annuity re-prices over the summer months which has unfortunately left rates at record lows. In a few months time the first baby boomers will hit retirement.

"Often perceived as the lucky generation, they are likely to face a rude awakening when they come to secure their retirement income via an annuity. With gilt yields still low and life expectancy increasing we can expect annuity rates to fall further still. Tomorrow's pensioners face a desperate battle to secure a comfortable retirement."

Although the outlook is therefore rather gloomy for those imminently approaching retirement, there is a way of ensuring that you get the best possible deal on your annuity. This is quite simple: don't go ahead with the deal that you're offered by your pension provider before you have looked around to see if your deal can be improved upon elsewhere. You'll start receiving information from your pension provider in the months before your retirement, but put it to one side until you have had a chance to shop around and make an informed decision.

Legally, every pension holder has an 'open market option', which means that they have the right to find an annuity from any UK provider, not just the one that provides their pension. Many consumers do not exercise this right, meaning that they may be losing out on hundreds of pounds of income each year after retirement.

As any savvy consumer knows, annuities are one of many financial products where it pays to shop around. However, whereas you can easily switch your car insurance elsewhere the year after making a bad decision, you cannot change your mind once you have bought an annuity. Therefore, it's so important to take the time to compare the different annuity rates and types, seek professional advice and make the right decision for your retirement needs.

London Named Most Cost-Effective UK City for Students

2010-08-18T23:00:00Z

If you have recently experienced London prices, you might be a little taken aback to hear that the capital has recently come top in a 'most cost-effective city' poll. However if you are a student planning on working part-time, London could well be the place to study, as your earnings are likely to go much further here than in other cities.

These results, taken from Natwest's annual Student Living Index, also show that for the second year running, York works out as the least cost-effective UK city in which to study. The research looks at essential weekly expenses such as rent, bills and general living costs in conjunction with the average weekly earnings for part-time work. The most cost-effective cities are those in which an average student's earnings will go the furthest.

Unfortunately for students based in Dundee, the second most cost-effective city on the list, working the hardest does not necessarily yield the best results (hopefully not a life lesson that will carry over into the studies themselves). Dundee students work almost 16 hours per week on average, but London students pip them to the post due to the higher average wages - 5,024 GBP per year compared to 3,775.20 GBP per year in Dundee. Students at Southampton University work the least hours, putting in 11 hours per week on average.

Working to meet the rising living costs is undoubtedly the chief concern among UK students, especially since 28% of those surveyed are receiving less financial help from their parents as a result of the recession and 46% are receiving no parental financial support at all.

However, the economic climate is affecting more than just the Bank of Mum and Dad. The increased competition for graduate jobs has led to 76% of respondents seeking to improve their future career prospects through internships and foregoing the summer backpacking in exchange for holiday jobs that will look good on the CV. As a sign that career expectations have had to adapt to reflect the times, only 48% of those surveyed expect to have the job they are hoping for a year after graduating.

Tom Adamson, Head of NatWest Student Banking, said: "The results from this year's NatWest Student Living Index clearly show that savvy students are keeping their finances in check. As well as being resourceful when it comes to taking on more part-time work, more students are working over the summer to bring in extra money rather than travelling."

Oliver Levy, undergraduate at Brunel University, said "I am really surprised but as I am a student here it is good to hear. Like many London students, I work during term time as well as over the summer to bring in some extra cash, and this, coupled with keeping a close eye on my finances helps me to enjoy a good lifestyle and keep debt to a minimum."

You can find more information about the report here. If you're looking to start your search for a student bank account, check out the 2010 NatWest student account here. You can find out more about finding the best student bank account on the SimplyFinance website.

Bargain Hunters Spend More Than Those Paying Full Price

2010-08-17T23:00:00Z

Although bargain-hunting consumers will save money on a per-item basis, new research reveals that they are prepared to spend considerably more overall than shoppers who pay the ticket price.

The study, carried out by online payment service PayPal, separates shoppers out into behavioural types. The 'uncut' shopper is classified as one who 'rarely, if ever looks for a discount and usually pays full price'. At the other end of the spectrum sits the 'cut throat' shopper who 'obsessively looks for a bargain and uses every tool at their disposal from voucher codes to haggling'.

Of course, in these straitened times, more and more of us are turning to discounts and voucher codes to combat the rising cost of everyday living. It will not therefore come as a huge shock that 37% of UK consumers fall into the 'cut throat' or 'cut price' (the next level down) categories.

Something however that is more surprising is that the average online spend for a 'cut throat' shopper over the past six months has been a massive 823 GBP greater than that of an 'uncut' shopper. The average shopper ('Mid Range': 'showing average price sensitivity and dedication to identifying or securing savings') has spent 2,109 GBP in the past six months, whilst an 'uncut' shopper's and a cut throat shopper's total online spend have totalled 1,670 GBP and 2,493 GBP respectively.

So who are these bargain-conscious big spenders? Women seem to be the most concerned about finding a good deal, with 93% of female respondents claiming to keep a lookout for the best deals, compared to just 84% of men. The 25-44 year old age group is the most 'cut throat' in their spending habits, whilst the over 65s are the most happy to pay the going rate for their purchases - 43% of this group pursue a bargain 'rarely if ever' or 'will usually pay full price'.

People in Wales and the South West of England are the most likely to have their eye on the price (with 41% labeling themselves as 'cut throat' or 'cut price'), whilst Londoners and those in the West Midlands are the least concerned about getting a bargain (with 13% of respondents from these areas classified as 'uncut').

Cameron McLean, General Manager, Merchant Services, at PayPal UK, said: "Our research shows that online bargain hunters are often the biggest spenders. That's good news for retailers, as they recognise that lower prices can be good for business. But it's also great for a new generation of shoppers who expect to get better value for money."

Author and Personal finance journalist Sue Hayward, who contributed to the report, comments: "I think most people are looking to make their money go further rather than cutting back. If you have a budget of 300 GBP and you can get a washing machine 50 GBP cheaper online, most people will trade up and get a better quality model online or via a department store or clearance website, rather than pocket the saving."

If you don't like paying over the odds on your household essentials, click to visit our Budgeting and Switching sections. Here you will find phone, TV, broadband and utilities comparisons, helpful guides and top tips for spending less.

Were you mis-sold Payment Protection Insurance?

2010-08-09T23:00:00Z

Following an extensive review of the Payment Protection Insurance (PPI) market several years ago, it came to light that thousands of consumers have been unfairly sold this cover when taking out other financial products such as personal loans, credit cards or store cards. The Financial Services Authority (FSA), the regulatory body governing the financial services industry, carried out the review.

As a result of their findings, the FSA took action against 24 firms and individuals for unfair sales practices, resulting in almost 13 million GBP in fines. Since the investigation, any consumer suspecting that they may have been mis-sold PPI has been urged to seek compensation. We take a look at Payment Protection Insurance, the FSA's plans for cleaning up the industry, and what you can do if you feel you may have been a victim of mis-selling.

What is Payment Protection Insurance?

Payment protection insurance (PPI) is not in itself a bad or harmful product, and can in fact offer valuable against financial difficulties in the event of unforeseen circumstances. PPI (also often known as 'loan protection insurance') is designed to help you to meet the repayments on your loan or card should you unexpectedly lose your income through redundancy, illness or injury. The exact policy details vary from provider to provider, but essentially the insurance would cover the costs of your monthly repayments over a given time period.

If you do decide that you want to take out this type of insurance, you are under no obligation to buy it from your loan or card provider. Indeed, if you choose to take out your insurance as part of a package with the product itself, it's highly likely that you'll be paying over the odds for it. Simply look up loan protection insurance or credit card insurance online in order to see how much you could be saving by choosing a separate provider.

In what circumstances might PPI have been mis-sold?

Payment Protection Insurance is deemed to have been mis-sold if:

* You were never eligible to make a claim. There are a number of exclusions on a typical Payment Protection Insurance policy (for example, preventing claims where the loss of income was caused by a pre-existing medical condition), so you should have been asked the appropriate questions before taking the policy out to determine whether the cover was actually suitable for your circumstances.

* You didn't realise that the cover was optional.

* You didn't realise you were taking out the cover, or were not completely sure what it involved.

* You were not informed that that you would also have to pay interest on the insurance cost, as well as paying interest on the loan or card debt. You should have also been warned that your PPI policy may expire before the end of the loan term (many PPI policies only last 5 years) but that you'll still need to pay interest on the premium.

What to do if you have been mis-sold PPI

If you have PPI and either did not want it in the first place or do not now feel it is necessary, you should be able to cancel the insurance. Check the policy document to verify that this is the case. If you want to make a complaint, you should write to the insurance provider in the first instance and explain to them why you feel that you were unfairly sold the cover. If your claim is rejected, you can approach the Financial Ombudsman Service (www.financial-ombudsman.org.uk).

The future of PPI

Since the initial review, the FSA has introduced a series of new measures defining how PPI should be sold in the future, laid out in a handbook for financial advisors. Although these reforms have to be in place by 1 December 2010, the Financial Services Consumer Panel has urged those selling PPI to start adhering to the guidelines as soon as possible, rather than waiting for December.

Kay Blair, Vice Chairman of the Financial Services Consumer Panel said: "Consumers deserve to get an early Christmas present from firms and should not have to wait until the new 1 December deadline. The financial services industry has been dragging its feet over resolving PPI mis-selling and letting down customers by not handling their complaints fairly. Consumers with rejected PPI complaints should consider taking them to the Financial Ombudsman Service, where 81% of complaints are currently being upheld."

Retirees Feeling the Psychological Strain

2010-08-08T23:00:00Z

What worries you most about the thought of retiring? New research from insurer and investment company Scottish Widows reveals that although financial security is the greatest worry, it is only one of numerous concerns felt by current and future retirees.

The survey respondents were split into people who have already retired and people in their fifties who have yet to retire. Perhaps predictably, given the recent economic upheaval, 'Not having enough money to enjoy retirement to the full' came top of the list for both groups, with 30% and 56% of the votes respectively.

However, the psychological impact of leaving work was also evident, with 'Missing the sense of structure in life that comes with working', 'Not wanting to stop working' and 'Finding the change from working to retirement very sudden' being cited as the second, fourth and sixth biggest challenges in both groups.

The survey also looked at the effects of retiring on men and women, and found that the transition from work to retirement was felt more keenly by retired men (29%) than women (24%). However, many soon-to-be-retired respondents may be worrying unnecessarily, as when the concerns were compared with the experiences of the newly retired, 43% of fifty-somethings expected the transition to be worse than it actually was.

Alison Morris, savings expert at Scottish Widows said: "It is not just the financial shift that people have to prepare for when they retire, but the lifestyle change that comes with it. Many people want to take it easy and enjoy the free time they have when they retire, but it is important to understand that retirement can be one of life's most significant transitions so careful planning is crucial for your well-being. "

"A way to help alleviate the financial stresses that over half (56%) of over 50's expect to face when they retire is to make sure they have adequate savings to enjoy retirement to the full. Scottish Widows recommends that you save at least 12% of your salary from age 30 to retirement age to ensure you have an adequate income in retirement."

You can find advice about choosing a pension plan and annuity, and also about choosing savings and investment products, all on the Simply Finance website. Further advice from Scottish Widows on effective saving and investment, and also on preparing for retirement, can be found at www.YourLittleBookOfMoney.com.

Would You Lie to Drive Down Your Car Insurance Costs?

2010-08-05T23:00:00Z

New research shows that almost a third of women and half of men may have 'bent the truth' in their car insurance application to get cheaper cover.

The study, carried out by comparison site confused.com, reveals that a total of 38% of UK drivers have lied in order to lower the cost of their premium, and of this number, 65% are now scared that their fibs will invalidate their cover. This report follows the news that insurance costs have risen by an astonishing 31% in the past year, and indeed, 71% of those who lied did so in order to save money.

So what sort of porkies are UK drivers telling? Underestimating the annual mileage driven in the car comes top, with 14% of respondents admitting to this. 8% underestimated the value of their car, and 5% of those surveyed admitted to adding a driver onto the policy who is never likely to actually drive the insured car.

This is a common tactic among younger or more inexperienced drivers, usually involving the younger driver taking out the insurance in a parent's name and then becoming a named driver on the policy themselves. Unfortunately for this 5%, insurers are now wise to the trick and drivers could see their insurance cover voided if they are found out.

Will Thomas, head of motor says "When it comes to motor insurance, lying really doesn't pay. By failing to tell the insurance provider your true circumstances you are risking invalidating your cover entirely, which ultimately means you are uninsured.

"Whilst it's easy to think you will never be caught out, insurance companies are getting savvier, particularly in these hard financial times, and lying is a type of fraud. Having your cover invalidated not only has ramifications for you and the repair of your car, but also for any other driver involved in the incident - there is no limit to the costs that may be incurred in the event of an injury."

Here are three legitimate ways of saving money on your car insurance.

Security measures - Make sure that your car is equipped with security features such as a wheel lock and functional alarm, as this will greatly reduce the chances of the car being stolen and therefore bring down the cost of your cover.

Pass Plus - This is an extra training course aimed mainly at new drivers, although anyone can take it. Designed by the Driving Standards Agency, it includes modules for motorway driving, night driving and bad weather driving and passing this could reduce your cover by up to 30%.

Get a smaller car - If you are an inexperienced driver, the costs of being insured on a large or powerful car are going to be disproportionately high. This is due to the fact that statistically, you are far more likely to be involved in an accident. Consider downgrading until you have a few years' worth of driving experience and have built up a no-claims bonus.

Find a great deal on your car insurance here.

Six Top Tips for Getting the Most out of your Student Banking

2010-08-04T23:00:00Z

In a month's time a generation of new students will be beginning their university careers, many of whom will be negotiating the tricky world of personal debt for the first time. As most students dip into their overdraft at one time or another, it's particularly important that you get the right student bank account to keep this debt within manageable levels. This means looking beyond the laptops, railcards and other flashy freebies at the freshers' fair and asking the following questions.

1. Does your bank charge you for your student account each month? If you are looking for the basic features of a student account; overdraft facilities (usually interest-free), direct debits and standing orders, and a debit card and chequebook, you should not be charged a monthly fee for using your account. If there is a fee, speak to the bank and ask them what it is that you are being charged for.

2. This leads on to Question 2: Does your student account offer you additional features, such as mobile phone insurance or breakdown cover? If so, you may be charged an additional fee for these 'benefits', either through a monthly account fee or in higher overdraft interest rates. Only keep these (and keep paying for them) if you are going to make use of them and they are genuinely saving you money. If they are not, opt instead for a free account. Make sure you read the small print before signing up to an account to make sure that there are no hidden charges.

3. How much access do you have to help and support? You should be able to speak to a representative of your bank 7 days a week. If your account has online banking enabled, you should expect to have access to your account 24/7. It is also a good idea to get to know the student banking specialist in your local branch - a friendly face makes asking for help much easier. An extra tip is to use www.saynoto0870.com before calling your bank. This website is a directory of all the local business numbers in the UK (e.g. 0207, rather than 0845), so when you're stuck on hold to your bank you can use your free minutes rather than paying the pricey premium rate fees.

4. Is there a 'buffer zone' on your overdraft limit, and if so how much will it cost you? Student accounts will often have a buffer zone, so that if you go over your overdraft limit you will still be able to take money out. On some accounts this is free but banks often charge you large daily fees for this service (considered as an 'unauthorised overdraft'). Best to keep a close eye on your balance, especially around the end of the month, and stay within your limit wherever possible.

5. What are the charges if you cannot make a cheque or direct debit payment? This leads on from the unauthorised overdraft question. If you do not have sufficient funds in your account to pay a cheque that you have written to someone or meet a direct debit payment, you will be charged for this. However some accounts charge you much more than others, and often the penalties far outweigh the actual administrative cost of dealing with your failed payment. Take the time to compare all the various fees and charges before deciding on a student account.

6. What is the interest-free overdraft limit on your account? Some banks will operate a tiered overdraft system, where they will only give you access to the highest borrowing limits in your final year. Before opening an account, work out a budget for each year of your course that takes into consideration your accommodation and tuition costs, a basic living allowance (for food, travel and clothes) and your (approximate) income over this period. This should help you to work out what overdraft you would need, although it's important to plan for paying your overdraft off before the interest-free period ends. As a final consideration, look for a bank that gives you an interest-free period lasting several years after you graduate, so you have time to sort out a steady income.

Click here to start your student account search.

8 Finance Websites that Make the World a Friendlier Place

2010-07-27T23:00:00Z

Having witnessed the collapse of many financial giants in recent years, most of us are far more familiar with the cut-throat world of corporate finance than we really wanted to be. In this ruthless, high-risk environment it's easy to forget that money-making and money-saving can still have a social conscience and a sense of community spirit. Here are 8 innovative finance websites that will help you save money, make better financial choices and even start chatting to your neighbours.

Loans and Investments

Zopa is a lending and borrowing exchange where members of the public lend money to each other. You can set up as a lender and set your own rate of interest, the time period over which you want to lend the money and also the level of risk that you are comfortable with. For example, a 'riskier' borrower would be someone younger or with a less solid credit history. Your money is split among a number of borrowers to mitigate the risk, and if a borrower misses a payment, Zopa will follow up with them on your behalf.

If you want to borrow money through Zopa, you must first be identity-checked, credit-checked and risk-assessed. Once accepted, you are placed into one of 5 'markets' (based on your credit-worthiness), and will then be able to get quotes for the amount you wish to borrow. You can borrow any amount from 1,000 GBP to 15,000 GBP and can choose a loan term from 12-60 months. Unlike borrowing through a traditional lender, you are not charged a fee for repaying a loan early. It is worth getting a copy of your credit report before you apply, so that you can correct any problems and maximise your chance of being accepted.

Lend with Care is a pioneering lending service set up by aid charity CARE International, which helps people to directly support entrepreneurs in the developing world. The entrepreneurs provide an overview of their business and detail the reasons why they need a loan, the amount that they need to borrow and their proposed repayment schedule. Businesses currently featured on the site include hairdressers, market stalls and tailoring services, and you can choose which person's business you would like to support.

You can choose to lend anything from 15 GBP to the full amount requested, and the recipient receives 100% of the loan that they requested; no administrative charges are deducted from the entrepreneur's loan. As the entrepreneurs repay the (interest-free) loan in full through a series of installments, you are able to then reuse your investment capital to help further entrepreneurs get their businesses started up in the future. Lenders must set up a profile on the website but you can choose whether to provide personal details or to remain anonymous. So you get the opportunity to have a positive impact on someone's life and get your money back afterwards - the perfect recession-proof good deed!

If you want to ensure that your financial decisions complement your social or environmental concerns, Your Ethical Money is a useful website to point you in the right direction. Not only does the site (a not-for-profit initiative run by EIRIS) dispel the myth that an ethical investment means compromising on your financial returns, it also helps you identify the companies that suit your principles. The site is separated out into different financial product areas, including Insurance, Mortgage, Investments and ISAs, Credit Cards and Student Finance.

If you are looking for an investment product, you can see a list of funds and the areas in which they invest. This means that you can easily find a fund that, say, avoids investment in arms companies or actively chooses to invest in companies that support environmental issues. If you're looking for a mortgage or a personal loan, find out whether your lender of choice practices responsible lending, and whether they also lend to corporations whose activities you don't approve of. If you are choosing a pension, you may wish to ensure that your pension fund only supports socially responsible companies - especially since your financial involvement makes you a shareholder in those companies. Whatever your cause, make sure that you're putting your money where your mouth is.

Community vouchers

The recession has made everyone think a little more carefully about how to get the best possible value for money, and as a result, money-saving vouchers have exploded in popularity in recent years. However, a new breed of voucher sites has introduced a community element, relying on group-buying power to offer one daily 'super-deal' rather than hundreds of smaller deals. Groupon UK and Living Social are two such examples.

The first of these, Groupon, offers a daily, heavily discounted product or service to members in every UK city. Every deal is specific to the city you live in, and could be for anything from 80% off the price of a three-course meal in a nice restaurant to 60% off a haircut or spa treatment. The deal is only valid for that day, and if not enough people sign up to buy the deal it is cancelled and you pay absolutely nothing. Living Social offers much the same service but 90% of the deals do not rely on a minimum number of people buying them, so they're pretty much guaranteed. Both of these sites reward you financially for recommending deals to your friends and family, so if you're passing on the deals to other people, make sure that they purchase them up via a link that you generate in your account.

Community sharing

Do you have something that you're prepared to lend, give away or help out with? Streetbank is a community project that connects you with other people who live nearby. Recent additions to the site include the offer of composing and songwriting lessons, the loan of garden equipment and a four-man tent and someone offering travel advice for people heading out to Hong Kong. Of course, it is all much more helpful if this comes from someone who lives in your local area, so when you sign up you are asked for your postcode, as well as something that you can provide to fellow community members. Freecycle operates along similar community-focused lines, except that it is a free marketplace for items that people no longer need. If you're moving house and don't have room to take that chest of drawers or sofa, offer it for free on Freecycle and someone will come and pick it up from you.

You sign up to a group in your local area and can then see all 'Offered' and 'Wanted' notifications for that group. You can limit the notifications to a daily/weekly digest or see them as and when they come through. Absolutely everything has been offered on the groups, so it's likely that if you want something, someone else will have one lying around in their house gathering dust! Another such site is The Freeconomy Community, where you can share tools, skills or even offer unused space to charities or groups for weekly meetings. The aim of all of these community sites is to get local people talking, helping each other out and saving money. And if they make the world a slightly friendlier place at the same time, that is certainly no bad thing.

Britons Recession-Proofing Their Lifestyles

2010-07-27T23:00:00Z

Recent research from Santander shows the extent to which we have adapted our lifestyles in reaction to the recession. Over a quarter of UK consumers (27%) have switched to cheaper supermarkets and an impressive 55% have started shopping around in order to get the best deals. Some people (28%) have switched to buying second-hand goods from eBay and in charity shops to make their money go further.

It looks as though the 'little luxuries' have been sacrificed, with 12% of respondents washing their own cars rather than taking them to the car wash and 9% ditching the taxis, presumably in favour of public transport. 10% of people claimed to have stopped getting a daily caffeine fix from a coffee shop whilst a 21% have started bringing a packed lunch to work rather than buying a meal each day. You can find out the lifetime cost of your coffee habit by using our useful calculator.

Unfortunately the cutbacks are also affecting our leisure time. Further research by the Insolvency trade body R3 shows that 'staycationing' is a continuing trend, with 38% of Britons actively trying to save money on their annual holiday and 56% of those opting for a UK-based break. Holidaymakers aged 16-24 were the most inclined to watch the pennies. A quarter of the people surveyed stated that they would not be taking a holiday at all this year, as the costs were too high.

R3 Vice-President, Frances Coulson, commented: "The fact that so many people will be holidaying in the UK is good news for the domestic tourism and leisure sector which has been badly hit during the downturn. However, the fact that a quarter of respondents said that they would not be taking a holiday this year highlights the fact that, although most people have got used to having regular holidays and now see it as a human right, holidays are a luxury."

Whether we will retain these bargain-hunting habits when the recession is behind us remains to be seen. However in the meantime, foregoing a daily cappuccino should only be the starting point if you are trying to save money. Look for better deals from all your providers; on your gas and electricity and on your broadband, home phone and your cable television subscriptions. Review your current account, your credit cards and any saving and investment products that you have - you may well find that you can be earning more interest on your savings, or paying much less on the money you're borrowing, with a different provider.

5 Top Tips for Choosing a Home Phone Provider

2010-07-26T23:00:00Z

Nearly one third of us have not changed our home phone provider in over 5 years and are pouring money down the drain as a result. As we all increasingly rely on mobiles for the majority of our calls, the humble home phone is often overlooked as a key area for saving on your household bills.

Indeed, recent research by Ofcom accredited home phone, broadband and digital TV comparison service Simplifydigital.co.uk, shows that 20% of their customers save over 570 GBP per year by switching to better deals - and 10% save more than 750 GBP per year. And a large chunk of these savings come from huge reductions on home phone calls.

As a rule of thumb, if you have not reviewed your home phone calls plan in the last 18 months you are likely to be wasting money, and the third of homes who have not reviewed their home phone plans in the last 5 years are wasting big money.

Home phone costs consist of the line rental (paid monthly) and the cost of the call plan on top. There is not much variation in the cost of line rental, which varies from about 10 GBP to 11.99 GBP per month. But there are big differences in the cost of the calls between suppliers, so here are some important things to watch out for when looking for a better home phone deal.

Top 5 things for watch out for when choosing a home phone service

1. Match your household's call habits to the right call plan. For example, if you tend to make calls during the day, make sure that you are on an inclusive daytime call plan. You would be amazed at how many households have not checked to see which call plan they are on.

2. Costs to mobiles can be a killer. And costs to the 3 mobile network are especially high for some providers (e.g. Virgin Media's standard rate calls to mobiles is 18.95p per minute, relative to 30.95p per minute for calls to 3 mobile). So check the rates your provider offers.

3. Packages that come with free calls - e.g. "free evening and weekend calls" - have a fair usage policy which means that you will start getting charged for the calls after 60 minutes of conversation. The trick is to hang up and dial again.

4. Companies often charge about 1 GBP/month for paper billing and if you don't pay by direct debit you will get penalised to the tune of about 4 GBP per quarter. So opt for online billing and pay by direct debit.

5. And the biggest 'watch out' of all. If you also have a broadband or digital TV service, think about bundling your services with your home phone. People who buy their services from separate providers on average pay considerably more. TalkTalk for example offer "free" broadband with their basic home phone service and Sky offer free evening and weekend calls with their basic TV service.

To show the size of the potential home phone savings, let's take the example of a family which has not reviewed their home phone bills in a long time. They have Sky TV and regularly make calls during the day, as well as regular calls to mobiles. If this is the case, there are immediately big savings to be had by getting a call plan with inclusive daytime calls, to avoid paying through the nose during the day.

For example, BT's basic "Unlimited Weekend Plan" charges 5.9p per minute for daytime calls, so a family spending 20 minutes on the phone per day to landlines will be spending 23.60 GBP per month on national calls alone. If for example they were spending another 20 minutes per day on calls to mobiles (which BT charge at 12.5p per minute), this would add up to another 50 GBP per month, making a total of 74 GBP per month excluding line rental! If they were to switch to an anytime call plan there would be big savings, as we show below.

Sky Talk Unlimited (5 GBP per month for Sky TV customers) - This package is only available for Sky TV customers. It is very good value and gives you unlimited free national daytime calls, plus free calls to 20 international destinations including France and the US. And importantly calls to mobiles would be just 10p per minute. So instead of paying 74 GBP per month, the family would pay a total of 45 GBP per month (excluding line rental) and benefit from the free international calls - making a saving of about 29 GBP per month or 348 GBP per year.

TalkTalk UK Anytime - The TalkTalk package is another great value plan. For 5.49 GBP per month you get free daytime, evening and weekend calls. Calls to mobiles are 12p per minute and you also pay for calls to international destinations. But on this basis you would still expect to save about 258 GBP per year (21.51 GBP per month).

BT Unlimited Anytime Plan - Moving to this plan would not involve switching from BT. It costs 4.99 GBP per month (with the first 3 months free) for free daytime, evening and weekend calls. Calls to mobile cost 12.5p per minute and BT's standard international call charges apply. But by switching to this plan, the family would still save 20.30 GBP per month or 244 GBP per year. A major drawback of the BT package is that it ropes you in to a 12-month "renewable contract" which automatically gets extended to an additional twelve months, after the completion of the initial 12.

Skype - The family might also consider a Voice over Internet Protocol (VoIP) service like Skype. They offer big opportunities to save, but require a broadband connection (as the calls go over the internet). Skype offers free calls to other Skype users wherever they are in the world and also offer a package of free calls to domestic landlines anytime for 4.58 GBP per month. And unlimited calls to landlines in over 40 countries worldwide for 9.18 GBP per month.

In summary, if you have not reviewed your home phone package in a while it is definitely worth digging out the bills, checking what call plan you are on, and seeing if you can save!
We've teamed up with impartial comparison site Simplifydigital to offer you free and impartial advice to find the best deal. Simply call 0800 280 0149 or click here to compare deals online. Our experts will help you to find the best-fit package for the biggest saving.

Information correct at 27th July 2010

5 Top Tips for Choosing a Home Phone Provider

2010-07-26T23:00:00Z

Six Ways to Make a Burglar's Life Easier

2010-07-21T23:00:00Z

Surveys carried out of reformed burglars by More Than, part of the RSA Group, provide a fascinating - and rather scary - insight into how we make it far too easy for someone to break into our homes.

Below are six common mistakes that reformed burglars claim once made their jobs much easier:

Hide your keys somewhere really obvious

Like under the doormat, under the flowerpot or behind that handy brick by the door. It may mean that you lose your keys less often, but 78% of the ex-burglars surveyed said that clumsily hidden keys were the first thing they would look for when attempting a break-in.

Leave the window open

If you don't have air conditioning and it's the middle of summer, you probably don't enjoy being treated to that blast of stale, warm air when you arrive home after a day at the office. However, this is still no excuse for leaving one of your windows open when you're not in. 58% of respondents said that they would routinely gain entry to a house through an open window.

Announce on Twitter when you're going to be out

You know you're in the digital age when would-be burglars are logging on to social networking sites like facebook and twitter to find out a suitable time to rob you. 12% of former burglars said that they would check your updates to find out when you were going to be out of the house. Maybe it's time to stop announcing those weekends away online, and stick to making the people sitting next to you jealous instead.

Put a post-it note on the door for the delivery people

You know the situation. You're expecting a delivery 'between 7am and 7pm' but you have to nip to the shop. Of course, you can guarantee that in that 15-minute period, the delivery person will have been and gone. It's tempting to leave a note on the door begging them to at least call you before they hit the road. However, 62% of ex-thieves claim that 5 minutes is all they need to make a clean sweep of your house, so it is best not to take the risk.

Keep your car keys somewhere conspicuous

34% of survey respondents said that car keys are the first items that they would look for when they were inside a home, so if you have left them in a little bowl by the door, you might as well have gift-wrapped your precious motor and stuck a bow on top. It may be convenient to leave your car keys by the door, but consider hanging them off a hook inside a cupboard instead to ensure that they are less conspicuous.

Advertise your new flat-screen TV by leaving the packaging outside by the bin

If you've just bought a shiny new gadget, don't tell the entire street about it by leaving the box out on display. 20% of former burglars admitted that this is a sign that they would look for to determine whether a house was worth breaking into.

Former burglar-turned-Church minister Richard Taylor commented on the findings: "Homeowners should sit up and take note of these results, the importance of home security cannot be overlooked, yet surprisingly many homeowners fail to take even the simplest precautions to protect themselves. Basic things like being more aware, having a burglar alarm fitted and even getting a dog can act as deterrents to thieves on the hunt for an invitation."

Of course these precautions are not always enough, and in fact 90% of the respondents agreed that home burglary does not really pose a challenge in many cases. To limit the possibility of becoming a victim, make sure that you have up-to-date security, in the forms of certified locks, a burglar alarm, or even CCTV. Also, ensure that you have adequate home insurance, so that you do not have to foot the entire bill if you lose valuable possessions in a burglary. Click here to compare home insurance deals.

Is it Going To Get Even Harder for Homebuyers?

2010-07-15T23:00:00Z

As if it has not been difficult enough to obtain a mortgage over the past few years, things may be set to get even trickier for new homebuyers. The Financial Services Authority (FSA), the company that currently regulates the UK's financial services industry, has published a report outlining proposals for further tightening mortgage lending criteria.

Of course, for most of us a mortgage is the single largest financial commitment we will take on, and it stands to reason that mortgage holders should be able to comfortably meet the repayments. However, the report has met with a mixed response from the industry. Although debt charities welcome the suggestion of offering consumers increased protection, some in the mortgage market are concerned that stricter regulation will make mortgages even more expensive for homebuyers, as well as less accessible.

What does the report say?

The main aim of the FSA's report is to put forward suggestions for responsible practices in time for the next economic 'boom' period, based on the learnings from past mistakes. The three main areas covered by the report are:

Interest-only mortgages

An interest-only mortgage is one where you do not need to repay any of the actual amount borrowed until the end of the mortgage term. As the name would suggest, you would only need to repay the interest on the mortgage each month. The idea is that if you took out an interest-only mortgage, you would also have an investment portfolio in place (an endowment policy is a common complementary product) that would grow over time giving you the necessary funds to clear your mortgage at the end of the period.

According to the FSA, many homeowners count on future house price rises to provide them with the capital to repay their mortgage. Of course, this plan only works as long as house prices continue to rise. Several years ago, this gamble failed spectacularly for thousands of UK homeowners when the housing market collapsed and many people found themselves with properties worth less than the value of their outstanding mortgages (known as 'negative equity'). Recognising that interest-only mortgages are becoming increasingly popular, the FSA wants much stricter regulations on who can get accepted to avoid people getting into financial difficulties.

Self-certified and Fast-track mortgages

Self-certified (or 'self-cert') mortgages are products available to self-employed consumers, or to anyone who for different reasons has a non-standard income stream. During the last mortgage 'boom' period, the regulations on self cert mortgages were relatively lax and unscrupulous lenders started offering self-cert mortgages to anyone who was not able to get accepted elsewhere. Needless to say, some people got accepted for mortgages when they could not really afford them. Now that lending criteria are so restricted, it's much more difficult to get a mortgage without verifying your income, but the FSA would further clamp down on acceptance for this type of mortgage.

However, there is still a 'fast-track' mortgage application process. This is available only to homebuyers with an excellent credit rating and a larger house deposit. Due to the lower risk that they present to the lender, the income verification for these individuals is not quite as rigorous. In their report, the FSA is suggesting a higher level of regulation for fast-track mortgages. They accept that fast-track mortgages actually result in a lower than average level of missed mortgage payments overall, but expresses concern that the fast-track mortgage will become the new self-cert mortgage, with the more relaxed income checks being exploited by lenders looking to get new mortgage customers accepted.

How much borrowers can actually afford

The FSA have made recommendations that lenders establish a 'maximum borrowing capacity' for every consumer looking for a mortgage, based on their income, their expenditure and their disposable income. Shockingly, they found that 46% of households either had no money left, or had a shortfall after mortgage payments and essential living costs were deducted from their income each month.

The report also recommends that lenders take future interest rate rises into consideration, especially if potential borrowers are not particularly financially stable already. Customers with a lower credit rating should also apparently be on the 'high-risk' list, something which sounds reasonable considering that these would be people who have missed three or more months' worth of loan repayments, had a county court judgment (CCJ) taken out against them due to debt, or have recently been declared bankrupt.

Are borrowers experiencing 'the calm before the storm'?

The FSA suggests that the current low interest rates may be masking future problems for mortgage holders - their data indicates that people who took out a mortgage in 2007 and then remortgaged or moved to their lender's standard variable rate mortgage in 2009 or 2010 saved an average of 140 GBP on their monthly repayments. The danger is that even a modest future rise in interest rates could seriously increase the number of households struggling financially.

The report makes the point that 'when borrowers are financially stretched, they have less capacity to save, making them particularly vulnerable to unfavourable life events or income shocks in the future'. The danger is that people may take on further debt in order to meet their mortgage payments, so that affordability issues may not come to the fore until several years after the start of the mortgage term. For example, someone with a 600 GBP income shortfall a month could cover this shortfall for three years by taking out a further loan of 25,000 GBP. By the time this debt starts catching up with the borrower, they could be at serious risk of losing their home.

Are mortgages going to become more expensive?

The main concern in the mortgage industry is that if both self-cert and fast track mortgages are consigned to the history books, it will become even harder for consumers to get accepted for a mortgage. Also if mortgages for 'lower risk' consumers require stricter income checks, the danger is that the administration fees for these mortgages will go up. Mortgage organisations such as the Council of Mortgage Lenders (CML) also argue that the industry has now learned from the mistakes of the past and that increasing the regulation for mortgages is unnecessary.

Some positive feedback comes from Malcolm Hurlston, chairman of debt charity Consumer Credit Counselling Service, who comments: "Buying a home, particularly for the first time, is a huge step. It is the biggest financial decision that most people will have to make so it is important that they make the right choices. Banning self-certified mortgages, and adding increased protection for those with a history of debt problems, will help inform these decisions and prevent people from being sold a home they cannot afford."

The FSA report forms part of a wider review of the lending practices of the past, and the consultation and research will be ongoing until November. To request a callback from an experienced mortgage adviser, simply fill out our short form.

The 5 Minute Process that Could Save You Hundreds

2010-07-15T23:00:00Z

In these straitened times, you'd think that we'd be squeezing the most out of every penny. However, UK consumers are apparently spending a staggering 150 million GBP a year on credit card late payment fees, according to new research from comparison website Confused.com. This is the equivalent of throwing money down the drain, and it could all be avoided simply by setting up a direct debit to your credit card provider.

The research shows that 57.5% of credit card holders don't have a direct debit set up to pay off at least the minimum balance due on their credit card each month. They are apparently paying the price for this oversight: 26% of cardholders have been charged at least once in the past 12 months for missing payments, 8.5% have been charged 3 times or more, and 1.2% have been charged 10 times or more! At an average of 12 GBP a go, these fees are not cheap and you could be racking up hundreds of pounds of wasted income before you pay off your credit card balance.

Credit card holders over the age of 55 are the group least likely to be charged, but also interestingly those with the fewest direct debits, relying on memory to get their monthly payments made on time. The 18-24 age group is the best at setting up direct debits, with 52% having one in place. However it looks as though the remainder of this group is guilty of the most missed payments, as the average 18-24 year old was charged 0.83 times in the last 12 months. So, the message seems to be clear: if you don't trust your memory enough to guarantee you'll make your payments on time, get the payments automated and avoid those pesky fees.

A direct debit only takes a few minutes to set up and is a free service available with most current accounts. If you can afford to pay back a larger amount each month than the minimum payment, this is highly recommended to ensure that you clear the debt as quickly as possible. Another tip is to schedule the direct debit to leave your account the day after you have funds, such as your monthly salary, coming in. This way you don't have to worry about running out of money at the end of the month. Banks will charge you a fee if you have insufficient funds to make a direct debit payment, so it pays to get your timing right!

Alex Higgs, commercial analyst at Confused.com comments "Setting up a direct debit to make a minimum payment on a credit card is such a simple thing to do, yet well over half of credit card holders haven't done it. Collectively we are wasting millions of pounds each year on these charges, money which would be better spent elsewhere in these tough financial times.

"As well as late payment charges, many credit card holders are likely to have lost out on attractive introductory deals or low interest rate offers as well. These deals are often withdrawn if minimum payments aren't met, meaning more money is wasted as they are reverted onto higher rate deals. Missing minimum payments can also adversely affect customers' credit profiles, which may be detrimental when they want to borrow in the future."

Could You Manage the Country's Budget?

2010-07-08T23:00:00Z

If you have often thought that you could do a better job of managing the UK's finances, now is your chance to make a difference. The Chancellor of the Exchequer George Osborne today announced the second phase of the Spending Challenge, where members of the public can submit their ideas online for how to improve public services.

The first phase of the Spending Challenge, launched on the 24th June, opened up the floor to public sector workers, asking for their views on how the UK's public services are managed and funded. The government claim to have received almost 60,000 responses over the following two-week period.

These responses include suggestions for improving the rules governing Criminal Record Bureau (CRB) checks for NHS doctors and nurses, decreasing public sector office waste through turning off office lights at weekends, and increasing workers' freedom to choose more cost-effective goods and services. You can read some of the ideas on the Treasury website.

The thinking behind this new campaign is that the people who are actually working in and using the UK's schools, healthcare facilities, transport and other government-managed services are in the best position to comment on what is working, and what is not. It is hoped that suggestions from the UK public will identify further areas where public spending can be made more efficient, thus enabling people to contribute to tackling the country's massive deficit.

Chancellor of the Exchequer George Osborne said: "We are facing the challenge of a lifetime. [...] That's why I'm asking everyone across the country to send in their ideas. We need to tackle this huge national debt and make our economy stronger, and it's your ideas that will help us do that by improving public services and saving money."

The Spending Challenge is going to be active for submissions throughout July and August. To put forward your ideas or read ideas that have already been submitted, please visit the Spending Challenge website. You can also get in touch via the Democracy UK page on Facebook.

How long will it take to pay off your Summer Holiday?

2010-07-08T23:00:00Z

Everyone loves a summer holiday, but it seems that some of us are willing to sacrifice our financial wellbeing for a mid-year break. New research by protection specialist Bright Grey has found that UK adults plan to borrow over 12 billion GBP in total to fund their summer holidays this year, and that 10% of us will take two months or more to pay off holiday debts.

Of the UK adults surveyed, 32% are planning to borrow money in order to get away. This equates to a total of 10 million holidaymakers over the course of the summer. The borrowing will either take the form of credit card debt, a travel agent's payment plan or a loan from friends or family.

The average spend on a summer holiday is over 1,200 GBP, and over half (58%) of the respondents claimed that they do not have the money available to repay the debts straight away. If the holiday is being paid for on a credit card, this could add an additional 100 GBP of interest a month to the cost of the holiday until the debts are repaid - based on credit card borrowing at the average UK APR (annual percentage rate) of 18.7%.

Although the average summer holiday apparently takes 4.3 months to organise, there is still time to save yourself from a post-holiday debt hangover. Firstly, if you are planning to use a credit card to cover some or all of your holiday costs, try and improve on your credit card interest rate ahead of your trip.

Depending on your credit rating, you might be able to move to a card with a 0% introductory rate on purchases. If you do not qualify for one of these cards, you may still be able to move to one with a lower interest rate than you pay with your current provider. Compare credit card deals here, and remember that you should plan to pay off the debts before the end of your introductory rate to avoid hefty interest charges.

To avoid getting charged fees for credit or debit card usage abroad, and to ensure that you do not go over budget once you're away, consider loading a prepaid credit card with enough money for the trip. A prepaid card is a secure way of taking money abroad, that can be used as an alternative to travellers' cheques. Some good news if your credit rating has taken some knocks is that providers do not require credit checks.

There are other ways of avoiding unwelcome expenses on your summer holiday. As 9 in 10 Britons do not plan to travel outside of the Europe this year, the majority of UK holidaymakers will be able to benefit from the European Health Insurance Card (EHIC), which enables travellers within the EU, or Iceland, Lichtenstein, Norway or Switzerland to receive free or cheaper medical treatment that becomes necessary. Apply for a free card via their website.

You should also make sure that you have the correct travel insurance for your trip even if, like almost a third of Britons, you are planning a holiday within the UK this summer. Get a great deal on your travel insurance here.

Roger Edwards, proposition director at Bright Grey said: "Getting away on holiday can be a high point of the year for many people, however with one in three borrowing to pay for their getaway, it is important to make sure they don't end up with a financial holiday hangover on their return. Planning ahead for the future financially can help avoid using expensive emergency measures to cover them for the short-term and also mean that everyone can enjoy the sun without the grey cloud of debt hanging over their heads."

5 Ways to Pay Less for Healthcare

2010-06-30T23:00:00Z

If you would like additional healthcare options to those offered by the National Health Service, you do not have to pay a fortune. Here are some ways in which you can increase your healthcare options without having to significantly increase your budget.

Consider a cash plan

If you wear glasses or contacts, you visit the dentist on a regular basis or you require ongoing physiotherapy, you may find that you'd get more benefit from a health cash plan than from a standard private medical insurance policy. A health cash plan is a type of insurance that enables you to claim back the costs of everyday health requirements, such as optical and dental care, physiotherapy, osteopathy, acupuncture and other treatments.

Most cash plans allow you to claim back all of the money you spend up to a certain annual limit, and premium costs are usually much lower than those on a private medical insurance policy because the treatments you're claiming for are likely to be lower-cost. You cannot claim for treatment you have already received, but can usually start claiming from the moment you start your policy. Children's dental and optical cover can also typically be included up to a certain limit.

Get a quote on a health cash plan.

Ditch the cigarettes

This is not going to come as a massive shock, but if you are a smoker you're statistically more likely to have health problems. This means that if you do want private medical insurance (PMI), you're likely to be in a higher-risk category and as such your insurance premiums will be more expensive.

Quitting smoking will not instantly cut your policy costs, but once you have been smoke-free for a year, inform your insurer and get them to provide you with a new quote that takes your healthier lifestyle into consideration. Some health insurers (such as PruHealth) are also starting to actively incentivise people who lead healthy lifestyles, whilst others (including Standard Life Healthcare will offer no-claims discounts if you have not made a claim in the last two years).

Be flexible on when and where you are treated

Many insurers will offer you reductions on your private medical insurance policy if you opt for a 'wait plan' or 'wait option', where you agree to only go private if the National Health Service (NHS) cannot treat you quickly. The waiting time specified in the policy can be anything from 6 weeks to 90 days, so choose the option that you feel comfortable with. Please note that the waiting time refers to the length of time after your specialist confirms that you need the treatment before you can be seen, not the length of time after you start experiencing the problem.

If you are willing to narrow down the range of hospitals you can go to for private treatment, you will also get a reduction on your PMI premiums. Private hospitals are graded in the UK as A, B or C, with A-grade hospitals being the best and therefore the most expensive. Consider whether you are prepared to travel a greater distance to visit a suitable private hospital, or whether you would be willing to exclude some of the most expensive hospitals from your policy. This really is a choice best left to the individual, and if having the full range of access to private hospitals is important to you then it would not be worth trying to save money in this area.

Be a bargain-hunter (but don't compromise on cover)

Gone are the days when private medical insurance was seen as a luxury product, and there are now many insurers offering affordable cover for individuals, families and companies. Therefore it's highly advisable to shop around in order to find the right policy at the right price - and don't be afraid to bargain! If you're coming to the end of your policy term, never simply renew without question. Instead, look around to see if you can beat your existing policy price elsewhere, making sure that the level of cover you're getting is the same or higher. Click on the link to request a callback from an independent healthcare adviser.

Share the risk with your insurer

There are a number of ways in which you can do this. The first is to agree to a voluntary excess on your PMI health policy, meaning that you agree to pay a fixed amount towards the costs of treatment and the insurer pays the rest. Usually, as you would expect, the higher your voluntary excess, the lower the cost of your policy, because you are taking additional costs away from the insurer.

The second way of distributing the risk is to take out a 'shared responsibility' PMI health policy. Rather than paying a fixed amount towards any treatment, you agree with the insurer to pay a percentage of the cost of the treatment, for example 20%, with the insurer then paying the remaining 80%. The thinking behind this approach is that if you have to bear some of the financial risk for your treatments you'll make extra effort to make cost-effective choices.

Get a PMI quote today and see how much you could be saving.

Cut the Cost of Your Summer Holiday this Year

2010-06-30T23:00:00Z

Family holidays are expensive, so it's important to avoid unnecessary costs wherever possible. Here are some tips for staying in budget.

Hire a car in advance

There are several reasons why it is better to book and pay for your car before you travel. The first of these is that you'll be guaranteed to get a car that suits your requirements - something that is particularly important if you are travelling with a large family, or you need a car with roof storage facilities or sat nav.

The second is that you'll have the time to shop around and find the best deal. If you wait until you arrive at your destination to book, you'll have limited choice and will have to take what is on offer. However when you book in advance, the hire companies have to work that bit harder to attract your business and may advertise special offers online. You'll also save time and hassle on arrival, and will not have to worry about sorting out foreign currency as soon as you arrive.

Get the right travel insurance

When looking for the right travel insurance to cover you on holiday, think about the activities you are going to be taking part in while you are away. Some travel insurance policies have restrictions on medical cover if you're doing anything that could be considered dangerous, such as rock-climbing, scuba-diving or horse-riding.

Also check that the policy offers sufficient cover for replacement of lost and stolen possessions - if your family's luggage and contents is valued at 5,000 GBP in total, there is no point in having a maximum cover of 2,000 GBP for this. You may already have a travel insurance policy that you are not using - some banks and credit card companies give this cover free with certain accounts or cards, so it is worth double-checking.

Find a great deal on your travel insurance today!

Travelling in Europe? Get a free EHIC card

If you are a UK resident, you are entitled to receiving medical treatment that becomes necessary while you are travelling within the European Union, Iceland, Lichtenstein, Norway or Switzerland.

The treatment you would receive would either be free or at a reduced cost, depending on the state system in the country you are visiting. In order to qualify for this treatment, you need to travel with a European Health Insurance Card (EHIC). Click on the link to apply for an EHIC card or you and your family members free.

Don't get stung on 'extras' at the airport

If you have found a cheap deal on your flight, you have to take extra care that you don't get charged additional fees when you get to the airport. Firstly, make sure that you check-in in advance if you are required to do so. Some discount airlines can charge you up to 40 GBP if you fail to check in before you arrive at the airport, negating any savings you made by flying with a 'no-frills' carrier. Set yourself a reminder in your email account or phone,or diary several days before you fly.

Secondly, it may be tempting to fly with only hold luggage to avoid the extra baggage charges. However, if you buy souvenirs that take your bag over the weight allowance, you'll then be forced to check it in on the way back and pay a hefty fee for doing so. Combat this by paying to check your bag in only on the return journey, or by choosing just one of your family's bags to be checked in and packing the heavy items in this bag.

Inform your bank before you travel

Many people have been stranded abroad with no cash because their bank saw international transactions on their account and suspended their account, assuming that a fraud was taking place. The unfortunate travellers are then forced to carry out expensive cash withdrawals on a credit card or spend time and money calling home to sort out the problem.

If you give your bank a few days' notice of your holiday plans, this is much less likely to occur. Also, make sure that you take a note of the geographical number of your bank with you, so that you can contact them from abroad. 0870 or 0871 numbers will not work internationally, but www.saynoto0870.com has a list of the geographical alternatives or just ask your bank.

Find great holiday deals on the SimplyFinance website!

Your 5 Step Emergency Budget

2010-06-24T23:00:00Z

The Coalition Government's first Budget has outlined plans to kick the country's finances into shape. However, it seems that whilst 42% of us are now more confident about the country's finance, more than half of us (51%) feel less confident about our own finances (uSwitch, 2010). Here we present a five-step plan to help you get your finances back on track.

Shake up your Savings Accounts

Many current accounts give you a linked savings account when you become a customer, but be wary of using these for the bulk of your savings, as these accounts can often offer low interest rates. Instead, consider an Individual Savings Account (ISA). Everyone has an annual tax-free ISA allowance of 10,200 GBP, which means that you can save up to this amount each year in an ISA account without paying a penny of tax on the interest that you earn.

Therefore it's advisable to make use of this allowance before you do anything else with your money. Do some research on the best ISA rates on the market, and get ready for some tax-free saving! For additional savings it might be time to shop around, because if you've had the same savings account for a number of years, it's unlikely to be as competitive now as it was originally. Shop around and find out how your savings account stacks up against the competition because there is no point keeping your money in an account where it isn't doing anything.

The Great Switch

With household bills set to rise, you cannot afford to be overpaying on your utilities or your home phone, broadband or television subscriptions. There may be a number of different providers in your local area all offering different deals on essentially the same service, so it pays to look around. Some providers offer a better deal if you buy a bundle of services, such as cable television alongside broadband. Click on the link to compare your current utilities spend with other deals in your local area, or click here to find a better deal on your broadband, phone or television service.

You may be surprised to know that you can probably improve on your monthly insurance premiums - and not a moment too soon as the Insurance Premium Tax is also set to rise next January. This increase will lead to more expensive premiums across the board but particularly for those in 'higher-risk' categories such as younger drivers or thrill-seeking travellers. Rather than ditching your home insurance, motor insurance or travel insurance, visit our comparison pages (follow the links) and see whether you can find a cheaper deal. Health insurance is another area where you can potentially make big savings, so request a callback from an adviser today.

Be Supermarket Savvy

Financial Advisers Grant Thornton estimate that the VAT increase will cost the average family an extra 500 GBP per year. You can counteract this rise by ensuring that you are not overspending on your essentials. Firstly, don't be persuaded into thinking that expensive, branded items are more effective than the own-brand versions - they usually contain exactly the same ingredients. For example, you can find hayfever medication containing the same active ingredients as your normal brand for as little at 99p per packet at Boots, Lloyds Pharmacy or in supermarkets, and own-brand painkillers at a fraction of the cost of brands such as Nurofen and Anadin.

Where it comes to grocery shopping, some find that doing the weekly shop online actually saves them money because they are less likely to pick up 'extras' on the way to the counter. This could also save you on petrol if you normally have to drive quite a distance to your supermarket. Also, use vouchers to save money. Over this recession, vouchers have become more popular than ever - you can make savings on clothes and food shopping, eating in restaurants and taking your kids out for the day, so that saving money doesn't have to mean staying in and doing nothing. Savoo.co.uk and save.co.uk are just two of the UK's many voucher sites, where you can find deals on everything from electronics to fashion and holidays.

Give Yourself Some Credit

It's time to give yourself a bit of breathing space where it comes to your loan and credit card repayments. Firstly, check your credit report with one of the UK's credit reference agencies, Experian (Credit Expert), Equifax or CallCredit. You can do this for a couple of pounds or for free if you take out a subscription and cancel after the initial trial period. This is a full record of your financial history, borrowing, banking and all.

Seeing your credit report will give you two advantages: firstly, it will show you what a credit card, personal loan or mortgage provider will see about you when you apply to borrow money, and secondly it will give you the opportunity to correct any errors on the report and show you where improvements need to be made. Read our article about the 'Credit Report 7 Deadly Sins' for some easy-to-follow ways of improving your credit rating.

Shed Pounds from your Monthly Bills

Now that you have checked your credit report, it's time for some cuts. Credit cards are the worst culprits for eating into your monthly disposable income, so your credit card interest payments are the first thing that you need to address. If your credit rating is good enough, you can look at switching to a new card that offers a 0% balance transfer rate for an introductory period. This will enable you to actually start making a dent in your credit card debt, rather than just paying off the interest.

If your credit rating is not looking its best, you can still move to a credit card with a lower APR (APR is just a fairer version of the interest rate, with all additional fees and charges taken into account). As an added bonus, by making your monthly payments in full and on time you'll also improve your credit rating for the future. Next look at the repayments on any personal loans you have taken out, because it's quite possible that you'll be able to move your loan to a different provider and pay a more competitive rate. Speak to a loan adviser to find out if you can improve on your loan deal and start paying back more debt and less interest.

Congratulations! You have reduced your monthly outgoings, paid down your deficit and introduced a healthier spending approach for the future. George Osborne would be proud.

What Does the Emergency Budget Mean for You?

2010-06-23T23:00:00Z

The first Budget under the Coalition Government was announced on Tuesday by the new Chancellor of the Exchequer, George Osborne. The Budget sets out a five-year plan to both pay down the country's deficit and also encourage economic recovery. Below we explore some of the Budget's main features, and look at how they will affect you.

Work

The income tax threshold is to be raised for under 65s to 7,475 GBP, a 1,000 GBP increase. This means that you can now earn up to this amount before you are charged income tax on your earnings, a move that the Chancellor estimates will lift 880,000 people out of income tax altogether.

There will be a two-year pay freeze for those working in the public sector. The exception will be for the 1.7 million public sector employees earning less than 21,000 GBP, who will receive a flat 250 GBP pay rise in both years.

The Government announced that the Default Retirement Age of 65 would be reviewed, with the likelihood being that it would eventually be scrapped altogether. This would give people the opportunity to make their own decisions about continuing to work into older age.

In a bid to make the UK one of the world's most attractive places to do business, the Government announced a four-year reduction in the rate of Corporation Tax. Currently at 28%, the tax rate will fall by 1% each year until 2015/2016 when it will remain at 24%.

Pensions

From April 2011, the government has announced a 'triple-lock' guarantee for those receiving the basic State Pension. This will see the basic State Pension rising each year in line with income, prices or by 2.5%, whichever of these is highest. This measure is being put in place to ensure that the basic State Pension allowance increases at the rate of inflation.

Osborne announced plans to repeal rules put in place by the previous government that would have seen higher-rate tax relief being gradually withdrawn for employees earning 130,000 GBP or more. Instead, it is envisaged that there will still be a reduction in the total amount that a higher earner can enter into a pension fund each year, but via a scheme that is far simpler to administrate.

The government will scrap compulsory annuitisation at 75 from April 2011 onwards, as a way of giving people more control over the way in which they manage their retirement savings.

Property and Investments

Capital Gains Tax (CGT) will remain at 18% for anyone paying income tax at the lower rate. For everyone liable for the higher and additional rates of income tax, the rate of Capital Gains Tax has now risen to 28%. Capital Gains Tax applies to gains that you make when you sell or give away an asset that has increased in value.

CGT does not apply when you sell your main home (in most cases), when you sell personal belongings worth 6,000 GBP or less, or when you receive interest on tax-free savings in an Individual Savings Plan (ISA) or a Personal Equity Plan (PEP). Capital Gains Tax does apply when you sell a second home or a rented property that you have never lived in, you sell business assets (office premises or shares) or when you receive interest or dividends from most investments. You can find a full list of assets that are liable for CGT on the HM Revenue&Customs site here.

Council Tax rates may remain at current levels in your local area, as the Government has offered to work with local councils to implement a Council Tax freeze in 2011-2012. Although central government cannot force any local council to freeze their Council Tax rates, any council that does cooperate by increasing their public spending by just 2.5% on the previous year will receive a rebate of the same amount from Whitehall. This would then enable that council to keep their Council Tax at the same level.

Household Spending

The standard rate of Value Added Tax (VAT) will rise from 17.5% to 20% from 4 January 2011. The 0% rate of VAT will still apply to essentials such as food and children's clothing. A consumer survey by shopping website Kelkoo showed that 16% were more likely to rush and buy items before the increase comes into force, so we may see a sharp increase in purchases of larger items such as cars, electronics and home appliances before next January.

From 4 January 2011, there are plans to raise the Insurance Premium Tax (IPT) rates. The standard rate of IPT will rise from 5% to 6% of the total cost of an insurance premium, whilst the higher rate of 17.5% (charged on travel insurance, some vehicle insurance and domestic appliances) will rise to 20%. This rise will mean higher insurance costs for all, but it will have a particularly significant effect on younger drivers who already pay higher car insurance premiums.

Welfare

The tax credit system, developed by the previous government, involves a series of benefits that are available (on a sliding scale) to families with a joint household income of less than 58,000 GBP per year. From April 2011, there will be a reduction in the tax credit eligibility for families with a household income above 40,000 GBP (previously 50,000 GBP).

Are You more Loyal to Your Bank than Your Football Team?

2010-06-17T23:00:00Z

How strong are your loyalties to your national team this summer? New research from The Co-operative Bank Current Accounts shows that 31% of UK residents are prepared to switch their allegiance to another team if theirs is knocked out of the World Cup or is not taking part, whilst considerably fewer are prepared to leave their bank.

The research also shows that 19% of people have changed the football team that they support in the past. However, football patriotism is strong enough that four out of five football fans are also prepared to put aside allegiance to a particular football club in order to support their national team. Children are apparently more fickle in their team choices than their parents, with 24% of under-eighteens prepared to switch their support to a different team compared to 12% of over 45s.

Perhaps unexpectedly, fewer people are prepared to move their current account to a new provider than are prepared to desert their national team when they are not involved in the World Cup. Only 29% of people would leave their current account provider, preferring to put up with unsatisfactory customer service or high service and penalty charges.

Rod Bulmer, Managing Director, Retail, The Co-operative Financial Services, said: "Given the passion that people feel for their national side, it's quite surprising that such a large percentage of people would switch allegiances once their team is out of the World Cup."

"Fewer people, however, would switch their current account provider, which is extraordinary given the lack of trust and poor customer service that many receive from banks. However, it's easier now than ever for people to switch accounts if they are unhappy and we've seen a corresponding 38% increase in current account openings since last year."

If you are not satisfied with the service you are getting from your bank, switching your current account has never been easier. Have a think about any elements of your bank's service that you are not happy with, and then shop around for a current account that offers you something more. Most providers will take care of moving over all your direct debits and standing orders for you. Some banks offer a cash incentive for switching, which can provide a nice windfall but only if the service genuinely matches or exceeds that which you are getting from your current bank.

Compare current accounts now and find a better deal.

New Mums Forced Back to Work by Debts

2010-06-17T23:00:00Z

As a new parent, the decision about when or whether to go back to work can be a difficult one. However, a surprising number of new mums in the UK are being deprived of the choice because they cannot afford to stay on maternity leave, according to new research.

The research, carried out by comparison website uSwitch.com, highlights not only the rising costs of having a baby but also the fact that many new parents are unprepared for the financial burden of their new family. Tellingly, over half of new mums (52%) return to work because of financial constraints, compared to the 22% who do so because they wish to continue their career. Four in ten new mums choose to take a pay cut in order to work part-time.

During maternity leave, there is apparently a 34% drop in the average net household income from 3,431 GBP to 2,266 GBP per month. At the same time, the increased costs of preparing for the new arrival can weigh heavily on the remaining income, with an average of 2,521 GBP being spent on baby items during maternity leave. This amounts to a whopping 90% of the take-home pay.

56% of the new mums surveyed did not feel that they were sufficiently well prepared for the combination of new baby expenses and a reduced household income. Only a quarter of respondents had enough money saved in advance to see them through their maternity leave without racking up debts, and less than 10% were able to rely on their partner's income to support them.

Surprisingly, almost three in ten new mums (29%) say that they were not aware of their company's maternity package before they took maternity leave, with a further 30% deciding to have children in spite of the package they have been offered due to the perceived time pressure of not wanting to have children too late. Four in ten new mums get into debt during the time in which they are on maternity leave, with an average debt of 1,329 GBP being racked up.

Ann Robinson, Consumer Policy Director at uSwitch.com, says: "Preparation is key for those planning a family. Check out your company's maternity policy, calculate how much you will need to survive, save money in readiness and cut down on household bills and unnecessary expenses. By keeping a tight lid on your household budget hopefully you will remember your maternity leave for the right reasons and not for the financial headache and debt it can bring."

Are you worried about your debt? Request a confidential callback from a debt specialist today.

Is your Family Travel Insurance policy leaving your children stranded?

2010-06-10T23:00:00Z

If you are planning on travelling as a family this summer, or if your children are heading off alone, make sure that you double-check the terms on your family travel insurance policy carefully to avoid nasty surprises.

Independent financial research company Defaqto has found that of the 423 policies that they recently surveyed, 28% will not cover children who normally live with an ex-partner rather than with the main policyholder, 28% will not cover step-children who do not live with the main policyholder and 49% of policies do not cover children who travel independently.

Many people will assume that if their family situation changes, their travel insurance will remain the same. The above figures show that this is not the case. If you are separated from a partner and planning to take your kids away, or if you are taking out cover for a trip with your partner and step-children (and the children normally live with their other parent), you will need to change policies, or in some cases, providers.

Also, if your child is planning a trip abroad alone or with friends, do not assume that they will be included on your policy simply because they still technically count as a financial dependent of yours. Brian Brown, author of the report and Head of Research at Defaqto said: "Many travel insurers will insure your children and step-children as long as they live with you. But if you take children on holiday with you and they normally live with an ex-partner they might not be covered. Insurers only consider them as family if they permanently live at your address."

Mr Brown continued: "It's imperative that parents check the detail of their travel insurance policies to ensure that they have the cover they need before travelling. In particular, couples who are not married, or have children from a previous relationship need to make sure that children are covered when travelling with them." The first step should be to check the terms and conditions of your current travel insurance policy. If you do not have the right level of cover for your family's needs, call up your provider and find out whether it is possible to upgrade or change the policy. If you do not already have a policy but will require cover this year, make a list of the trips that you and your family members are making, together and separately, and speak to an adviser at the travel insurance company to ensure that these trips are all covered. Also double-check your cover if your children or step-children do not usually live with you. Being abroad with cancelled flights or lost baggage is not the time to find out that your family travel insurance is not sufficient. Click here to start your travel insurance search.

Britons Preparing for Home-based World Cup Support

2010-06-10T23:00:00Z

Armchairs and a well-stocked fridge are proving the most popular must-haves for this year's World Cup, according to the Post Office World Cup Spending Report. However, far from saving money by staying in to watch the games, 30% of fans admit that they will be increasing their spending by an average of 200 GBP over the summer - amounting to a wallet-busting 2 billion GBP in extra personal spending.

31% of people surveyed plan to invite friends round to watch matches, and 15% are stocking up on extra food and drink. When asked for the top purchase to help celebrate the World Cup, 'More alcohol than usual' came out top, followed by 'a supportive flag for my car or front window' and 'More food than usual'. Fourth on the list came the rather more pricey 'Plasma TV' ('An LED TV' was seventh), meaning that electronics retailers will be in for a nice windfall this summer.

Gerry Barrett, Head of Post Office Insurance, said: "It seems many people are set to enjoy a "home match" and will be cheering on their favourite team from the comfort of their living room, to avoid the additional expense of buying food and drink in pubs."

"However, with many people planning to invite family and friends to their homes to watch matches, it's important to make sure that any World Cup investments such as new TVs are fully covered in case an accident occurs in all the midst of football fever. Your team may not win, but the last thing you want is to score an own goal when it comes to your home insurance."

If you are planning on upping the gadget quota in your home ahead of the World Cup, take the time to tally up the total value of your possessions and adjust the 'sum assured' on your home insurance if necessary. Many households undervalue their belongings and therefore risk losing out if they need to make a claim. If you do not yet have home possessions insurance and you're among the quarter of World Cup supporters planning on buying an expensive new television this summer, now is the time to get covered.

Click here to get a free quote from a home insurance adviser.

Save Your Child from Taking on Your Debts

2010-06-10T23:00:00Z

New research from Aviva shows that over 36,000 people die leaving financial dependents each year, and that a shocking 56% of the UK's 5 million families do not have adequate protection. Insurers like Aviva are releasing products to encourage new parents to start thinking about life insurance, but there is still plenty to do to raise awareness of the problem.

Do you think you have enough life insurance to protect your family? Ask yourself these 4 crucial questions:

How much unsecured debt do I have?

If you owe money on credit cards or store cards, or if you have taken out a car loan or another type of unsecured personal loan, this all counts as unsecured debt. If you were to die unexpectedly, could your dependents continue meeting these repayments?

As you don't have a property or other valuable asset secured against the debt, your dependents would not lose the house if they couldn't meet repayments. However, several missed repayments would result in a damaged credit rating, and failing to repay the debt for a longer period could lead to legal action. Do you want to put your family in that situation?

How many years of school do my children have left?

Even when children are in State education, as a parent you know how expensive it can be to buy uniforms and school supplies, and pay for school trips and extra-curricular activities. If the main earner in your family were no longer around, could your children afford to continue their education? Might they want to stay on for higher and even further education? It's important to consider your child's future when deciding how much life insurance you need.

How many years of my mortgage do I have left to pay?

If you have taken out a mortgage, you are legally bound to make regular repayments on the property. If you were to die unexpectedly with no life cover, you'd be effectively handing all that debt to your family and leaving them with no way of meeting those payments. A few missed payments can damage a credit rating, but continually failing to meet mortgage payments can lead to your family being evicted and their home repossessed. A decreasing term policy is a cost-effective way of ensuring that the mortgage payments are covered, if the mortgage is your major concern.

Am I the main earner in my family?

If you contribute all or a major part of the household income, it is your responsibility to ensure that your family is protected in the event of your death. Of course it's a subject that nobody wants to think about. However, by taking the time to speak to a life insurance adviser, you can carry on with your life with the peace of mind of knowing that you have protected your family and your home against the unexpected.

Click here to request a callback from a life insurance adviser today.

Why this is the Best Time in Years to Remortgage

2010-06-10T23:00:00Z

Think back to April last year. We were in the midst of a worldwide recession, and the Council of Mortgage Lenders estimated that almost a million mortgage accounts were in negative equity. Mortgage adviser John Charcol estimated that a further 1.5 million only had equity totaling 15%. All things considered, only a quarter of all UK mortgage holders would have been in a position to remortgage last year.

Why the Standard Variable Rate worked for some

Sitting on a Standard Variable Rate (SVR) mortgage rate - the lender's 'default' interest rate - actually worked out quite well for some people. The SVR is usually set as a few percentage points above the Bank of England base rate. Due to the historically low base rate in recent years, many lenders' SVR rates were actually therefore lower than some of their new mortgage deals, and so 'sitting tight' was not a huge hardship.

The end of the SVR party

Now that situation is changing. Some lenders like Halifax and the Skipton Building Society were able to renegotiate their SVRs with their customers due to clauses in their terms and conditions, leading to higher rates (and some disgruntled customers). Other lenders, although they are contractually obliged to honour the lower SVR for existing mortgages, have introduced a new SVR for all new mortgage contracts.

Why now is a good time to Remortgage

According to figures from adviser John Charcol, 16 lenders have increased their Standard Variable Rate since the base rate fell to 0.5%, and 2 have increased their SVR in the last month. No lenders have cut their SVR in almost a year, and it's unlikely that any now will. Meanwhile, fixed rate mortgages are currently at their cheapest levels since 2003.

House prices are now back to within 9.1% of their original levels, according to Nationwide, and higher loan-to-value lending is now firmly back on the menu. As more good news, if you have been on your lender's SVR, you'll not have any early repayment charges to pay if you remortgage.

Should you be looking around?

If you have good credit and you don't need to self-certify your income, you could be in a good position to improve on your current mortgage deal. John Charcol estimates that in addition to the above criteria, if you are paying a standard variable rate of 3.5% or more, and you have a loan to value of up to 85%, there is likely to be a product in the market that will save you some money on your monthly repayments. If you can't prove your income or if you have adverse credit, you probably shouldn't consider moving at the moment, but it may still be worth talking to a mortgage adviser to discuss your options.

Request a callback from a remortgage adviser today.

6 Tips for Using Your Cards Abroad

2010-05-26T23:00:00Z

Now that the holiday season is finally upon us, the UK Cards Association and travel association ABTA have published a guide to using your cards abroad this summer. Some of the main points are below:

1. Clear out your wallet before you head off, so that you're only taking cards with you that you plan on using. Leave the others safe at home.

2. Take the emergency contact numbers for all your cards with you, and store them separately to your wallet. Also, make sure that you have the geographical numbers that will work from a landline overseas.

3. Check that all your card companies have your most up to date contact details, including your mobile number - as they may assume there is a problem and block the cards if they are unable to reach you.

4. If you have card protection insurance, make sure that you have all the policy details with you as well as the insurance provider's contact details.

5. Make sure that the credit limit on your card is sufficient (or that you have available funds in your account) for the spending you intend to make, especially if you plan to book hotel rooms or hire a car whilst abroad.

6. Check your statement carefully for any unfamiliar transactions when you return. If there are any, report them to your card company as soon as possible.

For more useful tips on using your cards safely abroad, you can download the full guide here.

5 Steps to Beating Your Debt

2010-05-19T23:00:00Z

In today's society, debt is a part of everyday life. However, there is a massive difference between necessary debt (mortgage, student loans) and destructive debt that ties you into paying back the same loan or credit card for years after you first needed the money. Here are 5 steps to beating your debt.

1. Admit that Debt has become an issue

Spending beyond our means is something that most of us do from time to time. However, it's important to balance this out by spending a little less the following month, otherwise you'll quickly find yourself at the bottom of your overdraft and asking for an extension. Your bank and other creditors will soon lose patience if you continually borrow more than you are able to pay back.

Write a list of the people or companies that you owe money to, and work out how much interest you pay to each company per month. The debts with the highest interest rates need to be your initial focus. Also, you need to make immediate changes to your lifestyle to start paying down your debt. Look over your bank statements and work out where cutbacks can be made - be ruthless, it's not forever.

2. Open all of your post...bills included

If you 'forget' to open the bills that come through the letterbox, your creditors are only going to get more persistent - and in serious cases they will pass the debt on to a debt collection agency - some of whom can be pretty intrusive. Work out how much cash you have each month that can be used for repayments then call everyone on your creditors list, starting with the high-interest debts.

Explain that you have been having some financial trouble, but that you want to sort out the situation. They should respect the fact that you are being proactive, and either agree to freeze your interest or enable you to make manageable payments towards your outstanding debt. If they are unhelpful at first, do keep trying. It might take a couple of phone calls to get through to someone sympathetic.

3. Keep a record of everything

If you have a large number of creditors, chances are that you will be speaking to a lot of different people. Make sure that you always get a reference number for each call and if possible the name of the person that you have spoken to. Keep all paper correspondence in a file. The reason for doing this is to protect yourself if you should have to go to court.

4. Beware replacing debt with more debt

Although debt consolidation loans can offer temporary respite, you should be cautious about choosing this option. After all, you are effectively swapping one debt for another. However, if you have credit card debt or another type of high interest short-term loan, and you are unable to ask family or friends for help, a longer-term loan with a lower interest rate can give you some breathing space, and preserve your credit rating.

5. Get professional help

If communication has broken down completely, you may need to resort to a debt management plan or an Individual Voluntary Agreement (IVA), where a debt specialist liaises between you and your creditors to put together a repayment plan. Do be aware though that both a debt management plan does cost money, so also consider a free service such as the Citizens Advice Bureau.

If you'd like to speak to a debt specialist, simply fill out our form and request a free callback.

Finding the Right Travel Insurance

2010-05-13T23:00:00Z

Before we even noticed, we are in the middle of May. Summer is fast approaching and together with them our long-awaited summer holidays. Most of you have already started organising your summer excursions. As holidays are supposed to be stress-free, you should make sure travel insurance is at the top of your holiday list- even before your suntan lotion.

Travel insurance can give you the peace of mind of knowing that when you're travelling away from home, you're covered if your luggage were to get lost or stolen and your medical expenses would be covered if you fell ill. There are different types of travel insurance including annual and single trip holiday insurance, families and business trips. You can also find winter sports cover, golf equipment and scuba diving cover and insurance for backpackers and lost or damaged baggage.

Travel insurance was once considered to be a 'nice to have' product rather than an essential. However as we've seen recently that strikes and ash clouds are only two of the reasons that can hold you up on your travels, and so saving a relatively small amount by not getting yourself covered could prove to be a false economy. The insurance doesn't need to be expensive, and any accident or illness while overseas or any last-minute flight cancellations can leave many passengers out of pocket and far from home so it's much better to be safe than sorry.

Points to consider when buying Travel Insurance

When applying for travel insurance you will be asked to fill out a form with personal information, such as your date of birth, your gender and whether or not you are a smoker. These information are going to be matched against statistical data to decide how likely you are to make a claim and the final cost of the insurance will depend on the information you provided.

A single trip travel insurance policy is certainly the cheapest option. However, if you are of the lucky ones going on holiday twice a year or more, you should go for an annual or multi-trip policy. By choosing this option, you can save time - since you won't have to compare insurance policies each time you travel - as well as money. Just remember to check in advance of your trip that your policy covers you in each place you're travelling to and covers you for all the activities you're planning.

You should also take into account the age restrictions that insurance might have. Standard single trip, multi-trip or annual travel insurance policies typically provide cover up to a certain age. Therefore, if your birthday falls during the insurance policy term, you should double-check that you're still covered or whether you need to update the policy.

The most important you should consider is what to expect to be covered for medical emergencies. Pre-existing medical conditions are very rarely covered and would require a specialised travel insurance policy. The cost of getting treatment abroad varies a lot. Most policies cover expenses up to between 2m-10m pounds. Two million pounds should be the absolute minimum, but you can get much higher limits, especially if you are planning high- risk activities, such as skiing.

Nowadays, the main cause for concern amongst travellers is cancellation, and the news has been full of stories recently about the trouble that people have had claiming for cancellations caused by the aftermath of the Icelandic volcanic eruptions. So make sure your insurance policy covers you for any eventuality- or most of them at least- to avoid any nasty surprises. And note that many policies only cover you once you have checked in.

If the most extreme that could happen to you is getting sunburned, then extra sports cover definitely wonÃ??Ã??Ã??Ã?Â¢Ã??Ã??Ã??Ã??Ã??Ã??Ã??Ã??t be necessary for you. But if you like the more extreme brand of holiday and you are into skiing, bungee jumping and other high-risk sports and activities, you'll need to cover yourself for these and of course pay extra. The insurer will usually specify which of these activities they will cover as standard.

Lost property is also an important aspect to consider. You can get your luggage insured for a little extra, so that you will get some money back if it ends up on the wrong place. You may also get a daily amount if you are abroad and are left without your luggage. However, this is not the most important aspect to consider and might be a pointless expense, especially if you are travelling with just clothes and non-valuables.

Most policies will include excesses. When you compare travel insurance you need to have a look at how much excess you will have to pay should you get injured, require medicines, lose your luggage or have your money stolen. You will have to pay a small excess per feature you wish to claim for and the excesses will be detailed in the policy document - so have a read before you decide to make sure you're happy with the various excesses.

It is important to compare the level of cover and benefits included in each policy, not just the price and find out which one suits your own needs. According to a research by Sainsbury's Bank, over 25 million pounds worth of claims will be turned down because people take out the wrong insurance for their needs. So make sure you take the time to do a proper search and enjoy your holiday with peace of mind.

To start your search, check out Travel Insurance Web for single or multi-trip policies.

Why An Offset Mortgage could beat an ISA for Savings

2010-05-06T23:00:00Z

Research by HSBC-owned lender first direct has found that savers who kept their funds in ISAs for the past ten years may actually have been better off using those savings to bring down the interest rate on their mortgage. The study calculated the largest possible saving that you would have enjoyed from using up your ISA allowance each year since the start of the 2000 tax year on April 6th, working out to 38,328 GBP.

If you had instead put the same amount of money into an offset mortgage account, thus making the equivalent savings on your interest rate as well, you would have saved a total of 31,200 GBP but also have knocked up to 10,434 GBP off your mortgage repayments too. This equates to a total saving of 41,634, or 3,306 more than your ISA would have earned for you.

What exactly is an Offset Mortgage?

An offset mortgage works by reducing the balance of your mortgage by the amount of money you have saved in a separate, but linked, savings account. Instead of earning interest on the money on your savings, you'll have this amount effectively deducted from your mortgage balance, meaning that you only have to pay interest on the remainder. For example, if you had a mortgage of 100,000 GBP and savings of 15,000 GBP in an offset mortgage savings account, you would only pay mortgage interest on 85,000 GBP of your mortgage.

The main benefits of this product are that you don't pay any tax on savings you would otherwise have earned, and that you can pay off your mortgage loan faster. As you'd expect, offset mortgage deals vary between lenders, with some lenders enabling you to link your mortgage to a current account instead a savings account. The current account mortgage (CAM) was the original type of offset mortgage available in the UK, but back then, you'd have to have lumped together your mortgage and account balance, whereas now you can keep them separate.

So does the same apply to saving in the 'tennies'?

Due to the low interest rates, savers do not currently have a lot to get excited about, despite the recent increase in the ISA allowance from 7,200 GBP to 10,200 GBP. Therefore, it's worth considering an offset mortgage if you are in a position to move from your existing mortgage deal, or if you are taking out a mortgage for the first time and you have savings that you would like to use against your loan.

A Flexible Saving Option

In addition to being able to pay down an immediate debt, you will usually find that savings accounts linked to an offset mortgage will allow you instant access to your money. In a standard savings account, the rule of thumb states that the longer you're prepared to lock your money away for, the higher the interest rate you'll receive.

Richard Tolchard, senior mortgage product manager at first direct, commented: "For people without a mortgage or possibly nearing the end of their mortgage, cash ISAs are often the most efficient way to save cash. However for savers who hold a mortgage, this analysis show that cash savings work harder offsetting against a mortgage than they do within a tax efficient ISA."

Green Car Insurance to Reduce Your Carbon 'Tyre-Print'

2010-04-15T23:00:00Z

Driving a car and being eco-friendly about it may sound oxymoronic. However, there are various green car insurance options available nowadays where you can help the environment and take responsibility for your carbon 'tyre-print'.

Green initiatives are emerging everyday in the business world, and the motor industry must be at the forefront of this green innovation since it is obvious that vehicles highly aggravate the environmental problem. However, if you already own a hybrid, hydrogen, or biofuel-powered car or an electric car, don't rely solely on that.

The new and emerging 'green' car insurance market is here not only to help and advice on a whole host of environmental issues, but also make you feel a little better at the same time. Green insurance companies are suitable for drivers who want their insurance to save them some money and benefit the environment as well. There are several providers in the UK offering eco-friendly schemes that will help you offset your vehicle 'tyre-print'.

Erase your carbon tyre-print

The majority of these companies offer you the chance to offset your carbon emissions. This means that an amount of the money the customer pays for the insurance will go to carbon-offsetting projects. The company assesses how much carbon dioxide your car emits during the year, by taking into account the engine size of the car, the annual mileage and the fuel type used.

The company then acquires the required number of carbon credits from some of the many carbon offsetting projects taking place around the world. The more a vehicle pollutes, the more credits have to be purchased. This scheme could take various forms, such as planting trees, supporting recycling schemes or donate money to environmental charities.

There are companies that promise to offset even 100 percent of the carbon emission. Others take a specific premium of what the customer pays for these schemes. With green cars becoming more popular every day, some providers offer schemes such as paying an additional premium to offset your emissions or reduce premiums for cars which are powered by alternative fuel.

You may have heard of ibuyeco, which offers a donation to an eco-friendly charity for every policy purchased- all of their money. Whenever you buy a policy, ibuyeco asks you to choose from a selection of charities for your donation to go. It aims to raise over 1 million pounds by 2011 for this purpose. The biggest UK provider is Green Car Insurance Company, which aspires to offset 100 percent of the car's annual emissions. Its primary project is to plant a new forest at St Cyrus near Montrose in Scotland. And there are many car insurance providers that adjust their products to suit drivers with ethical consciences.

Apart from offsetting carbon emissions and charities, some providers offer to view and monitor reports on your driving style and compare it with other drivers - to see how green your driving really is. This could include information such as at which rate you brake or accelerate, how many short journeys that could be avoided you do or for how long you leave the car idling. Some companies offer low-emission discounts if you drive greener. You can even find further green incentives offered, such as offer of recycled car parts for repairs, when this is possible, or free recycling of your own car if it is written off.

Choosing green car insurance

Finding out which green car insurance suits your needs most can be very confusing, as there are so many on the UK market, each of them offering slightly different policies. Although increasing competition in the field of 'green' financial products and services means that cheap and eco-friendly no longer have to be mutually exclusive, you may still find you need to pay a little more to be ethical.

Therefore, part of the decision-making process needs to involve an assessment of how much you can afford to spend and if paying a premium for a greener product is something you could manage in order to balance out any environmental excesses made by your car. Conversely, many green insurers offer discounts if you are driving eco-friendly cars. So if you own such a car, it could actually be more expensive to be insured in a conventional provider.

When buying car insurance, it is crucial to not to look price alone and think of what you are getting for the money you pay. Environmental issues aside for a moment, your car insurance also needs to protect you, your car and other road users, and you have to consider whether the provider offers you the same level of protection you could find elsewhere. Make sure you shop around before deciding on the best deal for you.

Is an Individual Voluntary Arrangement right for You?

2010-04-15T23:00:00Z

The number of UK bankruptcies and other debt-related issues has reached an all-time high, with financial hardship causing a huge burden for thousands of households during this economic crisis. When things go wrong, there are a number of solutions available to help you deal with your debt. An Individual Voluntary Arrangement (or IVA) can offer you one potential way out. We explain the ins and outs of IVAs, to help you decide whether this is the right solution for you.

An IVA is a government debt solution available to residents of England and Wales - a 'trust deed' is the Scottish debt management equivalent, with some minor differences - which enables you to decrease and eventually eliminate your debt. If you owe over 15,000 pounds to three or more creditors and can't afford to meet the payments, an IVA may be the simplest way to leave you completely debt-free. Typically, the process lasts five years. An IVA is considered to be an alternative to bankruptcy, and one that is also legally-binding, unlike other debt management plans. One major advantage of an IVA over bankruptcy for homeowners, is that the former is highly unlikely to force you sell your home.

How to make an Individual Voluntary Arrangement work

IVAs are there to help you write off 'non-priority' debts, such as credit cards, overdrafts, unsecured personal loans and store cards. They are not designed to clear 'priority' debts, like mortgages, court fines and Child Support Agency payments.

An IVA is a contractual agreement with the people that you owe money to (your creditors), assuring them that a certain level of debt repayment will be maintained over the life of the agreement. It is a formal repayment proposal presented to your creditors by a licensed professional, called an Insolvency Practitioner. This should enable your creditors to reclaim a greater proportion of your debt than if you had declared yourself bankrupt. It could lower your monthly repayments and freeze the ongoing charges levied on your debt, and once the IVA term has been completed any remaining debt is written off.

How to set up an Individual Voluntary Arrangement

IVAs are legally binding, so they can only be managed by an Insolvency Practitioner. The Insolvency Practitioner will recommend you this solution only if it's appropriate and crucial for your personal circumstances. The Insolvency Practitioner will evaluate your suitability for an IVA and then will formulate a personal plan according to what you owe and what you can manage to repay each month once your essential monthly living costs have been covered.

The plan will then be submitted to all your creditors seeking repayment. Subsequently, the creditors vote on whether or not to accept your IVA and if the majority of them agree (75% of the non-priority creditors), the plan will proceed. Some companies do charge an administration fee for setting an IVA up whilst others offer the service for free, but you are under no obligations to a company once you have had an initial consultation, so only proceed if you are comfortable with the terms and have everything agreed in writing.

Why to undertake an Individual Voluntary Arrangement

IVAs may not be designed for priority debts, but they can help you stay on top of them, by eventually freeing up your income to make higher repayments towards clearing these. Your Insolvency Practitioner has to figure out how much of your monthly earnings are taken up by your priority debts. The IVA payments will be based on what you can afford after these vital commitments are taken into consideration.

An important distinction between an IVA and bankruptcy is that IVAs are completely confidential. Only you, the Insolvency Practitioner managing your IVA programme, and your existing creditors will know about your agreement. This means that you won't have any problem keeping your job secure, protecting your home, and maintaining your reputation. The only exception to this is if you do apply for credit, where you are required to reveal your IVA status. As a rule, you'll not be able to borrow money during this period, although there are exceptions in certain circumstances.

It is remarkably rare to not to be able to repay debt through an IVA as long as you keep to the programme, because you would know from the beginning exactly what are signing up to. When the programme has started, your lenders will be unable to take any legal action against you and even if they have already started, once the IVA starts and they have agreed to it, they are legally required to cease proceedings. In addition to avoiding being hassled by creditors, you would also have the peace of mind of one lump sum leaving your account each month, rather than having to juggle multiple repayments and payment deadlines.

When Individual Voluntary Arrangements are not suitable

There are some cases where going bankrupt could be better than signing up to an IVA solution. For example, if you don't own a house and have nothing to lose by declaring yourself bankrupt, then an IVA solution may not be suitable. It is worth noting that people tend to be discharged from bankruptcy in one year, while most IVAs last for 5 years.

You should bear in mind that the typical repayment plan for an IVA is five years, but the fact that you have undertaken this debt solution can make obtaining credit more difficult and expensive for the sixth year as well. The reason for this is that an IVA will stay on your credit report for six years from the start of the arrangement. Also, you may be requested to sacrifice any increase in income received - such as salary rises and bonuses - while the programme is running, so that this additional income can be used to pay off your debts.

Furthermore, an IVA is only suitable for those who are able to make regular payments for the full duration of the programme. IVAs require a minimum level of 'disposable' income to ensure you can make your monthly contributions, which is usually around 150-200 pounds a month. So if your income is unsteady you should consider other solutions.

An IVA is by no means a quick or easy fix, but it does provide a medium-term solution that will give you peace of mind and enable you to get rid of your debt in five years time or even less. Wherever in the UK you live, you can request a confidential call from a debt specialist by filling out our short debt form.

Are You Spending too much in Fuel and Water for Your Household?

2010-04-15T23:00:00Z

During these cost-cutting times, utilities are among the most important considerations when looking for ways to cut back on household expenses. According to a new report by the Office of National Statistics (ONS), domestic spending in water and fuel are at their highest levels in forty years. The report shows more bad news - spending in utilities in 2008 accounted for 21% of the costs of households whereas this figure was 15% in 1971.

These figures have been studied by the government, amid concerns that the UK has high levels of what they dub 'fuel and water poverty'. This type of poverty is defined as spending over 10% of household income in energy and fuel, and spending at least 3% on water bills. Currently, the government considers around 2.8 million households as victims of 'fuel poverty', with about 3.5 million having to deal with 'water poverty'.

With such a gloomy outlook from the government, what can one do to cut back and save on the utility bills for the home? Despite the doom and gloom from official figures, there are several things that can be done to avoid a hike in spending for water and energy.

Compare and save

Regardless of what utilities provider you are with or how long you have been with them, the best way to save money is by doing an annual review of how much money is spent on each of these basic necessities.

Florian Ritzmann, product manager at utilities comparison engine Xelector, says that the best way of carrying out this review effectively is by keeping all the bills that your household accumulates during a year. This way a comparison can be made on how much prices have changed during that time period and evaluate correctly whether switching providers is necessary.

"Switching providers may reduce bills up to 23% - that is around 250 GBP of savings annually," says Ritzmann. "You cannot expect to get a good deal if you don't check your bills every year."

Free tools such as the Gas and Electricity Comparison Service and the Household Monthly Utilities Calculator from SimplyFinance can really help with this review process. Even though a household may have changed providers a year ago, prices are always fluctuating. It may be about time to start checking if there are better deals elsewhere.

Wholesale providers drive prices down

Another trend that helps consumers in saving money on utilities is the reduction in prices by energy and water suppliers. In energy, 'the big six' companies - British Gas, Npower, EDF Energy, Eon, Scottish Power and Scottish&Southern - have planned to reduce their standard tariffs between 4% and 8% in the next couple of months. A similar trend is happening to water companies as Ofwat, the water industry regulator, has struck a deal with water companies to reduce bills by 0.76%.

Nonetheless, the cost of utilities bills still depends on the area where the household is located. Speaking about water bills, Ann Robinson, director of Consumer Policy at uSwitch.com feels that the drop may hide the fact that in some places bills may go up. "Consumers face a postcode lottery," she said, "and this means that there will be winners and losers depending on what people's local water supplier has agreed with Ofwat."

The fact that while wholesale prices are driving bills down, comparing and switching is still the best option to avoid being ripped off. The same applies to the type of tariff that is applied in the home. In water bills, for example, a way to save money can be made by changing to a metered bill instead of an unmetered one. It all depends on one's consumption and needs as a consumer of energy and water.

Monitoring consumption

The best thing to do if you want to find out how much energy you are consuming is to buy an energy monitor. This is a small electronic device that is clipped to a cable in the electricity meter which measures and displays how much energy is being consumed in real time. According to Directgov, customers can save from 5 to 15% when owning a monitor - that accounts for 25 GBP to 75 GBP off a 500 GBP bill.

"When I used an energy monitor for the first time, I noticed that by leaving my electric towel rack on all day I was consuming a lot of electricity," said Ritzmann. "By turning it off and comparing the consumption on the monitor, I realised that by only turning it on when I needed it saved me 15 GBP a month."

Energy monitors can be found in major retailers and their price can range from 20 GBP to 100 GBP. If used properly, they will mark a change in your bills from the first month of usage.

Find out how much you could be saving on your Gas and Electricity.

Pension Issues in the 2010 Election Manifestos

2010-04-15T23:00:00Z

Now that the General Election has been confirmed for May 6th, the main Political Parties have announced their manifestos, outlining their major policies. While many of these policies are crucial for attracting the country's voters, none are so controversial as pensions. The three Parties tend to cover similar grounds in their management of pensions, but it is in the details where the differences lie. So how do the views of the Labour, Conservative and Liberal Democrat Parties compare with regards to pensions?

Pensions - A Recent History

During the 1980s, the government of Margaret Thatcher decided to change the rules for how pensions were calculated. The government imposed the Retail Price Index (RPI) as the basis for how much money would be allocated into UK citizens' pensions once they reached retirement age, a change which some consider to have damaged the income that pensioners will get in their old age.

The three Parties have since concluded that this way of calculating pensions is unreasonable for citizens and have decided to restore the link between pensions and average earnings. The difference between the parties is when this link will be reinstated: Lib Dems say that they would impose it right away, Conservatives are reviewing the possibility of implementing it by the end of the next Parliament, and Labour has said that the change would come into force by 2012.

Analysts have criticised the pronouncements by the three Parties as not being realistic, since public debt is projected to balloon from 38% of the Gross Domestic Product to as much as 75% of the GDP. Therefore, the implementation may depend more on the affordability of the plan than on whether it will benefit pensioners.

State Pension Age

On the issue of what age is reasonable to start qualifying for a state pension, all three parties agree that the current state pension age of 65 for men and 60 for women is too low. All coincide that nowadays people tend to live longer and to retire at that age would put a high burden on the already growing debt in public finances.

In this sense, the difference between the parties is when should the change be implemented and by how much. Labour, who is already going to raise women's state pension age to 65 this month, has said that between 2024 and 2046 the state pension age will rise to 68 for both genders. The Lib Dems agree with the policies of Labour. The Conservatives, however, believe that state pension age should be raised sooner. They are currently planning to hold a review that will increment the state pension age for men from the year 2016 and 2020 for women.

Annuities and access to Pension savings

Annuities are investments that give the pensioner a guaranteed income for the duration of their life. They convert a lump sum accumulated through a pension into a policy which is used to provide an income to the holder during their old age. Annuities pay out in either regular, monthly payments (like a normal income) or in larger, less frequent payments.

The government currently forces pensioners to make a compulsory annuity purchase by the age of 75. Similarly, by law no one is able to access the money invested in a pension before the age of 55 and after that age the pensioner is only able to take a 25% lump sum from it.

If elected, Labour plans to uphold this practice by offering a compulsory pension annuity and not change the access to the pension money. The other Parties do not agree with this imposition and plan to abolish it by allowing pensioners to decide for themselves. The Lib Dems in particular plan to do this by relating annuities to an individual's income level. They also have confirmed their intention to allow early access to the pension savings, while the Conservatives are at the stage of reviewing this possibility.

Points to Consider

While the three major Parties are promising these measures, it is worth noting that these are all campaign points, for which the successful Party (or Parties) must be held accountable for implementing when they get to power. Most of the proposals that have been espoused by the parties are dependent both on their cost and on the growth of public debt in the following years.

The biggest problem with the Parties' manifestos is that they do not fully take the deficit into consideration, and plan to spend money that may no longer be in the hands of the State. The Institute of Fiscal Studies has warned that spending and cuts proposed by the parties are inevitable and would eventually increase to higher levels than has been laid out during the election campaign.

To make matters worse, according to the Financial Times, the various Party manifestos have apparently been miscalculated and are missing an extra 30 billion GBP that must be found through some means. Voters will have to wait and see how the main Parties compensate this budget hole and how treatment of the retirement issue will affect pensioners in the future.

Cashback Sites Explained

2010-04-14T23:00:00Z

Using cashback sites is a great way of making savings on items or services that you buy everyday. So how do they work, how much can you save and is there a catch?

Which sites are out there?

A number of cashback sites have grown up in the last few years, the largest of which are Quidco, Topcashback and Rpoints. All of the cashback sites have different relationships, so as long as it is free to sign up it's worth using a couple to have a wider coverage of the online retailers giving cashback.

How do they work?

Although the majority of websites are free to access and use, websites owners often earn revenue from referring their visitors on to other websites and online retailers. They do this by including a tracking code in the link that you click on to leave their site, known as an 'affiliate link'.   Then, if you buy anything from the site you've been sent to, the referring site earns a commission from the retailer.

For example, if you see a Nike link on a website and you click through on it, chance are, when you buy a pair of trainers on the Nike website, the last site you visited beforehand will receive a percentage of the price of your trainers in commission from Nike, as a thank you for the business. This does not cost you any more, it is just an agreement between the affiliate and the retailer.

Cashback sites are essentially a huge collection of these affiliate links. The difference is that they pass 100% of the commission that they earn back to you, the customer. Most of these sites are free to sign up to as well, meaning that there is no upfront risk for you.

How much can you make?

That all depends on what you buy and how much you spend! Obviously you want to avoid buying things that you wouldn't have bought without the promise of getting money back - it's not a bargain if you spent 30 GBP more on a jacket just to get the 5 GBP cashback.

Quidco claims an average annual cashback haul of 262.36 GBP per member. With Topcashback.co.uk, in addition to earning money back on purchases you can also earn 1 GBP a time for referring your friends to the site. If you want to do something good with the money you save, you have the option to donate to charity.

So how do they make their money?

With a few exceptions, cashback sites tend not to use banner advertising on their sites, and instead will take the first 5 GBP that you earn as an 'administration fee' for the running of your account for the year. This means that there are no costs for you upfront, although it does mean you need to commit to the site for several purchases in order to see a return.

What products can you make savings on?

The products and services on offer range from travel, to financial services and online gambling. The cashback is offered in one of two ways; as a percentage of the cost of the item or service, or as a set amount.   For example, Quidco offers up to 150 GBP for Vodafone contract phones, and at Tesco, 10% cashback on clothes. Dell offers 25 GBP cashback at Rpoints. Topcashback.co.uk would get you 21 GBP cashback on AA Breakdown cover.

If you know that you need to purchase something anyway, it's worth having a look through the cashback sites to see whether any of them have a relationship with that retailer. After all, the retailer wants your business and the cashback site wants new members, so there is nothing wrong with using both services to shop around for the best deal.

Cashback in 'real life'

As the number of consumers using cashback sites increases, the buying power of these sites also grows. This means that many more shops and services could soon be signed up, and that you've got even more opportunity to save.   Although the majority of retailers only offer cashback online, there are some, including Quidco, that allow you to register your credit card and generate cashback in store.

You can also use a cashback credit card for purchases both online and in person, giving you an additional way of receiving money off the store price. Just remember that if you're going to use a cashback credit card to save, it's important to pay off the balance in full each month because otherwise the hefty credit card fees will quickly negate any saving you make.

What's the catch?

You'll probably not get a great cashback rate on popular items, because the retailer knows that these items are likely to sell well anyway. On the other hand, if the cashback amount seems a bit too good to be true, it's likely that you'll be able to find a cheaper product elsewhere - this is particularly true of financial products.

Payments are only made when the cashback site has been paid by the retailer, so it could take up to 3 months for this to happen. You cannot usually cash in the money you've made back up to a certain amount, often 20 GBP. Therefore, you shouldn't consider a cashback site as a quick way of making money, but rather a convenient saving on goods and services that you would have bought anyway.

Are You 'Clueless' about Home Buying Costs?

2010-04-08T23:00:00Z

Are you fully aware of the financial commitment you're taking on when you decide to buy a property? According to research carried out by IFA portal unbiased.co.uk, 24% of homebuyers have no idea how much the additional costs of buying a house will set them back. 9% of those surveyed thought that the extra costs would only amount to 1,000 GBP. Those 9% would be surprised to know that this is only a fraction of the probable cost.

Things are looking up for the 2010 first time buyer, in that this year's Budget included a two-year extension to the Stamp Duty holiday for properties costing up to 250,000 GBP. Stamp Duty would otherwise have cost these buyers up to 2,500 GBP on top of the price of their property. However, despite these savings, there are a number of other costs associated with buying a house that it is essential to be aware of.

Mortgage Arrangement Fee

Typically there will be a fee of 500-1,000 GBP to pay when you take out a mortgage. Some lenders will offer a lower arrangement fee, but approach these deals with caution as the costs will often be recouped through an increased interest rate. When you're comparing mortgage deals, use the APR (annual percentage rate of change) as the basis for your comparison, because this figure takes all the arrangement fees and introductory rates into consideration.

Valuation and Survey

For a start, you need to have the house valued and surveyed by an expert. Often, your mortgage lender will insist on this process being carried out before agreeing to a home loan. The valuation confirms that the house is worth the amount that you wish to borrow, and the survey serves to determine the property's basic condition and overall state of repair.

If you're planning to buy a particularly old or damaged property, it's a good idea to get a full structural survey carried out before agreeing to the purchase, to ensure that it is habitable. A survey could cost from 50 to 1,000 GBP, depending on how thorough you need it to be.

Solicitor Fees

The legal process of transferring ownership of a property is a complicated one, and you will need to hire a professional solicitor or conveyancer to take care of this for you. This can cost between 600-1000 GBP for the basic service. You'll also need to pay for the Land Registry fee to register as the new owner of the property. The costs for other searches and environmental checks may fall to the buyer to cover, although they may be included in the home information pack (HIP) and therefore be covered by the seller. Allow up to 1,500 in total for these legal fees.

Buildings Insurance

Often, your lender will make it a condition of your mortgage that you take out home buildings insurance on the property. This is because if the house is damaged, they can recover their investment. Of course, it also works out well for you because you would not have to pay the full costs of having your house rebuilt in case of flood, subsidence or fire damage.

The cost of buildings insurance will depend on multiple factors, including the value of the property and whether you are buying a property in an area at high risk of flooding. When you have found your property, shop around for home buildings insurance quotes - usually there is no requirement to take your lender's insurance, so you may be able to find a cheaper deal elsewhere.

Karen Barrett, Chief Executive of unbiased.co.uk comments, "Buying a home is a huge financial commitment, and it is crucial for consumers to factor in all the additional costs involved in order to then calculate which price bracket they can afford. This involves thinking beyond your deposit and mortgage, and taking into account stamp duty tax, survey and solicitor fees, and other essential checks - not to mention how much you may need to spend on your home once you actually move in."

"Consumers should ensure they seek advice from a whole of market mortgage adviser so they are fully aware of all the costs involved in house-buying before they find themselves out of pocket. Especially if they decide to add these extra costs onto their mortgage - as the added interest will be on top of the value of your property - pushing the cost up significantly.

Simply fill out our short mortgage form to request a callback from an experienced mortgage adviser. The adviser will be able to talk you through the full cost of purchasing a property, and provide you with no-obligation mortgage quotes based on your personal circumstances. Use our 'Total Cost of Home Purchase' Calculator to help you with your research.

The 2010 Budget at a Glance

2010-03-25T00:00:00Z

Chancellor Alistair Darling took centre stage to give the customary Budget Day broadcast to the nation on Wednesday. With his traditional Red Box in hand, the Chancellor delivered the Budget speech to Parliament where the focus was to "secure a recovery" and look to the future. Here is an overview of what was said.

Banking and Borrowing

This year Darling forecasts that borrowing will reach 167 billion GBP, 1.1 billion GBP lower than expected. In the next five years, borrowing is predicted to fall from 163 billion GBP to 74 billion GBP.

On the banking front, the one-off bank bonus tax that was implemented at the start of the year will be raised to 2 billion GBP, which is double the amount forecasted. Darling announced that he is backing taxes on bank transactions, nicknamed the 'Robin Hood Tax', but specified that the tax must be implemented on a global basis.

The report outlines plans by Royal Bank of Scotland and the Lloyds Bank Group to provide 94 billion GBP in small business loans. In light of the recession, the Chancellor also proposed basic bank accounts for a million extra people. This marks a continuation of the government's efforts to make personal banking accessible to all.

Tax Allowance

While tax allowances for those earning over 100,000 GBP is going to be gradually removed, Darling has promised to clampdown on tax avoidance in efforts to raise 500 million GBP. New tax information exchange agreements have also been arranged with three new countries: Belize, Grenada and Dominica. On a more domestic level, there will be an increase of 4 GBP a week in child tax credit from 2012 onwards for parents of one and two-year old children.

Boost for First Time Buyers

For the next two years, the Stamp Duty threshold for first time buyers will be 250,000 GBP. This means that this property tax will not apply for nine out of ten first time home buyers, representing a saving of up to 2,500 GBP. This is expected to help boost the UK's property sales, provided that first time buyer mortgages also become more widely available.

Of course funding for this must come from somewhere, and so the Stamp Duty on homes worth 1 million GBP or more is set to increase to 5%. Dubbed the 'mansion tax', this initiative takes the maximum tax payout to 50,000 GBP for buyers at the higher end of the property market.

Employment and Training

Darling has stated that the scheme to provide work or training to people under 24 who have been out of work for over six months will now continue until 2012. This was originally set to end in March 2011. At the other end of the age spectrum, the amount of time that over-65 year olds have to work to receive work credits will be reduced.

UK Businesses and the Public Sector

To support UK business, the Labour Party will fund small businesses to boost skills and encourage innovation with 2.5 billion GBP. Furthermore, investment allowance for small firms is set to double to 100,000 GBP. One-year business rate cuts from October will also be introduced to help 500,000 companies. In light of the recent bad weather, the Chancellor states a pledge of 385 million GBP to maintain road network.

Already in the pipeline and stated in the pre-budget report released in December is a cap of 1% on public sector pay rises for two years from 2011. However, in today's speech, Alistair Darling proposes funding for 20,000 new university places in science and math. A 3.5 million GBP enterprise fund has also been introduced to help university-launched businesses. On the green front, a 2.5 billion GBP investment bank was outlined to back low-carbon industries such as transport. The pensioners' higher winter fuel payment of 250 GBP and 400 GBP for the over-80 category has been guaranteed for yet another year.

The government is on track to achieve 11 billion GBP efficiency saving targets. Another form of saving identified in the report is to relocate 15000 civil servants to outside of London.
In light of the recession, Darling commented that the economy has contracted by 6% and predicted a growth of -1.125% in 2010. Downgrade growth has been forecasted for 2011 to 3-3.5%.

Alcohol and Tobacco Duty

The Chancellor stated that there would be a 3p fuel duty rise to be phased between April and January 2011. Duty on cider was also to rise by 10% from Sunday while wine, beer and spirit duty will increase by 2% a year until 2013. Tobacco duty will be upped by 1% this year and 2% a year in future years.

The speech ended with the Chancellor making an appeal to voters to stay with the Labour party in the upcoming election. "The choice before the country is whether to support those whose policies will suffocate our recovery and put our future at risk, or support a Government which has been right about the recession, right about the recovery and is right about supporting the people and businesses of this country to build a prosperous future."

The Time Has Come for the Green ISA

2010-03-24T00:00:00Z

With climate change constantly in the headlines, 'green' is becoming both a business profit opportunity and a mainstream investment trend. Environmentally-friendly investments will present some of the key opportunities over the next decade according to investment experts, so consider factoring them into your ISA portfolio.

Recent research by the Cooperative shows that 13 per cent of investors will make more ethically-focused investment choices, and now that attitudes are changing towards climate change, the performance of the green funds are giving increasingly fruitful returns. So, although a green investment will make you feel like you're doing something good, it has every chance of satisfying your pocket as well as your heart.

An ISA, or Individual Savings Account, can take the form of either a cash ISA or a stocks and shares ISA. A green ISA in either category works in exactly the same way as the mainstream equivalent, with the same tax-free allowance - 7,200 GBP per year for everyone under the age of 50, and 10,200 GBP for everyone aged 50 or over. From April 6th of this year the higher allowance will be applicable to everyone.

Finding an ethical ISA involves shopping around to find a bank or financial institution that makes ethical investment choices for their investments. If you're an experienced investor, you could use a self-select ISA to invest in companies whose principles you like. The FTSE4Good index of companies could be a starting point, as a company must be working towards environmental sustainability to get into the index. You can also look at YourEthicalMoney, which rates the UK's financial services providers on their social conscience.

There are also funds that have a specific green or environmental focus and invest in companies whose products or services contribute to the restoration and renewal of the environment or to a cleaner and healthier environment. Other ethical funds simply avoid investment in companies associated with morally-dubious areas such as gambling or arms trading. These also make assessments of environmental impact.

In an effort to help customers make the right choice, National Ethical Investment Week (NEIW), co-ordinated by UKSIF (UK Sustainable Investment and Finance Association) did a mystery shopping exercise on 15 fund supermarkets and discount brokers to reveal the best of the bunch.

Fair Investment Company and Smile have been named the top UK fund supermarkets for green and ethical ISA funds. They were both awarded the maximum score of 10 out of 10 and given a five-star rating. The stars were based on availability, access and insight into green and ethical funds. Hangreaves Lansdown and Interactive Investor were awarded a four star rating. The others were Barclays Stockbrokers, Bestinvest, Cavendish Online, Chartwell, Chelsea, Fidelity, Selftrade, Share Centre, TD Waterhouse and Willis Owen who all scored three stars.

Penny Shepherd, MBE and chief executive of UKSIF says that "with savvy investors now going direct to secure their ISA allowance, fund supermarkets are waking up to the growing interest in green and ethical investments. The high rating for a number of fund supermarkets highlights the high quality information and guidance available to investors who want to make money and make a difference".

"Green and ethical investing has changed a lot since its early days. Today, the options include climate change funds, environmental markets funds and broader sustainability themed funds as well as the most traditional negatively screened choices, which often exclude industries such as tobacco, nuclear power and defence."

According to NEIW, the four and five star rated fund supermarkets and discount brokers stand out as they make it easier for investors to identify green and ethical funds, providing resources that help investors understand the options available to them. For example, they provide up to date guides that explain the range of options and/or offer a filter tool that helps investors identify relevant funds. Investors can now choose funds that will make a positive impact, such as those that focus on cleaner energy and health. You can see the results of the NEIW survey here.

There is still time to take advantage of your tax-free ISA allowance for this year, but you need to act fast! All applications must be received by 1st April in order to be processed, so you should aim to have the application in by Monday 29th March (because of the Easter bank holiday). Investing in a stocks and shares ISA constitutes a risk to your money so make sure you have researched your options thoroughly before proceeding.

Start your research by checking out Virgin Money's popular Climate Change ISA.

Is the 'Robin Hood Tax' Fair?

2010-03-24T00:00:00Z

The Robin Hood Tax campaign is a movement brought together by 50 groups including Oxfam, World Development Movement, Trade Union Congress, UNICEF UK and War on Want. By taking an average of 0.05% from banking transactions, the movement is effectively campaigning for banks that caused the financial mess to pay to clean it up. It proposes that the revenue earned would be split between social welfare such as the NHS, funding international commitments such as the Millennium Development Goals and tackling climate change.

However, the proposal to tax bank transactions has been condemned by a leading expert on business taxation. "The Robin Hood Tax is a misnomer. Banks will pass the tax onto their customers and everybody in the economy will be indirectly affected. An increase in VAT rates, however, will raise large amounts of revenue effectively," said Michael Devereux, director at the Oxford University Centre for Business Taxation.

The tax derives from the Tobin Tax. Named after the American economist, James Tobin, the Tobin Tax is a tax on currency transactions devised in 1972. Unlike the Tobin tax, the Robin Hood Tax focuses on revenue generation rather than speculation.

A snapshot of today's public vote on the Robin Hood Tax website shows that 72,582 people have voted in favour of the Robin Hood Tax while 6,976 have voted against it. Despite recent allegations by the Robin Hood Tax campaign claiming that Goldman Sachs has rigged the internet poll with more 'no' votes, so far the tax has been popular with the public.

The campaign has gathered momentum, with world figures such as Gordon Brown, Angela Merkel, Nikolas Sarkozy, Joseph Stiglitz, Jesse Jackson and most recently, the Japanese foreign minister backing it. An estimated 17% of MPs are now in favour of the tax, the campaign reports, and an early day motions debate was scheduled at the House of Commons on 10 March about the Robin Hood Tax.

Julian Oram, head of policy at the World Development Movement charity argues that the tax would
discourage risky trading practices that have emerged over the last five years and reduce volatility in the markets. "The tax would be levied on all bank trades ranging from shares to foreign exchanges and derivatives to raise as much as 250 billion GBP a year. Although Obama's proposal to break up the banks could be an effective strategy, the Robin Hood Tax is more socially acceptable."

However, a London-based Goldman Sachs equity derivatives senior analyst does not see the Robin Hood Tax as a feasible or fair system. "The banking industry is not a charity fund", she said. "These large transactions boost the economy and incentives on them should not be lost. The 'super tax' should serve its purpose and is enough."

The 'super tax' in question is the tax issued by the government to stop banks from using profits to pay large bonuses to bankers. A one-off 50% tax rate on bonuses that exceed 25,000 GBP was enforced in the UK. However, financial transaction taxes have already been in existence at the national level in the UK. A 0.5% stamp duty on share transactions has been in force while the US has already implemented a small transaction tax to fund the Securities and Exchange Commission.

The British Banker's Association (BBA) has also questioned the proposed tax. "Banks would end up being collectors of this tax while customers will bear the cost of it. The campaign needs to outline how the Robin Hood Tax will not have an adverse affect on the economy", said BBA spokesperson, Brian Mairs. "At present, banks are already paying for what has happened with higher interest rates."

A World Economic Forum poll revealed that over two-thirds of people believe the current economic crisis is also a crisis of ethics and values. It points to a trust deficit regarding values in the business world. At the 40th World Economic Forum Annual Meeting in Davos last month, Josef Ackermann, chairman of the management board and the group executive committee of Deutsche Bank said, "If you have lost the trust of societies, you cannot respond technically, you have to respond morally."
The International Monetary Fund has confirmed that it will present a report on the options for recovering the costs of the public sector given to the banking sector including a financial transaction tax for the G20 meeting in June 2010.

With The Guardian's recent report on a 1% cap on public sector pay for two years proposed by chancellor Alistair Darling, Oram said, "The public sector is taking a real hit. It's time the finance industry acknowledges its social responsibility. If monitored by the G20 countries, the Robin Hood Tax is a quick win to solve the budget deficit."

In yesterday's budget report, Alistair Darling stated that he is backing such taxation on banks but stresses the need for global effort. He addressed a group of protestors who were clothed in the swashbuckling outlaw's outfit. The campaigners will protest through Westminster carrying letters to the chancellor on kick-starting an international agreement.

However, Devereux calls for a tax system where the cost of the tax is fairly distributed. He said, "If you want to tax banks so that they don't repeat the same mistakes that lead to the financial crisis, then a tax related to their indebtedness should be formed. Highly indebted banks should pay more tax than a less indebted bank. You can identify these banks by looking at the financial assets and liabilities of the banks." The debate continues.

Are You a Member of the 'Facebook Generation' where it Comes to Money?

2010-03-24T00:00:00Z

Recent research by Tesco Bank shows that 21-35 years olds have no qualms about sharing "love, life and money", and are happy to reveal details of their earnings and savings. Unlike previous generations for whom money has traditionally been a difficult subject to broach, this age bracket - dubbed 'the Facebook generation' - see no problem with discussing their finances.

The moniker stems from the keenness of younger generations to lay bare their lives on social networking sites such as Facebook and Twitter. Growing up with this level of openness seems to have led to a breakdown in the social conventions that prevent talking publicly about money.

The research shows that 80% of couples aged between 21-35 regularly discuss money management, which is an encouraging development considering the detrimental effect that debt can have on a relationship if kept secret. Similarly, 75% would happily discuss the value of their life savings.

The consequences of keeping schtum about money worries have been well-documented. Finances are a factor in many break-ups, and recent FSA research shows that up to 24% of UK adults are hiding some form of credit from their partners. So, on one hand it is positive that many younger couples are comfortable revealing all about their financial situations, but on the other, it's essential that these discussions are constructive, and truthful.

Make sure your financial expectations and priorities are aligned when you live with a partner. This is particularly important if you plan to pool all or a proportion of your incomes. Do you both prioritise savings? What kind of spend is acceptable on holidays, cars and clothes?' Do you share the cost of going out together?

To find out how compatible you are in terms of how you spend your earnings, each make a list of monthly 'musts' and 'nice-to-haves', and see how they compare. If necessary, agree on compromises that you can both make to ensure that you pre-empt any potential spending conflicts. It's also important to bite the bullet and reveal any niggling debt issues to your partner.

If you need help with your debt and don't feel comfortable discussing the situation with your other half, there are specialists you can talk you. Fill out our short debt management form to request a callback from a specialist who can talk you through your options.

Five Ways to Teach Your Children about Money

2010-03-18T00:00:00Z

It has never been more important to ensure that kids have a great financial education. Learning about money from a young age undoubtedly leads to better financial management and making better choices when the child is older.

Many people are discouraged from teaching their own children about money, feeling that it is a complicated subject best taught at school, or when they are a bit older. However, there are a number of practical ways to demonstrate the use and value of money at home, without having to get technical.

Here are some tips for ways of teaching your children about money. We've used a child of 7 as an example, although younger kids can also pick up the concept of using money once they have learned to count. If you have any other tips, please share them at the end of the article!

1. Show and Tell

Sit down with your child and show them the different notes and coins, and explain what each of them is worth. Invent some basic scenarios such as going to the shop to buy sweets, and ask them to work out which coins they would need to give the shopkeeper to buy different combinations of sweets. Getting them thinking about the value of individual items is more valuable than simply giving them money to hand over at the counter.

2. Give them Pocket Money and 'Piggy Bank' Money

If you've decided to give your child pocket money to buy sweets and toys each week, encourage them to set aside a small amount to put in a piggy bank (or a transparent container so they can see the coins build up) each week. They will be able to see the value in not spending the full amount they are given when finally they can use the money they have saved to buy a toy they have been waiting for.

3. Encourage them to Set Longer-Term Financial Goals

If there is something that your child is passionate about, such as getting a new pair of football boots, or perhaps learning to ride, get them involved in saving towards this goal. Explain that they are going to be earning money towards their lessons or equipment, and how much you will pay them for doing certain tasks.

These tasks can be household chores or keeping their room tidy or anything else that requires a certain amount of work and dedication. Then, set up a bank account and pay their earnings in each week. If you set up an online account, you can even monitor the savings with them and your child can see their goal getting closer. This also gives you the opportunity to explain interest to them.

4. Beware of Teaching them 'Emotional Spending'

Try and avoid being within earshot of your child if you talk about impulse buys, or guilty spending. Linking spending with feelings can negatively affect their financial management when they are older. Instead, talk to them about things that you are saving up for, such as if you are making monthly payments towards a holiday.

5. Get your Child involved in the Household Shopping

Ask your child to help you plan the meals for a week. Show them how much you have to spend for a week's food shopping and take them along to the supermarket with you. Set the challenge of staying within the budget for the week (obviously for simplicity, it's best if this is a round number), and ask them to help with comparing brands for the best value, and buying the right amount of food for the week to avoid wastage.

Always pay in cash for shopping when you take your child along with you, so that they can see actual money being spent. Making spending decisions early on, and getting involved in the practical side of spending (rather than just buying sweets and toys) will give your child a more realistic attitude towards their own finances when they grow up.

Mind the (Spending) Gap

2010-03-17T00:00:00Z

A recent survey into the nation's spending habits, commissioned by comparison service Uswitch, has shown that the 'buy now, pay later' spending trend is having some worrying consequences for our financial health. Not only are 5.4 million adults spending more than they earn each month (an increase from 4.8 million in 2008), but it appears we are also plugging the spending gap with a variety of toxic solutions that only serve to make the problem worse.

One of the main issues is that the cost of living is increasing at a greater rate than people's incomes, not helped by the widespread pay freezes that have been a feature of this recession. 57% of employed people surveyed said that they did not expect a pay increase in 2010, which equates to around 5.4 million UK consumers.

When we consider that petrol prices are due to rise further, and that there is a good chance that we'll see a VAT increase in the next Budget, it's a fair assumption that living costs are more likely to go up than down. In total, 31% of consumers surveyed reckoned that they are worse off this year than they were last year.

So, how are we currently funding our lifestyles? Almost half (48%) of respondents claim to use their overdraft regularly. Credit cards are used by 34% (consumers were able to choose more than one option). Savings accounts are the third most popular source of funding, selected by 24% of consumers. Friends and family provided financial help to 19% of respondents.

With the exception of friends and family (assuming that you are not related to a loan shark), the top funding choices all put consumers at risk of sinking further into debt. Store card borrowing (5%) comes with an extremely high rate of interest, as does credit card borrowing once you are out of the interest-free period, and eating into a savings account for everyday expenses means that there is less to fall back on in the event of unexpected loss of earnings.

Clearly there is an immediate need for people to take control of their spending and find solutions that work in the longer-term rather than offering merely a quick fix. Credit cards should be used for emergencies, not everyday expenses such as rent, and store cards are best avoided completely. The 1% of respondents claiming to borrow from loan sharks to plug gaps in their finances is of particular concern, since these unscrupulous (and largely unregulated) lenders can charge interest rates in triple figures.

If you're regularly paying your rent using a credit card, you never get out of your overdraft or if more than 20% of your income is used up paying off the interest on your existing debts, it's time to take action. If our incomes are not rising to accommodate the increased expenses we're facing, there is an urgent need to deal with existing debt so that more of our incomes can actually be used for day-to-day living.

Start by writing down exactly how much you earn each month, and then make a note of all your fixed costs. Our household budget calculator may be helpful. Make a note of all the companies that you owe money to, and how much you can afford to pay them back each month (when your living costs have been taken out). If necessary, call your creditors and arrange some realistic repayment terms. In some cases, they may agree to lower or freeze your interest rate to help you with repayments.

If you would like professional help with your debt, you can fill out our short debt advice form and a debt professional will get in touch to talk you through your options.

Four Alternatives to the Emergency Credit Card

2010-02-09T00:00:00Z

Many people in the UK keep a credit card just for emergencies, but it can sometimes be too tempting to have between several hundred and several thousand pounds at your disposal, and extra spending on a credit card 'here and there' can quickly result in unmanageable amounts of debt unless you keep a careful check on what you use it for. Here are some alternatives to having an emergency credit card burning a hole in your pocket.

1. Get a prepaid credit card.

Many card providers offer a prepaid credit card that you use on a top-up basis, meaning that you only spend money that is actually yours to spend. Using a prepaid credit card has the added advantages of avoiding credit card-related debt-traps such as having your credit limit raised without your express consent and having high-interest credit card cheques sent to you through the post. Top it up with perhaps 20GBP or 40GBP each time you are paid until you have a few hundred pounds on standby for when you need it urgently. Don't pick a card that charges you a monthly fee, because you might not need it for several months. Do bear in mind that you will usually be charged for withdrawing money at a cash machine using a prepaid card, so keep transactions to an absolute minimum. Apply for one today through Virgin.

2. Consider a second current account.

Open a free current account with a small overdraft limit (make sure that you keep it to around 100GBP and say no to a 'buffer zone' where you could exceed the limit but are charged expensive fees for doing so). Keep your emergency card in a safe place, separate to the PIN, for use if your usual card is lost, stolen, or swallowed by a cash machine and you are unable to get to a bank branch. Unlike a credit card, the interest rate on your overdraft is unlikely to fluctuate, and it will be generally much, much lower than the rates charged on credit cards. You are also not charged that additional penalty fee if you have not made a repayment within a month - just make sure you keep that limit low, or even better, fund the account and stay in credit!

3. Get an Instant Access Savings Account.

This does not solve the problem of being without cash should you lose your bank card outside of branch opening hours, but gives you the flexibility to be able to access your money, the security of keeping your money safely in the bank and the added advantage of earning interest on your savings. Granted, you would earn a higher rate of interest if you agreed to lock your money away in a restricted-access account, but you could perhaps look to have one of these as well, for the longer-term savings. Pay a small amount into the account as soon as you are paid, even 15GBP a month will give you something to fall back on if you need money quickly.

4. Save 1 Pound each day.

This is for those who are disciplined enough not to dip into cash savings unless absolutely necessary. If you only lose your card once in 3-month period, this gives you a potential stash of 90GBP of emergency cash. Keep the money in a container without easy access, a piggy bank would do the trick!

Click here to read our guide to How to Save 50GBP per month. A few lifestyle changes will leave you with a bit more cash - which could be used for a useful emergency fund!

How to Save at least £50 a month (without getting a pay rise)

2010-01-28T00:00:00Z

One of the main reasons for the financial struggle in the week before payday is not a lack of money as such, it's a lack of organisation. With a small amount of planning you can get to the end of the month before your funds run out, and even have some left over. Below are some tips to get you off to a good start.

1. Have one less cappuccino a week and don't go at weekends

It's just one cappuccino, what harm can it do? Well, it can make quite a dent in your wallet for one thing. If you normally fill up on caffeinated froth every morning, plan to go without on Wednesdays, for example, and go cold turkey at weekends. Check out our free Starbucks habit calculator to see how much your coffee habit is setting you back (equally applicable to other coffee brands obviously!). In the SimplyFinance team, we were pretty surprised by our combined coffee spend and are now taking steps to kick the habit, or at least switch to instant.

2. Bring your lunch into work at least 2 days a week

Let's face it, we are all aware that making a sandwich is cheaper than buying one, especially when you're buying one of those elaborate ciabatta creations every day that will set you back a fiver a time. For most of us, the problem is not a lack of awareness, more a lack of time and a shortage of ideas. Well, it's time to get creative - a homemade lunch doesn't have to be a slightly squashed sandwich in your desk drawer. If your office doesn't have a microwave, bring in a thermos of soup and a big salad in an airtight container. There are some great ideas here, or just search online for 'lunch ideas'.

3. Shop online to avoid the 'magpie effect'

That's right, the moment when something shiny catches your eye, and the sensible winter scarf you went in for turns into three T-shirts (on offer) and a pair of boots. And whichever way you look at it, 3-for-the-price-of-2 is not a bargain. You didn't want three books, you wanted one book, and now you've paid double for it. The best way of avoiding the sneaky false bargains is to not put yourself in temptation's way. Shop online wherever possible, especially for groceries. In some online supermarkets, you can even keep all your regular purchases in one place.

4. Don't buy bottled water

According to consumer champion Which?, tap water costs around 0.22p per litre. When you consider that bottled water starts at 8.5p per litre, and that we're advised to drink around 1.5l of water a day, the costs soon start adding up. It's easy to be swayed by the marketing on bottled water that promises clean, pure and natural water - UK tap water could make exactly the same claims. If you're skeptical, do a blind taste test, and see if you notice the difference. Another reason to switch to 'eau de tap' is an environmental one, think of all the empty bottles that go to landfill each year.

5. Use your consumer muscle

Now more than ever, the companies that provide your insurance need your business. This means that you are in the driving seat, and should see your approaching renewal date as the time to do some serious haggling. Many service providers actually employ 'retention' teams whose sole job it is to talk you out of leaving them. Look at how much you are currently spending on your home insurance, health insurance or car insurance, and set a target renewal premium. It is a good idea to shop around and talk to other providers before making that call - your case will be much stronger if you can get your current insurer to match another quote you have been given. You can request a callback from a health insurance adviser or a home insurance adviser by filling out the short forms - no obligation, free to use, and this will give you a clearer idea of what you can potentially get. One word of warning, all insurance policies are not equal, read the small print before signing up and don't skimp on cover for the sake of a few extra pounds.

6. De-junk your bank account

Are you actually reading the newspaper or magazine that you subscribe to? If not, cancel the subscription. Do you even remember what that monthly Ã?Â?Ã?Â?Ã?Â?Ã?Â£5 direct debit is for? If not, get rid of it, you could still be paying the insurance on a mobile phone that you cancelled a long time ago. Just as you would have a spring-clean of your wardrobe, go through your bank statement with a fine-toothed comb and ruthlessly get rid of anything that you are not using. Use the same logic for your banking 'extras' - if you're paying Ã?Â?Ã?Â?Ã?Â?Ã?Â£7 per month for breakdown cover and roadside assistance when you don't even drive, that's just not a very good deal, is it?

7. Buy own-brand medication

For every 'extra' and 'max strength' product on the shelves, there will be a generic equivalent, and it will have exactly the same effect because it contains exactly the same ingredients. Check the ingredients list on the back of your Anadin Extra, and then compare it with the equivalent own-brand painkiller in Boots, for example. The only difference will usually be in the price, and it may surprise you to learn that you could save Ã?Â?Ã?Â?Ã?Â?Ã?Â£2-3 a packet. However, if it is the pretty packaging that you go for, feel free to keep paying a premium!

8. Never pay full price for going out

One side-effects of the recession is that the voucher culture has exploded. People are going out less, so theatres, restaurants and cinemas are happy to offer deals to attract in the crowds. Try Toptable.com for deals on eating out, and any number of theatre websites can be found by searching online for the play that you want to see. The National Theatre has teamed up with Travelex to offer Ã?Â?Ã?Â?Ã?Â?Ã?Â£10 tickets to most shows, and Lastminute.com offers half-price cinema tickets on some weekdays (search under' Entertainment').

So what should you do with the money you have saved? There are a number of options for stashing your savings, so have a look at our pages on savings accounts, Cash ISAs and Stocks and Shares ISAs for a few ideas on getting the most out of your money.

How much is your Mortgage really costing you?

2010-01-28T00:00:00Z

When you buy a property there are a number of 'hidden' costs that you need to consider as well as the obvious ones. Buying a property is a complicated legal process requiring the involvement of various experts, including a surveyor, solicitor and conveyancer, so you will have to foot these additional bills for a start. This article details the main additional costs you will encounter when purchasing a property, to help you budget and make your purchase as streamlined as possible. You can also use our true cost mortgage calculator to work out your expenses.

Always read the small print on the mortgage rates

Although tighter controls have been imposed on consumer lending in the last few years, competition to attract new mortgage business is still fierce, and therefore lenders publish what seem at first glance to be extremely low rates. As many unfortunate customers of the Skipton Building Society found recently when the lender's Standard Variable Rate shot up by a couple of percent, a 'guarantee' of a capped rate is not necesssarily set in stone. However, be as prepared as you can by looking at the small print before agreeing to the deal.

Arrangement fees

There are other factors to take into consideration when calculating the actual cost of your mortgage. Is your mortgage broker charging an arrangement fee? This will typically be a percentage of the sum borrowed, although it could also be a flat fee. Not all mortgage brokers will charge you an arrangement fee as they get paid an introduction fee by the lender, but it is fairly common so make sure you ask them for full fee details before proceeding with the mortgage.

Valuation fees

A full property valuation is usually required by a mortgage lender before they will approve your application. This enables them to confirm the property's worth, something that is particularly important in the current financial climate when millions of consumers have seen the value of their property fall. Lenders sometimes foot the bill for the valuation themselves, although the cost usually falls on the consumer, and you should expect to pay between £100-200 for this service. An extra point to check with your broker or lender is whether the valuation fee is refundable in the event that your mortgage application is refused.

Surveying fees

It is important to have the property surveyed before you go ahead with the purchase, to protect yourself from making an unwise investment. There are two types of survey, the homebuyer's report and a full structural survey. The homebuyer's report is a more basic survey, costing about £300 and often included for free in the lender's service. This includes a check of the superficial condition of the house, making sure that there are no obvious faults.

Should you find evidence of structural damage, it would be wise to have the full structural survey (which would set you back about £800), because if you later find that you need to carry out serious repairs on the property as a result of any damage, the costs could be far greater. Any damage uncovered by this survey would enable you to push for a discount on the price, that would take any future repairs into consideration. Alternatively, evidence of significant damage or subsidence in the property would warn you against making an unwise purchase.

Stamp Duty

If you buy a property that costs more than £25,000, you must pay a Stamp Duty tax, which is calculated as a percentage of the total purchase price. This increases depending on the value of the property from 1-4%, so if the purchase price is between £125,001 and £250,000 you pay an extra 1% in Stamp Duty, if it is between £250,001 and £500,000, an extra 3%, and an extra 4% if the property costs over £500,000. If the property has a purchase price of £125,000 or less, you are exempt from paying Stamp Duty on the property. Use our Stamp Duty calculator to check the Tax payable on your new property.

Conveyancing fees

Conveyancing is the legal process by which ownership of a property is transferred from one person to another. This is carried out either by a solicitor or by a licensed conveyancer, and both buyer and seller need to have their own conveyancing representation to ensure that there is no conflict of interest. The conveyancer's role is to ensure that the terms and conditions of the contract are fair, and that all the financial information required for the sale is correct.

The conveyancing process can take several months to complete and the costs will vary depending on the company that carries out the work. When the Land Registry costs and other fees for searches are taken into consideration, the full cost of conveyancing can stretch to £600 or more. Due to the complicated nature of the work this process should only be carried out by an expert, so this would not be a good place to cut corners on your purchase costs.

Building Insurance

Lenders almost always require you to have home buildings insurance before they will approve your mortgage application. Buildings insurance protects you (and the lender's investment) should your house be damaged by fire, subsidence or extreme weather conditions such as floods, and would cover the costs of repairing or even rebuilding the property. Depending on the policy, some insurers will also pay the costs of temporary accommodation for you and your family while repairs are being carried out.

Although this insurance is compulsory, there is nothing to say that you have to buy it from your lender. Many insurers offer very competitive rates for buildings insurance (often with a reduced premium for home contents insurance if both are taken out together), so you can often get a much better deal by shopping around. The cost of buildings insurance will depend on many factors, including the size, age and condition of the property and whether you live in an area prone to flooding or subsidence.

If you would like to talk through your options with an experienced mortgage adviser, you can request a free mortgage quote by filling out our short mortgage form.

Fixed Rate Mortgages now seen as a safer option than a Tracker

2010-01-21T00:00:00Z

As many as 4,800 people could choose to remortgage each day over the next six months, according to research by retail and commercial bank Santander. Due to expected increases in the Bank of England base rate over the coming months, many homeowners could opt to make the most of fixed rate deals rather than taking a risk on a tracker mortgage.

The research comes from Santander's Mortgage Remo Index, which monitors monthly remortgaging trends. They have found that as many as 880,000 people in the UK could be coming to the end of their mortgage deals over the next six months and will need to make the decision about who will manage their home loan from then onwards.

Phil Cliff, Director of Mortgage Marketing at Santander UK commented: "A significant number of people could remortgage in the next six months and among those considering their next deal there is a potential for a fall in demand for tracker deals.

"Borrowers have seen a large number of highly competitive fixed deals come on to the market recently and with many commentators predicting a base rate rise this year, homeowners now seem more inclined to play it safe with a fixed rate deal."

According to the research, over half (51%) of homeowners who will be remortgaging in the next six months say the factor that will most influence their decision on which deal to take is the opportunity to take advantage of a good rate. This is followed by the opportunity to make under or overpayments (9%) and speculation that the Bank of England's base rate will go up (6%).

If you are planning to remortgage and would like to talk through your options with an authorised mortgage adviser, please fill out our short remortgage form. We will then connect you with an adviser who can give you a free, no-obligation quote based on your financial circumstances.

How Healthy is Britain?

2010-01-15T00:00:00Z

Health Insurer Pru Health carries out a twice-yearly survey into the health of the nation, called the Vitality Index. The research aims to pinpoint any areas of concern, and also to find out where improvements have been made. The January 2009 research shows that the same number of adults (69%) as before claim to be in good health, although worryingly, the number of adults who say that their lifestyle is unhealthy has increased from 14% to 18%. In real terms, this means that an extra 2 million people feel that their lifestyle has become less healthy, in just 6 months.

-->> Click here to get a quote on Private Medical Insurance today.<<--

Dr Grainger, who carried out the research feels that the findings may be directly linked to the falling incomes and redundancy that have become an unfortunate feature of our economic climate, since the healthier options are often less affordable. Mintel research from October 2009 shows that gym memberships have also become disproportionally expensive, and this will be a deterrent for many.

Perhaps a sign of the post-Christmas blues, the PruHealth research also shows that over 50% of adults are unhappy with their current weight. Of those adults who admit to being stressed, 50% say that their stress is affecting their home life. 20% also say that their work is being affected by their stress.

61% of people admit that they should do more about their health, and as many as 81% of us state that we know what we should and shouldn't do in order to stay healthy. The smoking ban, and the increase in focus on health issues in the media will have helped to raise our overall awareness of our health. However, overall, it seems that people are not taking as much care of themselves as before, with only 13% of people visiting their GP regularly.

The report draws the conclusion that incentives may be needed in order to encourage people to live healthier lives, exercise more and make choices that benefit their health and wellbeing. When the survey respondents were asked what would motivate them to change their lifestyle, 'being diagnosed with a health condition' came top, followed by 'rewards and incentives for improving health' and 'a close friend/family member being diagnosed with a health condition'.

Some private health insurance policies do reward you for exercising regularly and making healthy choices, because if you are healthier you are less likely to claim. The reward in this case would be cheaper premiums. Many health insurance policies focus on preventative care, that is, keeping you healthy, rather than curing illnesses. If you are interested in finding out more about how much health insurance could cost you, and what incentives you might be offered, please fill out our short form. We'll connect you with a qualified health insurance adviser who will talk you through your options and provide you with a free and no-obligation quote.

How being a Greener Driver can save you Money

2010-01-14T00:00:00Z

It's a common misconception that making more environmentally-friendly choices costs you more. In fact, with hundreds of new 'green' financial services products on the market each year, the cost of being a more conscientious consumer is actually decreasing.

There are also a number of ways to be a greener, cleaner road user every day by making small changes to the way that you drive. An awareness campaign carried out by the EU estimates that the average driver can cut their car's fuel consumption by an impressive 30% simply by adopting 'eco-driving' techniques.

Some examples of more environmentally-friendly driving include avoiding harsh acceleration (high engine speeds use more fuel and increase your carbon emissions), and switching off your engine when you are stationary and it is safe to do so, such as in long traffic light queues.

You should check that your tyre pressures are correct to improve the fuel economy of your car - under-inflated tyres increase the rolling resistance of your car, meaning that the car has to work harder to reach the same speeds than if your tyres were properly inflated. You can find details of the optimum tyre pressure for your car in the owner's manual. Remove any unnecessary weight from the car (such as a roof rack that you do not use), and avoid using air conditioning or electrical devices such as phone or music player chargers where possible.

Other top tips to make your car more fuel-efficient and save you on petrol money include using high-quality fuels and oils that keep the car's engine clean and keeping your car properly serviced. Keeping to the speed limit is not only safe but also improves your fuel consumption.

If you own a 'green' car, that is, one that emits lower levels of carbon dioxide than standard vehicles, or if you are a road user and would like to offset your carbon footprint, there are products available to help you do this without breaking the bank.

Warranty Direct, the UK's largest direct to consumer car warranty provider, has created the Green Warranty, which gives you extended warranty protection against unforeseen repairs beyond the manufacturer's warranty date and also allows you to offset your carbon emissions at no extra cost.

For example, a MINI One comes under Tax Band C with emissions of 128g/km, or approximately 2.3 tonnes of Carbon Dioxide for every 10,000 miles travelled. With a Green Warranty, the company's comprehensive ExtraCare cover would cost £237.11, of which £23.69 is donated in a carbon offset contribution to the Carbon Footprint UK Tree Planting project. For more information about a green warranty or to get a free quote, please visit their website.

Why it's cheaper to Borrow than it is to Save

2010-01-14T00:00:00Z

With mortgage interest rates still at historic lows, and with the lending criteria becoming tougher than a round on University Challenge, lenders have had to reduce the mortgage rates in order to attract new borrowers. But how to plug the shortfall?   

According to new figures published by information provider Moneyfacts, many providers are cutting the rates of interest that they pay out on savings accounts in order to avoid losing money. The data shows that as recently as November 2009, banks were keen to attract new savers and therefore were offering particularly attractive introductory rates.

At the peak of the saver recruitment drive, interest rates were offered that amounted to 10 times the base rate, according to Moneyfacts.   Ever since however, the interest rates have been falling sharply, whilst mortgage interest deals have been getting increasingly competitive. Michelle Slade, spokesperson at Moneyfacts.co.uk, commented: "Providers must strike the right balance between savers and borrowers in order to maintain their balance sheets. No provider will offer market leading deals to both at the same time.

 "Competition is slowly returning to the mortgage market with LTVs and product numbers increasing and rates falling. Many savers have just experienced their worst ever year's returns and 2010 is not shaping up to be much better. The only benefit is likely to come from the forthcoming ISA season that will see providers battling it out to attract savers' tax free allowances."

The data provider looked at a range of savings options, across Instant Access savings accounts (where you have no restrictions on withdrawing your savings), Individual Savings Accounts (ISAs) which offer tax-free savings and savings bonds. As many ISAs pay returns at the end of the tax year (on the 5th of April each year), there is likely to be a rush to encourage consumers to deposit their lump sum savings before the deadline.   

If you have your money in an instant access savings account and you are disappointed with the returns that you have seen this year, there is plenty of time to move your savings to an ISA in order to benefit from this year's tax allowance. Another light at the end of the tunnel for savers is that from the start of the next tax year (6th April onwards), the tax-free ISA allowance is going to increase for everyone (it has already increased for savers over 50) from £7,200 to £10,200. Visit our Tax-free ISA allowance article to find out more about this.

Lowest levels of Income needed for Mortgage payments for five years

2010-01-13T00:00:00Z

If you have just bought a house, or are in the process of completing on a property purchase, you may be interested to know that in November last year home buyers had a record amount of spare cash left in their pay packets after making the monthly mortgage payment.

New data released today by the Council of Mortgage Lenders (CML) shows that the amount of income that home buyers in November needed to use for mortgage payments was a at a record low. Typically people buying properties at the end of 2009 needed only 10.6% of their gross income each month to meet their mortgage payments, down from 11.1% in October of last year.

Commenting on the data, CML director general Michael Coogan said: "It is encouraging to see that mortgage interest payments are so affordable for home movers and first-time buyers. But with substantial deposits still needed to secure a mortgage, the market will continue to be relatively restrained for some time to come.

"With refinancing still unattractive or unnecessary for many borrowers due to continuing low rates, we are now seeing a much more house purchase-focused market, a profile much more like the beginning of the Noughties than its latter years." There were 53,000 house purchase loans granted in November, with loans to pay for new house purchasing accounting for 60% of all new UK lending in November, the highest proportion since 2001.

Remortgages have gone the other way however, due to the tight lending criteria and the fact that with the interest rates as low as they are. For many people, their current mortgage deal cannot currently be beaten. If you'd like to receive a free quote on a remortgage, please fill out our short remortgage form to be connected with a qualified adviser.

For those looking for either a first time buyer or a next time buyer mortgage or a remortgage at the moment, there are plenty of deals to be had, with many banks and building societies offering free valuations, cheaper arrangement fees and even offers on home buildings insurance. When deciding on whether a mortgage offer presents a good deal, make sure you take all of the costs into consideration. Read our article about calculating the true cost of your mortgage.

For a free, no-obligation mortgage quote, please fill out our short mortgage form and we will connect you with a professional, authorised adviser.

Want to get fitter and save Money? Ditch the Gym Membership

2010-01-08T00:00:00Z

It's that time of year when our collective overindulgence during the holidays has sent us all running to the treadmills, planning a 5-times-a-week workout schedule as a form of penance for eating too much turkey and stuffing. However, data from market research group Mintel shows that in fact, we might be far better off - both financially and health-wise - if we simply tried incorporating more exercise into our daily routines.

For a start, a gym membership is expensive. The Mintel report shows that the average revenue that a UK health club makes per member stands at £442 (including VAT) or about £37 per month, although it also makes the point that the fees can be far higher at some of the major health club chains such as Fitness First, LA Fitness or Nuffield Health.

Because health clubs know that the urge to get fit is highest after the festive season, 20% of all advertising is carried out in January (Mintel/Nielson). If you are considering joining a gym, the one benefit of being bombarded with all this advertising is that the health clubs have to compete for your business, and many offer incentives such as waiving the joining fee (usually around £70) or offering free months.

After the flood of signups in January, the usual pattern is that by the time that the summer comes around, people's spend on gym attendance drops significantly because of summer holidays and the fact that it's more pleasant to exercise outdoors. Then in September and October, the attendance picks up again as we all flock to exercise indoors as the long winter nights draw in.

If, like 58% of the population (Mintel) you find that 'exercising in the gym is quite boring or repetitive', or are part of the 48% that lose interest after several weeks, it definitely does not pay to sign up to an expensive yearly contract. If you imagine that you're spending an average of £37 per month, and then perhaps not going along to the gym from May through to August, you are wasting £148 each year. Also, if you go to the gym just once a week, each gym session is costing you almost £10.

In July 2009 consumers were asked if they had changed, or planned to change their exercise habits as a result of the credit crunch/recession (Mintel). 23% of respondents had already cancelled their membership with a further 6% planning to. 38% said that they did exercise that did not require fees, such as jogging outdoors, cycling or exercising at home. People who have cancelled their private health club membership are most likely to be from the 25-34 age range and to have pre-school age children, so increased financial pressures are likely to be a deciding factor.

The most popular type of health club in the UK at present is the public leisure centre, with 25% of all gym-goers choosing to use these facilities (GMI/Mintel). The main attraction of a public gym is the flexibility, you are usually not tied into a yearly contract, meaning that if you do decide not to go, you are not penalised financially.

So what are your options if you would prefer to save the money on gym membership but still make healthy changes to your lifestyle? Within your daily routine, you could decide to walk more, perhaps using Google Maps or a similar service to plan a route to work. Opting to take the stairs at work rather than the lift would provide further benefit.

To avoid the pressure and guilt of a contract gym membership, find out about public health clubs in your area where you can pay as you go. You can find a list on the website of your local council. Alternatively, join a local pay-as-you-go sports club, for example to play football, hockey or netball. You would have the added benefit of a new social scene, which would incentivise you to go regularly.

And how to save money if you are dead-set on heading to the gym? Some health insurance plans will give you free or vastly reduced gym membership when you sign up (to encourage you to stay healthy), so this could be a cost-effective option. Click here to apply to speak to a health insurance adviser and find out more.

If you have work colleagues who are also keen to join, band together and ask for a reduced corporate rate - you'll also probably have more motivation to go along if your workmates are also there. Also, don't be afraid to bargain at the health club, they want your business and are likely to offer you a discount if you ask.

Of course, the more you use the gym the more cost-effective it becomes. If you do plan to go regularly, it is a great way of meeting people, and means that you are likely to spend less time on unhealthy and expensive pursuits like drinking in the pub. However, if the gym is not for you, or finances are tight, you should be aware that there are many other options available when that mince pie-fuelled guilt comes around each January.

Get Prepared for 'the Coldest Winter in 100 Years'

2010-01-07T00:00:00Z

According to the Met Office, we should expect it to be 'bitterly cold' over the weekend. Richard Young, Chief Forecaster at the Met Office says: "Temperatures will struggle to rise above freezing across most of the country by day, with severe and penetrating frosts at night. Sound like fun? Now imagine if your pipes burst or you lost electricity over the weekend. If you have not already prepared your home for the cold, now is the time to do so.

Firstly, you should consider home emergency cover, to ensure that if you do have problems caused by the freezing temperatures, they can be sorted out quickly and at minimal expense. Figures from Halifax General Insurance show that one in six of all home insurance claims to Halifax between Dec 19th and Jan 4th December were due to burst pipes. This is an increase from the one in ten calls during the first two weeks of December.

Pipes burst due to water expanding when it freezes, causing pipes to crack open. Then, when the weather warms slightly, the pipes leak water. Halifax Senior Claims Manager Martyn Foulds says: "The average cost to repair damage caused by a burst pipe is around £2000, so it is worth ensuring the home is properly insured, taking steps to prevent frozen pipes, making sure you have adequate insurance in place and also knowing what to do to limit damage if a pipe does burst."

So how should you prepare for the cold this winter? Firstly, you should consider taking out a home insurance policy which includes home emergency cover. Click here to speak to an independent adviser and get a home insurance quote today.

Secondly, you should make sure that your loft, waterpipes and the sides of your water tank are insulated. Locate the stop tap in your house for the water mains, so that if the pipes to burst, you can easily turn off the water supply and limit the damage to your home and belongings.

You should also keep a kit handy in your home to be used in emergencies, such as being snowed in. This should include a torch, spare batteries and bulbs, warm clothes and blankets, wellington boots, tins of food and a shovel. You should also keep your home insurance details close to hand, including the number that you need to ring for a home callout. When you have emergency home cover, the insurer should have a 24-hour emergency helpline.

Get a free home insurance quote by filling out our short form and speaking to an adviser.

Is Home Ownership now less of a Status Symbol?

2010-01-05T00:00:00Z

It seems that one of the effects of the recent property market crash is that more people are choosing to rent, rather than take on a potentially risky housing investment. According to professional advice site Unbiased.co.uk, over 1.75 million homeowners would now consider selling their home in order to start renting.

So what are the main reasons for this shift in the attitudes of British homeowners? Almost a third of those renting (31%) have found that renting gives them more freedom, and that home ownership - or rather, the mortgage that is a feature of house purchasing for many Britons, often presents more of a financial burden than a form of security.

12% of homeowners no longer feel that owning their own home represents a status symbol, and therefore do not aspire to climbing the property ladder to the same extent as before.

As a measure of exactly how much attitudes have changed, 32% of the 1.75 million homeowners wavering about whether to sell up stated that they would not have considered this as an option in the past. A further 31% said that the price that they would get for selling their property would be too low to make it worth considering.

Interestingly however, British renters do not seem to have been put off to the same extent, with 13% of renters stating that they still hoped to purchase their own property. This enthusiasm for home ownership seems fairly concentrated in the 18-34 age bracket, with 22% willing to buy as compared to only 6% in the 35-54 bracket.

For those who have seen the values of their properties plummet in recent years, there is clearly plenty of trepidation about borrowing money for an unstable investment. Renters on the other hand seem to still place a certain value on the ownership of property, perhaps considering it still to be a form of security as Britain slowly comes out of recession.

Karen Barrett, Chief Executive of Unbiased.co.uk comments, "While there are mixed messages as to whether house prices are now starting to rise again, it is clear that the property market crash has had a profound effect on the way people view their homes. For many who own their own home, the worry and stress of this through the property market volatility has caused them to re-think about whether long-term renting is a viable option for them."

"It has also caused renters to think about their long-term options, and while some still want to get on the property ladder despite the recent crash, many have now decided that the British status symbol of owning your own home no longer has the same importance. For those renters who are still looking to get on the property ladder, especially first time buyers, it is vital that they see a whole of market mortgage adviser to ensure they are getting the best possible advice from the whole of the market.

If you would like to talk through your options with an experienced whole-of-market mortgage adviser, please fill out our short mortgage form.

Protect your New Car with an Extended Car Warranty

2009-12-22T00:00:00Z

New research from Auto Trader reveals that the imminent rise in national VAT will have a significant effect on consumers in 2010, with 30% of people admitting they will be forced to reconsider their spending habits.

Unfortunately, if you are looking to make a large purchase such as a new car in the New Year, you will be among the hardest hit by the VAT rate reverting to the previous level of 17.5%.

If you are having to spend more than you wanted on your car purchase, you should consider a car warranty in addition to your standard car insurance policy, as this will protect you from any additional expenses that you may incur if your new toy is damaged or does not wear as well as expected.

Every new vehicle comes from the manufacturer with a basic factory warranty. This agreement states that the manufacturer will repair or replace any part of the vehicle in the event of a mechanical malfunction for a limited period or limited number of miles. However, once this warranty expires you have nothing to protect yourself from expensive vehicle repair costs. Companies such as Warranty Direct will protect you for a specified amount of time and/or mileage.

A car warranty also gives you the flexibility to get repair work carried out wherever you want, meaning that you can shop around for a price that you like at a garage you trust. As with any type of insurance, there are varying levels of cover when you buy an extended car warranty, and it's absolutely essential to read the small print so that you know exactly what is included in the policy.

A basic level of cover will protect you against mechanical breakdown - that is, for faults arising from the engine, ignition, gearbox, steering and suspension. A more comprehensive car warranty will also include you for damage to the bodywork and to the interior of the car, and general 'wear and tear' that would otherwise cost you significant amounts to deal with. You can also be use your car warranty to claim back garage costs in excess of £200 per hour, and receive a contribution towards car hire and overnight accommodation as a result of your car breaking down.

As you'd expect, a basic level of car warranty cover will cost you less, but if you did want to take out a higher level of protection you could counteract the additional cost by agreeing to have a voluntary excess on the policy. This means that if you did need to make a claim, you would have to agree to pay a certain amount upfront before the company would pay for the remainder of the work.

Click here to visit the Warranty Direct website and get a free car warranty quote today.

Are you taking full advantage of your Bank?

2009-12-22T00:00:00Z

The majority of us have at least one bank account, but are we making the best use of our banking?   Since the introduction of online banking and text banking, and with contactless bank cards set to revolutionise the way we pay in 2010, even the most low-maintenance of bank customers can find some extra benefit. Here are some quick tips to help you get the most from your bank.

Get text banking set up

  Do you know how much is in your bank account right now? Have you ever had to take a trip to a cash point to check whether you have been paid? Text banking, now offered by most of the high-street banks, really helps to keep you aware of what is going on in your account.

Sign up either for alerts either whenever a transaction is processed, or for a weekly 'digest' of all your transaction, and you'll be able to see in an instant if there is anything that you do not recognise or if you are low on funds.
 
Use your direct debits and standing orders 

If you're still paying off your credit cards or paying your phone and utility bills by cheque or by card over the phone, you are giving yourself unnecessary hassle. Setting up a direct debit (a varying monthly payment) or standing order (a fixed monthly payment) for each service provider to whom you owe money would enable you to pay your bills at a scheduled time, with no danger of you forgetting to make the payment or leaving it too late and incurring a fine.

Depending on when you set up your phone contract or opened a credit card account, you may find that your bills are due towards the end of the month. If like the majority of folk in full-time employment, you are paid on the last working day of the month, you may then struggle to pay bills on the cash that you have left. Instead, set up direct debits or standing orders to go out as soon as you are paid. This leaves you in no doubt about the funds that you have left to spend, and means that you can therefore budget for the month much more effectively. 

Use your overdraft facility  

So you have no overdraft facility agreed with your bank, and yet you regularly spend money on a credit card? If this is the case, you're probably paying far more money in interest than you need to be. Banks have recently come under fire for expensive charges on unauthorised overdrafts, but if you agree a limit with your bank and stick within it, you can enjoy a much lower rate of interest than you would on a credit card.

  Put your spare cash in a savings account 

If you have leftover money at the end of the month, don't just leave it to build up in your current account. Current accounts are not designed to offer a competitive rate of interest, so you could be losing out on extra cash by keeping it where it is. You have a number of more profitable options available; either put the money into a savings account (instant-access savings accounts would enable you to take it back out whenever you need), or lock it away in an Individual Savings Account (ISA) where any interest you earn would be tax-free.   

If you want to introduce an element of risk and reward into your savings, you could also choose to invest the money or buy some premium bonds. Just don't leave the money in your current account, make it work for you instead - and if you do plan to invest in stocks and shares, always seek professional advice first.
 
Link your bank account to your mortgage  

If you have savings already and are paying off a mortgage with your bank, look into whether you would be better off moving to an offset mortgage. This type of mortgage allows you to enjoy a lower rate of interest on your repayments by counterbalancing your debts against your savings. If you have money saved in the bank, have a chat in-branch or look online for available offset mortgage deals that may save you a bit of money each month.

Alternatively, you can request a callback from a qualified adviser within the SimplyFinance network for a free, no-obligation quote for an offset mortgage by filling out this short form.

  Don't pay for extras you don't use

  Many people took out a student bank account whilst at college or university and forgot to change over to a standard account after leaving. This means that you may have automatically have been switched to a graduate account offering extra services, such as breakdown cover or mobile phone cover. If these are services that you do not need - either through not owning a phone/car or through having the cover elsewhere already, you may be paying a monthly fee for thing that you are not using. Think carefully about whether you actually need the extras on your account, and if not, swap to a free or a cheaper one and spend the money on something you are actually going to use.  

Financial advice on your doorstep! 

Don't forget that there are a number of qualified financial advisers in your bank's local branch that you can make an appointment with, if you are in need of some help with managing your money.   Admittedly, they will only be able to offer you a limited range of financial products, and you need to be careful not to be talked into products that you don't feel you need. However, if you are looking for help with your budgeting, or you would like more information about ways for saving or investing your cash, make use of your bank manager's knowledge and experience.

The Easy Guide to Reading your Credit Card Statement

2009-12-21T00:00:00Z

Let's face it, credit card statements are not the kind of thing anyone looks forward to receiving in the post. Especially after a particularly expensive month it is tempting to slide them under the doormat/pop them in a drawer/feed them to the cat and pretend to have not seen them. However, you should never, ever ignore them, because you are costing yourself serious amounts of money by doing this.

Once you know what to look for on your statements, they are actually fairly simple to read. The trick is to open and pay each one as soon as it arrives (or as soon as you have the available cash), because this means that the credit card provider doesn't make any more money from you than absolutely necessary. Here is a Plain English guide to the terms used in your credit card statement, so that you can easily see what you owe and how the charges break down, and check over the statement for potential errors and overcharges.

Current Balance: This is the total amount that you have spent on your card. This will not just show the amount for the past month, but will include all spending on the card that has not been paid off.

Previous Balance: The amount that you owed in total last month. If you paid off the balance, or just some of the balance, this will usually be acknowledged on the statement with the phrase 'Payment received, thank you' and the date the payment was received.

Credit limit: This is the total amount that the credit card company has allowed you to spend on your card. You need to subtract your Current Balance from this credit limit to see what credit you have available. For example if your credit limit is £2,000 and you have a current balance of £1,500, you have £500 left to spend. Going over this limit will cost you a hefty fee, so keep a close eye on your limit.

Watch out for any letters from your credit card company informing you that they have raised your credit limit without you having asked for this to be done. This happens when the card companies want to encourage you to spend more on your card. If you get your limit raised, call and get it immediately reduced again. You don't need that kind of temptation.

Payment Due Date: Do remember that if the payment is due by this date, you need to have paid earlier than this. To be on the safe side and avoid a possible late payment fee, make your payment at least 3-5 working days before it is due. This gives the money time to settle in the credit card company's account.

If you make a payment later than the due date, you will be charged a fee. The size of the fee depends on the credit card provider, but it's usually quite large. If you have a reasonable explanation for why the payment is late, call and let the company know and they might waive the fee (in which case it would appear on your next statement as a credit).

However, they are much more likely to give you the benefit of the doubt if you are normally a prompt payer, so keep up to date with your payments wherever possible. Setting up a direct debit from your current account is one way to avoid late payments.

Cash Advance Fee: A cash advance fee is applied when you use your card to withdraw cash from an ATM machine, or purchase foreign currency on your card. Check the terms and conditions of your credit card provider, they'll always publish details of these charges.

As a rule of thumb, avoid using your credit card to take out cash wherever possible - it's an unnecessary expense if you can take out the cash for free on a debit card or in-branch.

APR: Short for the 'Annual Percentage Rate', this is the amount of money that you will be charged for spending money on your card over the course of the year.
The higher the APR percentage, the more interest that you are charged for using your card and therefore the more the card is costing you.

Sometimes, the APR will read 'x% APR (variable)' or 'x% APR (typical)'. The 'variable' or 'typical both mean the same thing - that this is the APR that they will charge the average card holder, but rates may vary if you don't make regular payments or pay back some, but not all, of the money you owe in a year.

Different rates are often charged for purchases and balance transfers too, and card providers usually offer a 0% rate on both for an initial period to tempt new customers. 'Variable' or 'typical' APR is just a way of the company telling you that rates may vary from the average', advertised rate according to different circumstances. So how does 'APR' differ from 'interest rate'? Click here to read more about the difference between interest rate and APR.

Minimum Payment Due: This is the smallest amount that you have to pay off on your credit card balance each month to avoid a charge. You should always aim to pay off more than this amount if you can. The credit card companies usually set the minimum monthly payment so that you are just paying off the interest on the money you spent, but none of the actual debt.

This means that if you only ever pay off the minimum balance you never actually start paying off your debt. Work out how much more you could afford to pay off each month - even an extra £5-10 per month will get that debt paid off a little quicker.

Fees and Charges: All of the charges that you have incurred over the course of the month will be separated out. These can include monthly interest, late payment fees (from the previous month, if you didn?t pay off your balance in time), and a fee for exceeding your limit.

The spend on your account may be separated out into 'Purchases' and 'Balance Transfers'. Payments count as any transactions where you have bought a product or service, and balance transfers are where you have used your credit card balance to pay off a balance on another card, or paid money into another account.

If you received a 0% interest-free rate on purchases and/or balance transfers, make a note of when this rate runs out. You'll start being charged for all transactions after the end of this introductory period, and you don't want to be caught unawares.

Credits: These are usually refunds that have been added to your card balance, for example if you have taken an item back to the shop and had the amount put back onto your card. Alternatively, if you were overcharged by mistake in a previous month and pointed it out, the refund would go back onto your balance the following month.

Compare 0% credit card deals to see if you can improve on your current deal.

Top 5 Financial Reasons to Quit Smoking in 2010

2009-12-15T00:00:00Z

Since the smoking ban started, smokers may be feeling a little put-upon. Unfortunately, it doesn't stop with the icy-cold outside smoking area in pubs, as many products and services come at a premium when you smoke.

Here is a guide to some of the ways you could save thousands each year, which will hopefully kick-start your resolutions if you are planning to quit in the New Year!

Cheaper Private Health Insurance

You might have heard the odd rumour that that smoking isn't so good for your health. Since smoking kills around 114,000 people a year, the obvious place you're going to notice the financial burden of smoking is on your health insurance premiums.

Tempting as it is to not tell your insurer that you smoke, you would lose out if you ever had to claim for a smoking-related illness because of course your claim would be invalidated. Even if you have recently quit, in insurance terms you're not considered to be a non-smoker until you have been smoke-free for 12 months or longer, so if you are asked when you last smoked, you'd need to be 100% honest.

When you've passed the year benchmark however, shop around for private health insurance and you'll notice the price difference immediately. Make sure to ask your current provider for a new quote, and if you find a more competitive deal elsewhere as a non-smoker, ask them to match it. They are likely to agree in order to keep you as a customer.

Get a free, no-obligation Private Health Insurance quote here >>

Cheaper Term Life Insurance

Term Life insurance gives your family financial protection if you should die within a certain period (say, 20 years). Statistically, smokers have a lower life expectancy than non-smokers. Therefore, any term life insurance policy you take out will be more expensive if you smoke.

Insurers don't want to lose money by paying out a large lump sum to your family when you have only been paying your premiums for a few years, so they make your premiums much more expensive. The insurance company is then covered if you should die earlier than you expect through a smoking related illness.

We're not talking a couple of pounds of difference, but thousands and thousands over the life of your policy so you could be paying off your mortgage early or living much more comfortably if you didn't smoke.

You need to be smoke-free for a year to qualify for the 'non-smoker' rates, so when you quit, be sure to tell your insurer. Then notify them when you have reached a year without smoking, and ask them to recalculate their premiums.   At that point, you should also shop around to find the best non-smoking life insurance deals in the market.

Get a free, no-obligation Life Insurance quote here >>

Add Thousands to the Value of your House

If you're planning to move home in 2010, it's likely that you'll be showing potential buyers around your place.   If you've smoked in your house for years, you probably will not notice the pervading smell of cigarettes. However, the moment someone new steps over the threshold, they will notice and this could be extremely off-putting when they are trying to visualise themselves in a new home.

If you are planning to quit smoking, make sure that you also thoroughly clean the carpets, walls and furnishings before putting your property on the market because the smell of smoke will linger. If you are a committed smoker, also do the above, and make sure that you smoke in the garden from now on.

Read other top tips on selling your home by property expert Sarah Beeny >>

Home insurance

You may already know that health and life insurance will cost you more as a smoker, but were you aware that home insurance companies also charge higher premiums to smokers?   Households containing a smoker are up to 40% more likely to suffer a fire than those where nobody smokes, and as a result, insurers view smokers' houses as being in a higher-risk category of cover.

If you are not planning to quit smoking, you need to at least make sure that you have a working smoke alarm installed in the house, because the combined risk of smoking and no smoke alarm will cause your home insurance premiums to skyrocket.

Get a free, no-obligation Home Insurance quote here >>

Perform Better at Work

Research by stop-smokingforever.co.uk shows that the average smoker takes two "unofficial" cigarette breaks a day, lasting around 15 minutes each. This means that if you smoke, you're taking half an hour more than your non-smoking colleagues each day, and the company is paying for it. Statistically, smokers take 1.8 more sick days a year than non-smokers, which again, costs the company money.

If you're hoping for a promotion in the New Year, now might be the time to increase your work productivity by kicking the habit and those extra, unpaid breaks. By being healthier, you'll not only feel much better but you'll reduce your sick days (and those lunchtime doctor and dentist trips that can eat into your afternoon), and therefore come across as a more reliable employee and therefore a better candidate for that top job.

More spare cash

If you smoke a pack a day, this amounts to several thousand pounds a year.   Whether you cut down significantly or quit completely, you'll have as much as a few hundred pounds extra to play with each month when you're not spending your hard-earned cash on cigarettes.

You needn't worry that quitting is going to cost you a fortune either, as the NHS offers free help and support to smokers who are trying to quit, via their website. We're sure you don't need any help working out what you would do with £2,000 extra to spend a year!

Who is using your Details?

2009-12-02T00:00:00Z

There has been a 12% rise in the number of cases of identity fraud since the start of the year. Data collected by National Hunter, the fraud prevention database operated by credit reference agency Experian, shows that there were 13.37 cases of identity fraud per 10,000 applications in the July-Sept period. This is compared to the January to March period when there were 11.91 cases per 10,000 applications made.

Fraudsters use the details of unsuspecting consumers to make applications for credit cards, personal loans and mortgages, with many people not realising their details have been used until they unexpectedly get turned down for credit.

Darryl Bowman from CreditExpert.co.uk, the website run by Experian, says: "The surge in cases of identity fraud is very worrying. As we get wiser to protecting ourselves from fraud, it's clear that criminals are working even harder to steal our personal details so they can apply for credit.

"Missing post, unexpected phone calls and strange emails are signs we look out for and know suggest potentially fraudulent activity. Criminals also know this and that's why they use techniques that can take a long time to detect. A new catalogue account at a new address could be the stepping stone to much more significant lines of credit and ultimately a much bigger problem for the victim to resolve."

The best way of preventing identity theft is to ensure that you only enter your details onto trusted websites. Any sites where 'http://" is not included at the start of the address are not secure, and therefore could be accessible by fraudsters.

Never provide any personal details in response to a bank's emails - banks would never ask you to email them with this kind of information, and would never even ask you to provide a full password over the phone. Con artists use a system called 'phishing' to create fraudulent emails and websites that look like they have come from banks and reputable companies, with the aim of fooling you into parting with valuable information. If in doubt, don't divulge any information, and call the bank/company back on the number provided on their website to verify.

However, your details are not just at risk online. Anyone who lives in accommodation with a shared hallway needs to be careful that their post is delivered directly to their door to avoid it being intercepted. Shred any mail giving account details, and other sensitive information such as your place of birth, date of birth or mother's maiden name.

Of course, if you do not tend to make credit card applications very frequently, you are unlikely to find out that you have been a victim of identity fraud until months, even years, after the damage has been done. Therefore, it is advisable to keep an eye on your credit report. If you subscribe, you receive notifications any time a credit check is made (suggesting that an application has been made on your behalf) or any other changes occur.

Even having a one-off glance can make all the difference, because mistakes and recorded transactions that you don't remember making can be sorted out very easily. You can see your credit report for free with a 30-day trial with Experian, or can apply to any of the UK's credit reference agencies (the main ones being Call Credit plc, Experian and Equifax) for a one-off copy for a couple of pounds.

Is an Offset Mortgage right for You?

2009-11-26T00:00:00Z

A survey of homeowners and potential buyers has shown that 40% do not fully understand the benefits of an offset mortgage. The research, carried out by UK online bank first direct, highlights the fact that many consumers may be missing out on a flexible mortgage product that could provide significant savings on their home loans. So what exactly is an offset mortgage, and who is it suitable for?

The main feature of an offset mortgage is that you can reduce the interest that you pay for your mortgage, by offsetting the balance against your savings. For example, if you took out an offset mortgage of £100,000 and you had savings of £15,000, you would only be charged interest on £85,000 of the mortgage balance. As a trade-off, you would not receive any interest on your savings.

The main reason why an offset mortgage should be a consideration in the current climate is that savings accounts are (on the whole) not offering the same returns as they were several years ago. If you do have savings, offsetting them against your mortgage balance may therefore offer a higher rate of interest overall than keeping them in a standard savings account. In addition, any interest that you earn from your savings is not taxed if it is offset against your mortgage. You would be hard-pushed to find an equivalent return on your savings, especially if you are a higher rate taxpayer.

With most offset mortgage providers, you also have the option of including your current account balance in the calculations. This means that if you have a mortgage balance of £100,000, savings of £15,000 and an average current account balance of £1,000, you would be charged interest on £84,000 of your mortgage balance. As you would usually not receive a very high return on money that is kept in your current account (because current accounts are intended for everyday transactions, rather than savings), it makes sense to use this money against your mortgage balance. However, unlike other mortgage types, you would still have access to the savings in case of emergency.

Offset mortgages are most attractive to people with a larger mortgage balance and also some savings (or a salary scheme that includes bonuses), due to the flexibility and the likelihood of paying off the mortgage balance early. However, it's important to note that if you have any other debts, any savings benefits that you enjoy may be cancelled out by the interest you have to pay on your debts. Work out whether it is more cost-effective to pay off the debt first ? this is likely to be the case for high-interest debts such as credit card balances, but not necessarily for student loans or longer-term personal loans where you may be charged an early repayment fee.

With an offset mortgage, you would normally be expected to use the same provider for your mortgage and your savings account. This means that you have to look not only at the rates of interest that you're charged on the offset mortgage, but also at the rate of interest that the provider pays out on current and savings accounts when deciding whether this type of mortgage makes the most sense for you.

The increased flexibility of an offset mortgage means that the interest rate is likely to be higher than say, a fixed rate mortgage. If you do not have many savings, an offset mortgage may not be right for your circumstances and a fixed rate mortgage might actually offer a more competitive rate. Fixed rate mortgages are actually much more flexible than they were in the past, and you have the added benefit of guarding against any interest rate rises. To talk through your options with a qualified mortgage adviser and receive a free, no-obligation quote, please fill out our short mortgage form.

Disappointment for Consumers over Bank Charges Ruling

2009-11-25T00:00:00Z

The week's ruling by the Supreme Court relating to unfair bank charges was a disappointing one for consumers. The case was between the Office of Fair Trading (OFT) and seven high-street banks and one building society, with the aim of determining whether the Office of Fair Trading had the right to decide whether bank charges were unfair. In a judgement that came to a shock to all those who had campaigned for the OFT and consumer fairness, it was ruled that the OFT did not have this right.

Had the verdict been reversed, the OFT has already made it clear that they would have ordered the banks to repay billions of pounds of charges to consumers, for excessive charges made on current accounts. The charges were levied mainly when account holders exceeded their agreed overdraft limits, and could amount to £39 a time. However there have also been substantial fees charged for a bounced cheque ? due to insufficient funds being in the account to honour the payment.

The banks have justified the payments by saying they were necessary to cover administration charges for the failed transactions. However, the actual cost to the banks was estimated to be much lower. Consumers still do have the right to appeal to their banks against charges that they feel to be unfair, however this verdict means that the number of claims is likely to be far lower than anticipated.

The chief executive of consumer organisation Which?, Peter Vicary-Smith says: "The outlook is bleak for anyone with an outstanding claim and we're concerned that yesterday's ruling could drive people into the arms of unscrupulous claims handlers. Beware of companies who contact you promising to get your bank charges back and never pay an upfront fee. If you're in financial hardship, tell your bank. They're unlikely to give you your money back, but they have to take your circumstances into account and may waive any future charges. If your bank refuses to help you, then go to the Financial Ombudsman."

Liberal Democrat leader Nick Clegg made reference to the ruling in a speech this week, saying that "it simply isn't right that someone on a low income should pay £25 or more to their bank just because they're overdrawn by a pound or two.
"It is absolutely outrageous that one third of all profits banks make on their current accounts comes from unauthorised overdraft charges. The only way to protect millions of customers from being ripped off by their banks is to now change the law."

Whether or not any eventual changes are made to the law, a number of banks have already reduced their unauthorised overdraft charges to more manageable levels. This suggests that banks can comfortably process these transactions at much lower prices, and it is hoped that now that attention has been drawn to the issue consumers will see a significant difference in the charges brought by their banks from now on.

However, it is also important to ensure that when you open a new current account you carefully read through the terms and conditions. The charges may be steep, but the banks are legally obliged to tell you about them when you sign up so by knowing in advance, you may be able to avoid a nasty surprise.

How to Maximise your Retirement Savings

2009-11-23T00:00:00Z

Many people aged 55 and above feel that the recession has diminished their retirement savings, according to an online survey carried out by UK insurer Aviva. The survey showed that there is a huge amount of anxiety among those approaching retirement age, with 26% of the 1,200 respondents saying that 'making ends meet' is their main concern for the future.

When asked to specify what was worrying the respondents the most, 32% stated that the rising cost of living was the thing that kept them awake at night. 19% worried about their pension pot being smaller than they had originally expected, and 22% were mainly concerned about the value of their savings falling. Despite the fact that all of the people surveyed by Aviva were within the last 10 years of their working lives, as many as 12% of respondents claim to have started investigating additional sources of income.

Brian Bussell, director of pensions, UK Life, Aviva, comments: "These latest figures highlight just how important it is for people to start saving for retirement as early as they can. Understandably, the recession has forced people to think about their retirement income and many have realised that they may not have sufficient funds to live through their final years in the comfort they have grown accustomed to."

"We would encourage people to make use of their full range of assets, including investments, state benefits, pensions and property, to make sure that they aren't effectively cheating themselves out of the lifestyle they could enjoy. We would also urge people to begin saving as early as possible for their retirement to make sure they do not have to make major lifestyle changes later in life."

But starting to prepare as early as possible is great advice for those at the start of their careers, but what are your options if you are approaching retirement and have concerns about your means? The first step would be to check whether you are entitled to any additional State benefits that you are not currently aware of. You can find out more about the benefits that may be available to you on the DirectGov website here. Also consider tracing any pensions that you may have lost track of, using the Pension Tracing Service.

Aviva recommends that you should take stock of all your assets including investments, state benefits, pensions and property", commenting that, "Many older people are asset-rich but cash-poor, so down-sizing or equity release may be an option for retirees in this position. However, if you are considering equity release or property we would strongly advise you discuss this with your family before making any commitments." To find out more about the different types of equity release programme available, please click on the link.

Another way of making your retirement savings go further is to utilise your Open Market Option (OMO) when buying an annuity with your pension savings. The OMO is simply the process of shopping around for the best deal on annuities, rather than simply choosing the one offered by your pension provider. Although some pension plans have restricting on this, in most cases you are free to choose any annuity you wish. When you consider that choosing the right annuity for your circumstances can significantly increase your retirement income, it is definitely worth taking the time to shop around. If you want to find out more about your retirement planning options, you can find an independent financial adviser in your local area at www.unbiased.co.uk.

Transfer Rules: Moving your Money from one ISA to Another

2009-11-22T00:00:00Z

Transferring within the current Tax Year

If you have money saved up from this tax year and you find a better deal at another provider, you can move money from a Cash ISA to another Cash ISA. However, if you are doing this, you must move the full amount at the same time, and you must move the full amount to the same provider.

-->> Click here to get an unsecured loan today.<<---

If you have money in a Cash ISA for this year and you would prefer to use it for Stocks and Shares, you can move the money from a Cash ISA to a Stocks and Shares ISA. However, again, you have to transfer the full amount at the point of transfer, and you cannot split the amount between providers.

You cannot invest in more than one Stocks and Shares ISA and one Cash ISA in the same tax year. You cannot ever move money from a Stocks and Shares ISA to a Cash ISA.

Transferring money from previous Tax Years

If you have money saved up in a Cash ISA or a Stocks and Shares ISA from a previous year, you can move it to a new provider (or stick to your current provider) without affecting any of this year's allowance. For example, if you have £2,000 in a Cash ISA from last year, you can keep it where it is or move it, and continue to earn tax-free interest on that £2,000 whilst keeping your £3,600 allowance for this year (or £5,200 if you are over 50).

This applies to every tax year in which you have had money saved, so you can continue looking for good deals for your money after each tax year has passed. The above rules apply, so you can transfer a Cash ISA to another one, or to a Stocks and Shares ISA, but cannot transfer Stocks and Shares into cash. If you're transferring an 'old' Cash ISA however, you can split the money between a number of providers.

General ISA Transfer Information

When you have found a better deal and would like to move your money or investments to a new provider, you will need to go to the new provider and ask for them to arrange the transfer. Your current provider may charge you to transfer the ISA, so you should always check the terms and conditions before taking out an ISA to see if this is the case.

You can have any additional questions about ISAs answered by calling the HM Revenue and Customs helpline on 0845 604 1701 (and then choosing option 2) on weekdays.

How Green are your Finances?

2009-11-19T00:00:00Z

Ethical Finance is not currently a priority for more than half of Britons, according to research organisation EIRIS. The online survey aimed to explore the attitudes of the British public towards ethical financial products in the aftermath of the credit crunch.

One of the questions asked was whether those surveyed were interested in the ethical credentials of the products and services they buy. Only 44% said that that they were, and three-quarters of this interested number would take the ethical aspect into consideration next time they looked for financial products and services.

However, the survey seems to have raised the issue of awareness; 62% of respondents could not actually name one ethical financial product or service, and surprisingly almost half of those who said that they would consider ethics as part of their decision-making could not name any either.

So what are the reasons for the lack of knowledge or interest in ethical finance? According to the survey, 46% of people feel that "there is not enough information available on how they make a visible difference in the world", whilst 35% "do not trust the claims of financial providers".

When it comes to perception of the ethically-focused products, only 15% felt that they would perform less well than similar standard products. This shows that although there is a lack of concrete awareness about the products available in the market, people do feel generally positive about ethical finance.

Mark Robertson, Communications and Development Manager at EIRIS said: 'Our survey provides firm evidence of growing interest in ethical finance, suggesting that the message that it is possible to both make money and make a difference when investing ethically is starting to get through to consumers. But levels of awareness, trust and confidence in ethical finance are low. The industry must respond with greater transparency and provide more information on how saving and investing can make a positive difference'.

A new website launched by EIRIS, www.yourethicalmoney.org aims to make it easier for consumers to make ethical and environmentally-friendly choices in their finances. Users can search the site for bank accounts, investment opportunities, credit cards, pensions and other products that match their ethical concerns. There are also tools and letter template for those who wish to make an active difference. So if you feel that you would like to do more, but perhaps did not know where to start, now is the time to act.

Calls for Stamp Duty to Support the Housing Market

2009-11-18T00:00:00Z

As the end of the stamp duty 'holiday' draws nearer, the debate over whether the government should increase the threshold indefinitely becomes increasingly heated. Last year, the level at which homebuyers were liable to pay Stamp Duty on their properties was temporarily increased, in order to help stimulate the ailing property market. This meant that anyone buying a house worth up to £175,000 would not have to pay the Duty until the end of 2009, at which time it will revert back to the previous limit of £125,000.   

The current feeling is that removing the upper limit again in the early days of recovery will cause a dip in the housing market. Gary Smith, President of the National Association of Estate Agents, said: "There is strong demand for property and more optimism in the housing market than we have seen for months. This is good news for the recovery of the market and for the UK economy in general.

"Many buyers are at the very beginning of the house buying process and this is creating a lack of properties in the short term. It is now up to the Government and the banks to do more to keep the momentum of market recovery going. A good place to start would be for the government to extend the Stamp Duty holiday, which mainly affects first time buyers, and is currently scheduled to end in December."

On a more general level, Stamp Duty is viewed by industry professionals as "damaging" and "anachronistic". In a rare act of industry-wide collaboration, organisations including the Council of Mortgage Lenders (CML), the Association of Residential Letting Agents (ARLA) and the Home Builders Federation (HBF) have joined together to form the 1808 coalition. The name comes from the date in which Stamp Duty was introduced for property sales in Britain.  

The coalition believes that the government should do away with Stamp Duty altogether. However, they have also suggested some alternative considerations, such as suspending the Duty on properties fully until the housing market has recovered, and changing the threshold calculation "from the distorting 'slab' system to a more progressive 'slice' system". At the moment, a property that is valued at only several hundred pounds more than another can cost thousands more in Stamp Duty because it falls into a different value bracket.  

A further suggestion for reforming the system is that the threshold should fall far above the current £175,000 to give as much assistance as possible to first-time buyers looking to get onto the property ladder. Adrian Coles, Director General, BSA, said: "The current Stamp Duty system in the UK is archaic and in desperate need of reform and modernisation. A fairer and transparent system is needed that doesn't discriminate against young and first time home buyers, and promotes an effective housing market."  

According to the Rightmove House Price Index, the average UK home cost £162,038 in October 2009, a rise of 0.4% from September. This clearly indicates that should the Stamp Duty threshold revert to its previous level of £125,000, a large number of first time buyers will still be liable. Considering that property deposits are now far higher than they have been in recent years, it is unsurprising that a lull in the market is expected at the start of next year. In order to keep the property market in a state of recovery, it is essential for new home purchases to remain financially viable for first time buyers.

Calls for Stamp Duty to Support the Housing Market

2009-11-18T00:00:00Z

Calls for Stamp Duty to Support the Housing Market

2009-11-18T00:00:00Z

Get Covered for Christmas Shopping Abroad

2009-11-12T00:00:00Z

Now that the decorations are up in the high streets, it's official. Christmas is almost here, and it's time to get shopping. If you are one of the millions of Britons planning to fly abroad to snap up the best deals in the Christmas markets, it's important to avoid potential festive disasters by taking steps to keep your purchases and your money safe and secure.

According to comparison site confused.com, as many as 19% of Britons will travel abroad to visit a foreign Christmas market this year, despite the poor interest rates on foreign currency. However, whether you're trawling the markets for the perfect gift, there are certain safety measures that you should observe so that you are prepared for any eventuality.

Firstly, if you are heading off on a shopping trip, sort out your travel insurance first. Make sure that the cover lasts from the moment you leave the house until the moment you get back to your front door, since lost baggage and delayed flights are only two of the mishaps that can occur in transit. Annual travel insurance is a cost-effective option if you travel frequently. Do make sure when you take out the policy however that it covers you for all the areas you plan to travel to that year.

Steve Williams, head of travel insurance at Confused.com, said: " Insurance, for this type of trip, can often be overlooked as the trips are usually only for a matter of days. Irrespective of the length of trip, things can still go wrong. With this in mind, travel insurance is a necessity to cover the items you take out with you, and more importantly, cover the items and gifts you bring home."

Before taking out travel insurance, read the policy documents carefully to make sure there are no exclusions that will limit your cover. Carefully itemise everything that you plan to take with you (and include the cost of your luggage) to make sure that you have enough cover, should anything get lost or stolen.

In the unfortunate event of your bag going missing on the way back, one key tip to ensure that your insurance claim is successful is to keep the receipts for everything you have bought. Report the loss to the airport authorities or local police and get proof in the form of an incident report. If your insurer has a 24-hour international helpline, call as soon as you possibly can to log the claim. Some travel insurers give you a maximum time frame for making a claim after the incident has occurred, so speed is important.

If you need to provide receipts for your purchases to the insurer, either send copies (if these will be accepted) or make sure the originals are sent via recorded delivery to ensure they are safely received. Also, be as detailed as you can in your claim report, and if you have had money stolen as well, include any bank withdrawal slips and conversion receipts to prove the amounts.

There is every chance that your shopping trip will pass without incident, and you'll return laden down with festive bargains. However it is important to be prepared for the possibility of incidents occurring, so get covered, keep an eye on your belongings at all times, and keep proof of all your purchases and transactions while you are away. For a competitive quote for annual travel insurance, please click here.

Making Saving a Habit from a young Age

2009-11-11T00:00:00Z

If we want our children to avoid getting caught in the same 'credit binge' that our economy has suffered from over the past few years, we need to be doing more encourage saving from an early age, according to Andrew Hagger at finance website Moneynet. So what are the options for saving, if you want to get your children off to a good start as savvy consumers?

Child Savings Accounts on the high-street

Most of the options currently offered in the market by the high-street banks and building societies are Regular Saver accounts, in order to encourage children to get into the mentality of making frequent deposits out of their pocket money (in addition to any contributions the parents make).

Research has shown that interest rates on Child Savings Accounts are not nearly as competitive as those offered to adult counterparts, offering as little as 1.0% or less in annual interest. As a way of encouraging frequent saving, some banks will however reward tiny savers by increasing the interest rate when a certain amount is deposited each year.

How much of the savings are tax-free?

The child savings options available are tax-free to an extent, since children's personal tax allowances are the same as adults' (currently £6,475) and unless they are child movie stars they tend not to be earning over this amount. When you are opening the account on behalf of your child, you'll need to complete form B85 for the account, and this should be available in-branch at your local bank. You can also download this form here.

If a child earns more than £100 in one year in interest from cash added to the account by one or both of its parents, the additional interest earned is taxed at the same rate as a standard adult savings account. However, other family members and friends can contribute to the account without incurring any taxable limit (within reason, £100,000 being added to the account in a year through a string of relatives may incur some suspicion from the Inland Revenue).

Child Trust Funds (CTFs)

If your child was born on or after the first of September 2002, you could consider setting up a Child Trust Fund (CFT), which pays a much higher interest rate and is includes a government contribution of £250 (or up to £500 subject to means-testing). This can provide a viable alternative (or addition) to the standard children's savings accounts run by the UK's banks and building societies. The CTF is a long-term savings investment, and the money cannot be withdrawn until the child reaches 18 years of age. Ownership of the account can however pass legally to the child when they reach 16.

Premium Bonds

A further alternative is Premium Bonds, which can be purchased for a child in the name of a parent of guardian, although the bonds cannot be transferred to the child's name until they reach 16. Between £100 and £30,000 can be invested in the name of an individual child or adult. Premium bonds do not pay interest, but instead every bond (worth £1) is entered into a prize draw each month to win tax-free cash prizes. To find out more about premium bonds, please click here.

Hagger comments, " Much of the UK was caught up in a decade long credit binge before the crunch took hold and only now are some people starting to wean themselves off their reliance on credit. If we want our children to grow up with some savings behind them and to appreciate the value of money rather than reach for the plastic, providers need to offer better rates and incentives to encourage parents and their youngsters to save regularly." So, banks and building societies it is time to take note. If you wish to create an army of dedicated future savers, it's going to take more incentive than a porcelain piggy bank.

Good News for Landlords

2009-11-11T00:00:00Z

There were two pieces of good news released today for landlords, or for those planning to invest in a buy to let property in the near future. Mortgage lending in the buy to let market grew last quarter for the first time in two years, and the level of landlord possessions dropped last quarter from the start of 2009.

The Council of Mortgage Lenders (CML) published data today showing that current lending to landlords reached £2.1 billion in the last quarter, a massive 10% higher than in the previous 3 months. This last quarter also showed a significant increase in the number of buy to let mortgage loans accepted, an increase of 2,100 home loans from the previous quarter.

When looking at these figures, it's worth remembering that the buy to let market peaked in 2007 at far higher levels of borrowing, and that we are still a long way from seeing a full recovery. However, considering the poor condition of the market over the past two years and the difficulties that have been faced by landlords, the growth is encouraging.

The CML's director general Michael Coogan said: "At this stage, the recovery is modest - but the figures show that buy-to-let is here to stay. Buy-to-let lenders are among those facing some of the biggest challenges in raising mortgage funding, so the improved figures are all the more welcome.

He continued, " With funding for social housing under pressure, the private rented sector has a strong future. Mortgage lenders will have an important role to play in it, and will continue to help improve choice and standards for private tenants."

Reassuring too is the news that for the third quarter in a row, the number of landlords in arrears on their mortgage payments has fallen. The Ministry of Justice has released figures showing that the number possessions of buy to let properties has fallen 3% from last quarter, and a total of 9% from the same time last year.

The cost of buy to let mortgages has fallen, which is likely to have contributed to the drop in missed mortgage payments. Although it is still very difficult to find a remortgage without a deposit of at least 80% of your property value, landlords are finding that the standard variable rates of their lenders are actually very competitive at the moment, with the base rate still sitting at 0.5%.

Drive a Hard Bargain: Why you should Haggle for your New Car

2009-11-04T00:00:00Z

It appears that many motorists are shy about haggling over the price of a new car, according to research carried out by Sainsbury's Finance. Out of the 1.14 million people planning to buy a car between September 2009 and February 2010, around 10% said that they would not expect to haggle at all.

These non-hagglers might change their mind about this however if they realised they could get a discount of up to 50 per cent off the shop price for the car. What Car? Actually recommends that the average discount you should expect on a new car is around £1893.

Steven Baillie, Head of Sainsbury's Loans said: "The car industry is still going through a difficult period, with sales of new cars in September for example down around 20% on previous years(5) despite some help from the Government's car scrappage scheme.

"From the buyer's point of view this means that now is a good time to negotiate a significant discount on the price of a new vehicle. Our research suggests that with stereotypical British reserve, many of us don't haggle hard despite the big savings that can be made, so we'd urge car buyers to give it a go."

The government recently announced plans to add an additional £100 million of funding to the scrappage scheme, whereby car dealers that are signed up to the scheme would give car buyers £2,000 off the cost of a new car if they agree for their old car to be scrapped. This means that the scheme will now cover up to 400,000 vehicles in the UK. To check if your car is eligible for the scrappage scheme, read the government's scrappage scheme guide here.

When haggling over a new car purchase, it helps to do your research in advance. What Car? has published a guide showing the average discount you should expect on a particular make of car. Don't fall victim to crafty safes techniques; if you have a set budget and a preference on the make and model of car, a hefty discount on a more expensive car is not a good deal.

Also, if you need a car loan in order to purchase the vehicle, make sure you shop around for the best deal. According to Sainsbury's Finance, around 26% of new cards purchased in the next 6 months will be financed by car loans, and asking for quotes from a number of different providers will ensure that you find a competitive rate. The haggling doesn't necessary have to end at the dealer's yard. If you see a car loan rate that you like, ask your bank if they are willing to match it. You may find that they will do so, in order to win your business.

Would a Cashback Credit Card be right for You?

2009-11-04T00:00:00Z

If you are a credit card user who pays off your cards in full each month, you probably find that you have no real need for the 0% balance transfers and introductory interest rates offered by the big card companies. A cashback credit card could therefore be a good way of ensuring that you get some additional benefits from the card.

So how does a cashback credit card work?

When you spend money on a credit card, the merchant has to pay a commission to the bank or other card provider for taking the payment. Some credit card providers share this commission with the card holder as an incentive for using the card regularly, in the form of air miles, loyalty points or actual cash.

How much money would I get back?

With a cashback credit card scheme, you actually earn a small percentage of your spend (typically between 0.5% and 2% of your purchase amount minus any returns) each time you spend money on the card.

To tempt in new customers, card providers will often offer a particularly good rate for the first 6 months, up to 5% of your net purchases, after which time it decreases. You will also find that some purchases will net you a higher commission percentage than others, so it is worth shopping around for the card provider that favours the type of things that you spend your money on anyway.

How to make sure you don't get into debt

As soon as you open your account and get your card, set up a direct debit to ensure that you repay the full amount each and every month. Unless you specify clearly on your credit card direct debt, credit card companies will automatically deduct the minimum balance from your account each month. Therefore, tick the 'Pay balance in full' box, or write it on the form and call up the provider to check that it has been set up correctly.

The interest rates on credit card debt are some of the highest in the financial services industry (with cashback cards often highest of them all), so only take out this type of card if you're prepared to clear the balance every month. Having to pay interest on your balance will more than eat up any cashback you may have earned over the month.

What are the alternatives to cashback credit cards?

If you feel it's likely that there will be some months when you will not clear the balance, it's better to choose the credit card with the lowest interest rate instead. Alternatively, if you find that you often run out of money before the end of the month, a prepaid credit card might be a more sensible option since you can only spend money that you have already loaded onto the card.

Act now to Avoid Stamp Duty on Buying a Home

2009-11-02T00:00:00Z

Since September 2008, the government has waived Stamp Duty on all properties valued at £175,000 or less. This temporary increase to the allowance (previously £125,000) was aimed at encouraging potential homebuyers onto the property following the crash of the property market. Over this period, it's been estimated that the government have forfeited more than £274 million on Stamp Duty earnings, based on the 174,000 house purchases that have been completed over the same time period.

On 01 January 2010, the threshold for paying 0% Stamp Duty is due to revert to the previous limit, although the Chancellor, Alistair Darling, has not ruled out a continuation of this change. Whatever happens in the new year, if you are in the process of buying or selling a home, you will still be able to benefit from the Stamp Duty lower limit increase, and save up to £1,750, by completing on the property sale by the end of this year.
 
Estate agency Nottingham Property Services, the property broking arm of The Nottingham Building Society is urging anyone in the process of selling a property worth £175,000 or less to hasten along the sale to ensure that the buyer will not be hit with Stamp Duty charges.

Lorraine Giddings, Head of The Nottingham's Branch network said of the uncertainty surrounding the Chancellor's final decision, "On one hand the Government is in a difficult position as it needs the revenue that is generated from Stamp Duty. On the other, the housing market is at the beginning of a long road to recovery and any decision to reintroduce Stamp Duty could hinder progress.

"In my opinion, the Chancellor is going to have to do something - but second-guessing which decision he will make could prove very hard. That's why we are recommending to people who are serious about selling their homes that they should act decisively now." The Bank of England recently published figures showing that the number of mortgage approvals is increasing, due to a combination of growth in homebuyer confidence and a greater availability of first time buyer mortgage products in the market.

  Stamp Duty is the tax that that is charged when you buy property, and the amount that you pay is dependent on the value of the property you are purchasing, with the highest level of 4 per cent payable on properties valued at £500,000 or more. There are a number of ways in which potential homebuyers are being courted in the wake of the housing market decline. Many mortgage lenders are offering free valuations and waiving legal fees, in an attempt to minimise the financial burden of buying a property for those with limited capital.  

For those looking to sell their property, this could therefore be an opportune moment. £1,750 is a significant saving when there are so many other costs involved, and this Stamp Duty window could therefore provider potential buyers with the incentive they need to make the step. Giddings added, "My advice to someone who has decided to sell is ?get on with it!' Providing the house is in reasonable condition, there are a lot of people out there who are seeking homes in the region with a price tag of £175,000, or less."

Act now to Avoid Stamp Duty on Buying a Home

2009-11-02T00:00:00Z

Fairer Rules proposed for Credit Card companies

2009-10-27T00:00:00Z

The government today announced a series of reforms designed to tackle the growing problem of credit card and store card debt. The proposed changes include improving debt repayment policies and banning the increasing of card credit limits without the card holder's prior consent, among other measures.

The action is being taken as credit and store card companies are accused of imposing "complex and confusing terms and conditions that can leave people baffled" and of increasing credit limits and interest rates without giving consumers fair notice or explanation. There are already plans in place to ban credit card companies from sending out unsolicited credit card cheques to card holders.

Consumer Minister Kevin Brennan said: "It is not acceptable for card companies to impose complex and confusing terms and conditions that can leave people baffled, or to increase interest rates without a proper explanation. Consumers have a real responsibility to manage their finances properly, but they also have a right to clear information to enable them to do that. Consumers should not feel each month as if they've been exploited or disadvantaged."

A document has been published today laying out the proposed changes to the laws governing debt repayment. One of the key proposals is to change the rules about the order in which debts that build up on a credit card are paid off. The policy on repayment at most credit card companies is that the lowest interest debts are paid off first, which of course means that the consumer pays more interest on their debts for a longer period of time.

New rules have also been proposed for the percentage of the actual debt that credit card companies must charge each month as the minimum payment. Currently card companies are able to charge as little as 2 per cent of the outstanding balance, a figure that will just about cover the interest that is charged.

This means that if a consumer pays off just the minimum balance each month, they are unlikely to ever clear their debt. The plan would be to raise the minimum repayment to 5 per cent of the outstanding balance, helping consumers to escape from the minimum payment vicious cycle. The suggested alternative would be to set a time scale within which the full balance had to be paid, and to set the monthly minimum accordingly.

Other measures include changing the regulations so that consumers can pay off the higher-interest debts first, rather than paying off the cheapest debts and being left with unmanageable interest repayments as a result. The practice of increasing a cardholder's interest rate without any proper explanation has come under fire, and the government has suggested that limitations should be imposed on the amount that the interest rate can rise.

According to the proposal document, credit card companies 'have agreed that they shouldn't increase your credit limit more than once every 6 months'. However, credit limits where the consumer has expressly asked for them are one thing, but unsolicited interest rate rises on existing debt are quite another, so a distinction has to be made.

Fairness, transparency and a sense of understanding are desperately needed in order to help UK consumers manage the £230 billion of debt from credit cards, store cards and personal loans that has built up. Ultimately we are all responsible for the personal debt that we incur, but it's important that the credit card and store card companies do not actively work to keep consumers in debt.

Contracting out of your State Second Pension

2009-10-27T00:00:00Z

If you are employed in the UK, you may be eligible to receive a State Second Pension in addition to the basic State Pension that almost every UK resident receives when they reach State Pension age. You'll qualify for this additional pension (known as S2P) if you have been earning above a certain amount (currently £4,940 but liable to change) on which you have paid sufficient National Insurance contributions. If you are self-employed, you are not eligible for the State Second Pension.

At the moment, the government permits S2P holders to leave the scheme and choose to hold their second pension through a private insurer instead. This is known as 'contracting out'. Contracting out is a temporary option; it's likely that all but final salary pension holders will be prevented from opting out by 2012.

If you do decide that you would prefer to have your State Second Pension managed elsewhere, the government will pay some of your National Insurance contributions and the income tax relief that you would have enjoyed through their Pension scheme into a private pension of your choice. The money that the government gives back to you when you contract out is technically a rebate, but you are only allowed to use the funds for the purposes of a pension. This is because the whole point of the State Second Pension scheme is to supplement your basic State Pension upon retirement.

Are you contracted out already? The only way in which you might already have contracted out your S2P without your full knowledge is if you were offered an occupational pension scheme through your employer. Firstly, check with your employer to find out whether you are contracted out. If this is the case, you cannot contract back in while you are a member of this scheme. If you are unsure about the current status of your State Second Pension and you are not part of a company scheme, you can apply for a Pensions forecast from HMRC by calling 0845 3000 168.

So why would you want to contract out your State Second Pension? The main reason that people choose to contract out their S2P is that they feel they are likely to get a better retirement income through a private pension scheme. If you are older and likely to be extremely reliant on your State Second Pension to sustain your lifestyle once you retire, contracting out, and accepting the financial risks that accompany this decision, may not be the right choice for you.

Consumer champion Which? advise treating websites that urge you to contract out with caution, saying that they "suggest that most people under 40 would be better off contracting out". Many of these sites carry no endorsement from the private insurers whose private pensions they recommend, and there is a danger of being worse off if you contract out without having all the information that you need to make the decision.

In order to find out what kind of S2P rebate you would receive from the government to invest in a private pension scheme, you can either apply for a Pension forecast from the government on 0845 3000 168 or talk to a private pension provider. Either way, they need to know your age and earnings (and your National Insurance number, in the case of the government). If you contract out, you should review your decision every three years, according to Which? to ensure that your pension is growing at least at the rate of the government scheme, or preferably faster.

Banning Self Cert Mortgages would Spell Trouble for the Self-Employed

2009-10-19T23:00:00Z

Today, the Financial Services Authority (FSA) laid out its proposals for dramatic reforms in the mortgage industry. The changes are focused on preventing consumers from borrowing more than they are able to pay back, and also on making financial advisers more 'personally accountable' to the FSA.

One of the largest proposed transformations is a ban on self-certification mortgages, also known as self-cert mortgages. This product currently allows consumers to borrow money for a house purchase without background checks being carried out on their income. In the market at large there are obvious benefits from making all consumers prove their income. However, are the self-employed and freelancers, the original target market of the self cert mortgage, going to suffer as a result?

Self cert mortgages are aimed at home buyers without a regular income, such as freelancers and contractors, people who own their own businesses and those with irregular salaries (such as salespeople reliant on commissions). However, during the property boom, many people abused the fact that no proof of income was needed and inflated their incomes to buy more expensive properties. Such is the strength of feeling against self cert mortgages, that they are now being dubbed 'liar loans', due to the unscrupulous borrowing that took place.

In 2007, self cert mortgages accounted for a massive third of all new loans, amounting to approximately £100 billion that was paid out. Due to the higher risk for the banks in lending to people who did not prove their income, interest rates on the loans were also typically higher than for conventional home mortgage loans. The increasing gap between the houses that people bought and what they could actually afford inevitably led to disaster, and since the recent crash in the property market, many consumers have found themselves in serious financial difficulty.

Under the proposed new regulations, consumers would have to provide verification of their income, in the form of pay slips dating back two years, and also possibly a copy of their P60 form. Employers may also need to be contacted for confirmation. However, this could cause problems for the millions of self-employed consumers in the UK who are in a position to purchase a property, but who would not be able to provide PAYE evidence of their income.

If you are a freelancer, a contractor or you work in sales where a relatively low basic income can be boosted by commissions and bonuses for meeting targets, you would be in a rather uncertain position under the proposed new scheme. Previously, if you wanted to purchase a property, you would have needed to provide an accountant's letter showing that you were trading and solvent, but beyond this you were not tied to the standard income proofs demanded by conventional mortgage lenders.

It is a shame that the people who would have genuinely benefited from self cert mortgages would stuffer the consequences of a ban the most, when the issues were largely caused by unscrupulous brokers that encouraged consumers into mortgages they could not afford, and consumers who were not entirely truthful about their earnings. If the FSA do proceed with a ban on self cert mortgages, there will need to be some alternative, so that the many, many people in the UK with 'non-standard' incomes will still be able to take out mortgages.

In retrospect, the almost total lack of regulation left the self-certification mortgage system wide open to exploitation, especially at a time when people were making large returns from investing in expensive property. Therefore the solution would be to retain the features of this mortgage type, with a much higher degree of regulation so that self cert is less susceptible to the abuses of the past.

First Time Buyers, Your Time Has Come!

2009-10-08T23:00:00Z

According to new research from national lender Abbey, it is now actually cheaper for potential first time buyers in the UK to purchase a property than to continue renting. The only exception to this is in London, where it would still work out more expensive to get a first time buyer mortgage than it would be to remain a tenant.

The research found that 1.61 million Britons were looking to buy in areas outside of London, and based on today's first time buyer mortgage rates, the people surveyed would save £624 each or a collective £1 billion over the next 12 months if they did decide to buy a place of their own. Unfortunately for those based in the capital looking to get onto the property ladder, the fact that house prices are still at a premium means that they would actually be £466.19 worse off per month by choosing to buy rather than rent.

For the potential first time buyers outside London, the average monthly rent comes to £434. First time buyer mortgages, as they stand in the market today, would cost an average of £382 per month if taken out with a 25 per cent deposit - a saving of £52 per month. Of course if you are able to put more upfront capital into your property in the form of a larger deposit, your savings could be even greater.

Across the UK, typical first time buyer properties (new-build flats and terraced houses) now cost an average of £92,861, a decrease of 9 per cent from last year. Therefore, if you were looking to take advantage of these lower prices, you would need an average deposit of £23,215 (or 25 per cent) for a first time buyer mortgage. It's particularly good news for potential first time buyers living in Wales, where you would make an average monthly saving of £90.91. This is followed by the North West (£87.43) and Yorkshire (£77.06). Buying a place in East Anglia as opposed to renting would save you a fairly disappointing £2.59 per month.

As the mortgage market is so competitive, many lenders will offer you free valuation and legal fees with first time buyer mortgages, so you should make sure that you shop around to see who can offer you the best deal. If you have a deposit totaling 25 per cent or more of the value of the property you wish to buy, you are hot property for mortgage providers, so if you don't have sufficient savings yet but you want to buy a place, get started as soon as possible. Consider an ISA for tax-free savings or a savings account where you have limited access to your money, as these types of saving usually yield the highest returns.

To find out more about first time buyer mortgages, and talk to an experienced adviser from the SimplyFinance network about your options for getting a mortgage, simply fill out our short first time buyer form and an adviser will be in touch shortly.

First Time Buyers, Your Time Has Come!

2009-10-08T23:00:00Z

Be a Safe Driver this Autumn

2009-09-30T23:00:00Z

Motorists should take extra care this month, according to figures from Virgin Money Car Insurance showing that October is statistically the most dangerous month for drivers. Claims in this month are 25 per cent higher than the average, and a surprising 10.4 per cent of all car insurance claims happen in October, with the 20th of the month standing out as the most dangerous day of all.

Most car insurance claims are made in the last quarter of the year, a total of 30 per cent of the entire year's claims. The relative danger of this Autumn-to-Winter period is put down to the earlier darkness, worse weather and the fact that as a result, driving conditions becoming more hazardous. So what can you do in this perilous Autumn month to limit your chances to having to make a car insurance claim?

Grant Bather, spokesman at Virgin Money, said: "Traditionally Christmas time has been seen as the most dangerous time for drivers but our research shows that Autumn into Winter is treacherous for motorists. Car owners should make sure that they regularly check fluid levels, including brake fluid, oil levels, coolant and screen wash. "

As well as making sure your car is fully topped up and comprehensively serviced though, you need to be on top form as a driver to ensure you are constantly on the alert for possible hazards. According to a Department for Transport study, the top three causes of car accidents are failing to look properly, failing to correctly judge another driver's speed and driving carelessly due to being in a hurry.

Don't rush

It sounds obvious, but always leave yourself plenty of time to get to your destination. If you're going somewhere you have not been before, allow an additional 30 minutes on top of the Sat Nav recommendation - accurate as these gadgets usually are, they have been known to direct people into lakes in the past! Leaving enough time for a comfortable journey will also reduce the urge to speed or to drive recklessly in order to gain some extra minutes.

Keep alert

Never drive tired, since this will impact on your reaction time and dull your concentration. Pull into a service station for a 20 minute nap wherever possible, and if this is not an option, turn up the air conditioning or open the window for a blast of fresh air. It goes without saying that you should never, ever drink alcohol before driving. If you're tempted, especially approaching the Christmas party season, leave your car and make other arrangements for getting home.

Don't make it easy for thieves

Most car theft and other car-related crime is opportunistic. Fitting an immobiliser to your car actually makes it 10 times safer, according to Home Office research. Any other steps you can take to make your car less appealing to potential thieves, such as keeping your car in a garage and getting a wheel lock and car alarm fitted, will have the added bonus of reducing your car insurance premiums. Also, park in well-lit areas wherever possible, to keep you and your vehicle safer.

Keep covered

Regardless of how careful you are, accidents will sometimes occur. To ensure that you, your passengers and your car are fully covered in the event of a car accident, you should ideally have comprehensive car insurance. Due to increased competition between car insurance providers, a comprehensive car insurance policy will often cost you as much or even less than a third party fire and theft car insurance policy, but with many more benefits. When you consider the costs of repairing a vehicle, or of resolving a legal dispute with another driver, comprehensive car insurance is money well-spent. Get a car insurance quote with up to eight weeks' free insurance a year.

The best way to Compare Cash ISAs

2009-09-27T23:00:00Z

Each year, everyone in the UK aged 16 and above is given two Individual Savings Account (ISA) allowances, one for cash (Cash ISA) and one for investments (Stocks and Shares ISA). You are not obliged to use this allowance, but if you have savings it is well worth doing so, since any interest or dividends that you earn are tax-free. For basic rate taxpayers, this means that you effectively get an extra 20 per cent on your savings, and higher-rate taxpayers enjoy a massive 40 per cent extra.

ISAs have been in the news recently because the allowance is being raised from £7,200 to £10,200 per year, split equally between a Cash ISA and a Stocks and Shares ISA. If you are over 50, you can make use of this extra allowance from October 6th 2009, but if not, you have to wait until April 6th of next year. You can only have one of each ISA in any tax year, although they do not have to be with the same provider. So what is the best way to compare the cash ISAs offered by different providers, to make sure that you make the most from your savings?

ISAs are a government initiative to encourage people to save. They replaced Personal Equity Plans (PEPs) and Tax-Exempt Savings Accounts (TESSAs) in 1997. There used to be a difference between mini ISAs and cash ISAs, but now there is no distinction made, they are all simply ISAs to make it that bit simpler. Just as there are a number of different savings accounts, there are a wide range of ISAs on the market, and it's important to know what the distinctions are so that you can make an informed choice about which one is best for growing your money.

Compare Cash ISAs: What Criteria should you Use?

Access to your Money

Firstly, do you need to be able to access your money once it is in the cash ISA? If so, you should consider what is known as an 'Easy Access Account' where you can take money out or pay it in at any time without any charge. Interest rates for Easy Access Cash ISAs are usually variable, meaning that they will rise and fall according to the Bank of England base rate. Easy Access ISA providers sometimes offer a bonus period to encourage new savers, meaning that you would enjoy a higher rate of interest for a set period of time. Make the most of this, but keep an eye out to ensure your rate is still competitive after the honeymoon period is over.

Interest Rate Security

If you are able to tie up your money for a number of years without accessing it, a fixed rate cash ISA will be more suitable for you. As the name suggests, this account will offer you a fixed interest rate for the period in which your money is in the account, and this rate is usually more competitive than that of an Easy Access ISA account. With a fixed rate cash ISA, you are usually only able to make one deposit, so it is only suitable for you if you already have a lump sum of cash to invest. The benefit of a fixed rate cash ISA is the security of knowing that for the agreed period, your interest rate cannot change. If you are on a variable rate cash ISA on the other hand, the provider can cut your interest rate at any time so it is a far less stable means of saving tax-free. The downside is that if you find a more competitive cash ISA during your tie-in period, you are unable to move.

Make regular payments

A regular saver cash ISA may be a good alternative if you do not have a lump sum ready to invest, and instead would like to add to your savings in regular installments. Typically, you would be expected to add money to the regular saver cash ISA once a month for a period of a year, over which time your interest rate would be fixed. Since you have a fixed annual allowance for any type of cash ISA, the amount you can deposit in any one month is capped. You cannot usually withdraw money from the account within the year without incurring a penalty; either a fee or a drop in the interest rate.

Click here to find a cash ISA today.

Keep Track of your Extra Cash

2009-09-21T23:00:00Z

New research shows that there are thousands of tracker mortgage holders who could be taking advantage of the historically low interest rates to pay off their home mortgage loan faster. Advice website Unbiased has found that 53 per cent of tracker mortgage borrowers surveyed have not taken the opportunity to overpay on their monthly repayments, thereby potentially missing the chance to reduce their mortgage term.

So what are households doing with this extra, unexpected cash? 19 per cent are seeing the money as a boost to their day-to-day living expenses, while 24 per cent are using the savings to pay off other debt and 20 per cent are moving their extra cash to savings accounts. Two facts stand out as being a cause for concern; that 7 per cent are letting the balance build up in their current account, and that 12 per cent of the total surveyed do not want to overpay for fear that they will be charged by their provider for doing so.

If you are on a fixed rate mortgage deal, mortgage lenders will usually charge an early repayment fee in the first few years of your mortgage term. However for tracker mortgages, most lenders give you an overpayment allowance of up to 10 per cent more on your monthly repayments. Beyond this 10 per cent and you may also be liable for a charge, but check with your mortgage provider about this.

If you have the cash available and you will be charged for going beyond your 10 per cent allowance, consider putting the extra into a savings account that you keep specifically to help you out should mortgage rates increase significantly during your mortgage term.

Never keep spare cash in your current account, because the interest rates are rarely competitive and you could be missing out on earning valuable interest. It's also worth noting that the annual allowance for Individual Savings Accounts (ISAs) is increasing in April from £7,200 to £10,200 (and has already done so for everyone aged 50+).

David Elms, chief executive of Unbiased.co.uk comments: "Tracker and standard variable rate mortgage borrowers have watched interest rates plunge to record lows during this year, presenting an ideal opportunity to pay off their outstanding mortgage more quickly. Such action would enable many thousands of borrowers to take years off their mortgage repayment term, or enjoy a greater level of repayment comfort down the line, should the economy take longer to recover.

"Our research suggests most tracker borrowers are not taking this action, however we're encouraged by the large number who are using their repayment savings to erode their more costly credit card and personal loan debts. If you are confused about how to best manage your mortgage and take advantage of low interest rates, professional and personal mortgage advice can make a clear difference. Only a whole of market mortgage adviser will be able to advise borrowers on the best deal for their circumstances."

To speak to an experienced mortgage adviser from the SimplyFinance network, simply complete our short mortgage form, and someone will be in touch shortly to talk you through your options.

Find the Best Student Bank Account

2009-09-16T23:00:00Z

If you're heading off to university, you're a dream come true for high-street banks. As few as 20 per cent of people ever switch their bank account, so you represent many years of custom - and more than likely a few years of debt. Student accounts are different from standard current accounts in that they offer you an interest-free overdraft of up to £3,000, usually for the duration of your time at university and for several years after you graduate, although the maximum will usually diminish over time.

They will also usually offer useful extras such as mobile phone insurance or a USB memory stick as a way of standing out from the competition. It's easy to be tempted by great freebies and offers, but since your student bank account is going to play a very important role in your university career, it's important to make your choice for the right reasons; good value for money, account features that fit your lifestyle and a high level of customer service.  

An overdraft is a 'safety net' that means you are basically borrowing money from the bank, and most student account providers will allow you to pay no interest for an agreed period of time. As loans go, it is likely to be the best value unsecured loan available aside from a loan from the Student Loans Company, but as with any consumer credit product, you need to be disciplined in your finances to make the best use of it and avoid the fees and charges. Pick a student account that lets you have some leeway after you graduate, and that offers a competitive interest rate once your interest-free period runs out. Also make sure that you are aware of how much you are likely to be charged if you exceed your agreed overdraft limit.

The overdraft facility is likely to be the reason you choose a student bank account. For those living on a shoestring budget, having that extra cash available can seem like a godsend. However, it's important to remember that even though you will not have to pay the money back any time soon, you will do when you leave university and get a job. The last thing you want to do when you are starting to pay off your student loan and starting your first job is to have to pay back £3,000 in monthly installments, with interest.

Rather than simply removing your access to funds at the end of your limit, many banks will give you a buffer zone. Ostensibly, this is to ensure that you can get hold of money if you need it, but going beyond your limit also gives banks the option of charging you large fees (up to £50 daily). As with a standard current account, you are also likely to be charged a fee for unpaid cheques, direct debits and standing orders where the transaction cannot go through because of a lack of available funds.

Most student accounts come with a standard administration fee that is charged monthly while you are overdrawn. Banks will often offer extra benefits such as discounts on student-friendly products and services to make this fee more palatable to new customers. However it's rarely worth taking out an account purely on this basis - extras such as breakdown cover are only worth paying for if you are actually going to use them. Alternatively, consider opening a savings account or an ISA to run alongside your student account, so that you can transfer any spare funds to an account that earns you some money.

Student accounts are unlikely to be the most competitive on the market if you are in credit, since the overdraft benefits are seen to be the main reason that students find these accounts appealing. If you are careful with your finances and feel that you will probably not use an overdraft limit, shop around and see if a standard current account can offer you a better rate of interest on the money in your account. Whichever account you choose, remember that it is key to keep an eye on your money to ensure that you do not incur fees and penalty charges.

Below is an overview of the current crop of student bank accounts, freebies and all:

Natwest Student Account

Overdraft limit: Up to £1,250 in your first year, £1,400 in your second year, £1,600 in your third, £1,800 in your fourth and £2,000 in your fifth.
Other facilities: Chequebook, debit card/cheque guarantee card. Student credit card with a credit limit of up to £500 and up to 56 days interest-fee credit.
Banking Options: Mobile banking, telephone banking, in-branch and text banking.
Fees and charges
- No account charge as long as you stay within your agreed overdraft limit.
- Exceeding your overdraft: £28 per month
- Paid referral fee: £30 per day up to a maximum charge of £90 in any one month
- Guaranteed Card Payment Fee: £35 per transaction (maximum of £105 per day)
- Unpaid item fee: £38 per item (maximum of £114 per day)
Interest earned: 25% AER for balances up to £10,000
Freebies: 16-25 Young Person's Railcard, 4GB memory stick, discounts on mobile broadband, Asus laptops and 20 per cent off at lots of high-street shops.

Find out more and apply...

Royal Bank of Scotland Student Account

Overdraft limit: Up to £1,250 in your first year, £1,400 in your second year, £1,600 in your third, £1,800 in your fourth and £2,000 in your fifth. Also, up to £2,750 at any time, subject to application (and a credit check)
Other facilities: Chequebook, debit card/cheque guarantee card. Student credit card with a credit limit of up to £500 and up to 56 days interest-fee credit.
Banking Options: Mobile banking, telephone banking, in-branch and text banking.
Fees and charges
- No account charge as long as you stay within your agreed overdraft limit.
- Exceeding your overdraft: £28 per month
- 'Paid referral fee': £30 per day up to a maximum charge of £90 in any one month
- Guaranteed Card Payment Fee: £35 per transaction (maximum of £105 per day)
Unpaid item fee: £38 per item (maximum of £114 per day)
Interest earned: 25% AER for balances up to £10,000
Freebies: 2-for-1 Vue cinema card, discounts on gigs, shows and holidays, card protection, 4GB memory stick, discounts on mobile broadband and Asus laptops

Find out more and apply...

Barclays Student Account

Overdraft limit: Up to £2,000 interest-free with the option to extend it to £3,000 at a rate of 8.9 per cent
Banking Options: Online banking, telephone banking, mobile banking and in-branch banking.
Other facilities: Contactless debit card/cheque guarantee card, chequebook.
Fees and charges
- Reserve usage fee (£22 per 5 consecutive days when you exceed your overdraft)
- Returned transaction fee: £8
- Guaranteed transaction fee: £8
Freebies: 25 per cent off Orange mobile broadband (saving of up to £112.50 over an 18-month contract).

Find out more and apply...

HSBC Student Account

Overdraft limit: Up to £1,000 in your first year, £1,250 in your second year, £1,500 in your third, £1,750 in your fourth and £2,000 in your fifth.
Other facilities: debit card/cheque guarantee card, chequebook
Fees and charges
- Stopped cheques: £12 per cheque
Freebies: Two years free worldwide travel insurance, free TalkMobile SIM card with £5 preloaded, discounts on travel guides, music and Dell computers
Interest earned: 2 per cent AER on the first £1,000 during your first year

Find out more and apply...

British Saving Habits Revealed

2009-09-15T23:00:00Z

The average amount put away by savers has increased by 26 per cent since the start of the year, although 40 per cent of Britons are not saving anything at all, which is also an increase on previous figures. Research carried out by Abbey Savings suggests that those with savings and investment accounts are saving an average of £206 per month, compared with £163 at the start of 2009. Using average savings rates as a guideline, this means that British savers will be putting a total of £59.5 billion into UK bank accounts this year.  

So how are these savings being made? 20 per cent of savers polled have regular savings accounts, which are likely to have restrictions on how many times money can be withdrawn each year. 65 per cent of savers have an instant access savings account, giving them more flexible access to their money. Flexibility on access can lead to a lower interest rate, so it's worth thinking carefully about how likely you will be to need to get to your cash and then looking around at what the banks can offer.

An Individual Savings Account (or ISA) is a popular option for British savers; 42 per cent hold a cash ISA whilst 14 per cent have a Stocks and Shares ISA. ISAs can offer extremely reasonable returns on your money, especially considering that any interest that you earn will be completely tax-free (or any gains on your investments and dividends if you have a Stocks and Shares ISA).   

There is a maximum amount that you are able to invest into ISAs, currently totalling £7,200 - split into £3,600 for cash and £3,600 for stocks and shares. However, this is set to increase to a total of £10,200, in October 2009 for savers over 50 and from April 2010 for everyone else. Reza Attar-Zadeh, Director of Savings&Investments, comments: "At a time when it's never been more important to put money away for a rainy day, it's encouraging that the amount being set aside by savers each month has risen by more than a quarter. "  

"And it's not too late for those Britons who haven't yet kick started their savings habit to make a start - putting aside even a small amount each month will quickly add up to help provide them with a safety net in today's difficult economic climate. Opening a cash ISA offers savers one way of achieving this through a tax-free rate of interest to help make their money go further." Find out more about Individual Savings Accounts, or ISAs by clicking on the link.