It's Official - The UK Public Are Getting Cleverer With Their Cash

It would likely be surprising to few, but positive aspects of the ongoing recession are rarely mentioned in the press, in comment columns or on blogs. Yet, recent research from financial experts Moneynet and The Office for National Statistics has drawn attention to trends amongst the UK public showing that since the credit crunch we have become more sensible with our money.

Data recently published by the Office of National Statistics has shown that the household saving ratio has increased from 3.9 percent at the beginning of the year, to 5.6 during the second quarter. The rise has caused Andrew Haggar of Moneynet to comment: "People are now getting a bit wiser with their cash, putting it away to cover emergencies or unforeseen events such as unemployment."

Although the credit crunch and ongoing recession has seemed to make the UK public more conscious of the need to save, and to be more sensible with their cash, the competitiveness of fixed rate savings accounts have also been a direct influence on the habits of savers and spenders.

For example, interest on fixed rate bonds has increased from 2.87 percent to 3.53 percent according to moneyfacts. In comparison to average easy access accounts, the highest return on the best bond rates are around 2 percent more. Simply put, for anyone to make any interest out of their cash, they have little choice but to part with that money for a significant amount of time.

Similarly, ISAs have also hit the news again after new rules for over 50s were introduced in order to allow them to save more money tax free. Yet, despite the increase in options for older savers, competitive rates are still being seen by a range of providers with some banks offering accounts to savers both over and under 50. Prospective savers are becoming more savvy with the type of accounts they are opting for, but they are also willing to invest more time researching providers on and offline in order to get the best rates.

Paul Roberts writes about savings accounts, fixed rate savings, bonds and ISAs.

Savings 2009 - Can Debt Still Be a Friend?

As the era of tight budgets and scraping just enough to save continues, the notion that debt is a positive thing may seem ridiculous to many - it should be avoided at all costs, and it certainly shouldn't be available to someone who is likely not to earn enough to pay it back.

Yet, if debt wasn't as available as it is - i.e. if it were capped, what would happen when we really needed it? Most of us are paid by the month, and if at some point you need to make an emergency payment, on your car, or on your property etc, acquiring the capital to pay immediately is an absolute life-saver - and if for some reason it wasn't accessible could be potentially disastrous.

Thankfully, huge emergency payments are few and far between, but seeing as I'm writing this as thousands of university students invest a good chunk of their student loan in a Fresher's Week binge (I know I did), student debt is certainly worth a mention. Tom Cockreill (quoted in The Guardian) has the following to say about this: "Society seems to be happy to let debt accumulation start at university. It's all the more dispiriting that higher education, the bedrock of future prosperity and a more secure society, is paid for via debt."

This is certainly a curious aspect of modern day living. But would further education be as open and equal as it is if the system were not run this way? And additionally, what better time is there in one's life to come to terms with such an expensive, and important, investment - when they are enthusiastic and ripe for learning?

That said, it seems that for people of all ages there is still room for learning how to contribute to making their society less indebted - and it is going to be more difficult for borrowers to simply borrow to much in the future.

Perhaps more transparency is owed to students regarding how much they are paying and borrowing for university - and how much their course and grades are really going to be worth in the future if they achieve the best they can do so. But for those who are borrowing for other products, i.e. desirables, capping may be a good idea - at least to ensure that we are as a society are in control of debt - and it is no longer in control of us.

Paul Roberts writes about banking, student finance and savings accounts and best savings rates.

Can I Afford a Gap Year?

Much has been written recently about the cost of university, and the increasing number of young people put off by higher education due to the thought of so much debt after graduation. However, as the new term kicks off this month, it is clear that the recession has made the application process even more competitive as more mature students enrol, at the same time as jobs are cut, pay is frozen and more people find themselves without work. So what are the other options after college or sixth form?

Of course, a gap year has long been an acceptable way to spend time after secondary school in order to build up your 'life experience' and to enjoy some well-deserved freedom. But with so much concern about debt, can you really afford one? The easy answer is probably yes, but you must plan and budget carefully.

Whether you decide to volunteer close to home, or want to fly to the east coast of Australia, it is likely that you will need to save up some money for the experience. Of course, earning is one thing, but saving is quite another and it is important that you are taking enough money from your monthly pay and putting it somewhere safe. The more research you can do on this at the moment the better as the best savings accounts available tend to be fixed term - meaning you are more likely to get good returns if you leave your savings alone for a certain amount of time.

Another positive boon to your funding could come from tax. If you are only working for a few months before leaving and not working for the rest of the year, you may be eligible for tax back. If you earn £6,475 or less over a year you do not need to pay tax.

Once your funds are in place you need to estimate how you want to access it, and the currency (or currencies) you are likely to use. Internet banking is a great way for travellers because it is free and is available 24 hours a day. After you know what currency you will need and where, it may also be worth considering a prepaid credit card - despite the bad reputation there are certain credit card options available that are free of debt risk and allow you to take out foreign currencies abroad for no charge.

The next plan is to budget the trip. If you are travelling abroad it is becoming increasingly important to take out travel insurance - and it is a good idea to research specialist gap year cover. If you are planning any special activities such as extreme sports, ensure that these are included on your policy also.

Paul Roberts writes about finance for travellers, savings accounts and fixed term savings

Broadband tax to be made law - 50p per month

The 50 pence a month tax will apply to everyone with a fixed line telephone. Speaking at a debate in London, Mr Timms said the tax will be presented to parliament as part of the Finance Bill. But the Tory MP John Whittingdale said the tax, which could raise up to £175m a year to fund high speed networks, would be opposed by the Conservatives.

Are UK Universities Too Expensive?

As thousands of teenagers look over their A-Level results and decide what to do next, research from Child Trust Fund provider The Children's Mutual, has highlighted the cost of a three year university study to students and their parents. So are UK universities too expensive? And how can the financial strain be eased?

According to the latest figures from The Children's Mutual, for the average three year university course, a student will need to have around 42,000 pounds behind them - an amount of which a good proportion is likely to come from student loans. However, new research has shown that the rest of this funding is also likely to come from parents who are then either forced to take from their savings, or maybe even remortgage their house.

University costs are also likely to have been exacerbated by the lack of summer jobs available to those who are due to start their higher education in October. This has meant that unless children have been working during their A-Levels, they may have even less saved up for when they leave home.
Although it seems easy to label UK universities as too expensive, particular in regards to recent recessionary developments, in 2005 the government did establish the Child Trust Fund (CTFs) in order to ensure that future students will have a significant amount of money to fund their studies should they need it. CTFs are also intended as an incentive for both adults and children to open savings accounts - and to learn about the importance of putting money away.

However, it should be acknowledged that those eligible for a CTF must have been born on or after the 1st September 2002 - leaving a significant gap of future generations who are likely to be in a similar situation to this years graduates. Overall, the cost of this years graduates is said to be at around the 25 billion pound mark, 3 million pounds more than last year. If this is set to increase at the same rate, by 2015 this amount will have reached 43 million pounds. Consequently, if parents can afford to put any money away now, they should certainly do so - and as I write this, fixed rate bonds are currently a better option than ISAs in terms of average returns.

Paul Roberts writes about banking, savings and the best savings rates.

Research in Ireland Has Found That Women Are Better at Saving Money Than Men

Research in Ireland has found that women tend to be better than men at saving money. Of course, such 'data' will likely fuel the old 'it's official, women are better than men at something else - add that to the list above driving, multi-tasking and smelling nice,' argument that has been muttered, countered, and accepted since the dawn of time.

Yet, it also shows something more positive, i.e. that a nation also looks to be battling its way out of recession quite successfully - and that more people may now be aware of the importance of savings.


The research (collected and available at postbank.ie) shows that more than half (58 percent) of men and women asked in their Quarterly Savings Index consider the female of the species to be the better savers. Women themselves are confident that they the most frugal gender, with 65 percent claiming that they were the best savers. Yet, the actual statistics pitch men and women closer together - with 80 percent of men and 82 percent of women saving regularly - whilst men are said to put more away, with a third of those asked stating that they saved €250 a month.

The data is a good sign. The number of people devoted to saving is the highest in years, and the primary reason for doing so is security. This is a fact that is evident when one acknowledges the average decline in interest rates across the country - similar to that which is being seen in the UK and the rest of Europe - but it has also been backed up by nearly half (49 percent) of the postbank respondents who admitted they were concerned about the safety of their money at a time when possible unemployment is a lingering reality.
However, the risk of unemployment is clearly not the only reason that many are eager to put some money away each month. Clearly the system is showing its worth aside from the benefits of interest available at times outside of recession. With a small proportion of our income being deposited into our saving accounts automatically, it is easier to forget it is happening, and less easy for us to spend it without thinking. There is a barrier that doesn't exist when you're stuffing cash into your mattress.

With the global economic crisis, the public are seemingly reassessing the importance of saving and how it can best be managed at a time when it is seen as both difficult and vital. However, alongside each individual's assessment of their own responsibility and that of the banks over their savings, such control no doubt has a knock on effect on how they treat their finances generally.

How to Save for a Gap Year You’ll Never Forget

A gap year spent working or travelling overseas offers school-leavers or graduates the perfect opportunity to enjoy sun, sea, sand and adventure, before going to university or settling down to the world of work. So whether you fancy an extended holiday or a job volunteering for community or environmental projects in developing countries, the experience will be both unforgettable and could enhance your employment prospects when you return.

Start saving early

Before you start packing your rucksack, you need to remember that globe-trotting does not come cheap; fail to budget and your gap year could soon end up running into thousands of pounds. The key to a successful extended trip is forward planning – working out how you're going to finance it is just as important as deciding where to go.

Draw up a budget

Think carefully about your finances, and draw up a list of all the big expenses you might encounter, such as transport, food and accommodation. Also take the time to research the local cost of living – a good starting point is Lonely Planet.

Build up a cash reserve

While you may like the idea of working your way around the world, it may also be worth spending some time working here in the UK before you go. This will enable you to build up a cash reserve which could be held in a low-risk savings account paying a high rate of interest.

Where should I stash my cash?

A good starting point is a mini cash individual savings account (ISA) into which you can currently save up to £3,600 a year with no tax on interest (rising to £5,100 in April 2010).

Manchester building society is offering one of the “best buys” at the moment – paying 2.75% with no bonus on its Premier Instant Isa - although this does require a minimum balance of £1,000. For smaller balances, Standard Life is paying 2.65% on its Direct Access Isa on balances of just £1.

How to Ensure Your Savings are Safe

With so much turmoil in the banking sector over the past few months, savers are feeling justifiably jittery about the safety of their hard-earned cash – but just how safe are their savings?

Many are nervous about putting their faith in savings institutions, having had their fingers burned by the collapse of the likes of Northern Rock and the Icelandic banks. And while things seemed to have settled down a little of late, there are no absolute guarantees that other banks won't go the same way.

Are my savings protected?

The good news is, if you have your savings with a UK bank authorised by financial watchdog, the Financial Services Authority (FSA), you will have protection under the UK's Financial Services Compensation Scheme (FSCS). This is the official safety net for customers of financial firms that go bust, and guarantees your savings up to a limit of £50,000 - or £100,000 for a joint account.

Don't keep all your eggs in one basket



When checking the safety of your cash, you need to note that the FSCS level of protection applies per person, per authorised institution - and not per account. This means that if you have more than £50,000 with any one bank, you need to spread your money around between different providers.

You also need to beware that some institutions offer accounts under a number of brand names or subsidiaries which are all trading arms of the same authorised institution. If there is a single registration for the entire group, your compensation is limited to a total of £50,000 protection across all of its brands.

Some examples

HBOS, for example, operates savings accounts under the Halifax, Bank of Scotland, Birmingham Midshires and Intelligent Finance brands. However, all HBOS brands operate under a single FSA authorisation, so if you have £30,000 savings with the Halifax and £30,000 with Intelligent Finance, only £50,000 of the £60,000 total would be guaranteed.

In contrast, the UK banks owned by Santander are operating under two authorisations - one covers Abbey and B&B, and the other covers A&L. This means savers are covered for up to £50,000 across Abbey and B&B, and are also covered for a further £50,000 with A&L - but be warned that this could change from the middle of next year.

You can find more information on who owns who in this FSA download.

More info found here

Gold vending

Just an addition to our post about gold investments back in June.

Apparently it's soon going to be possible to buy gold from vending machines, just as you might buy a sandwich, a drink, a tube of sweets or a pack of postage stamps.

The idea is to install the new vending machines in airports, where people will be looking to disburse their money either on expensive guilt-assuaging last minute gifts. But the machines will also hold bullion - the notion being that it will also be possible to make investments by purchasing bars of up to 250 grams.

For the time being the only vending machine selling gold is in Frankfurt airport, but the machine's inventors hope to start moving their products in the UK and Asia soon, the best gold and precious gems markets in the world.

For those who dislike paying for their investments - think again - the machines are said to be built like tanks.

What's an Offshore Savings Account?

Offshore as a financial concept simply means placing money, wealth or assets in a country other than the one in which you live.

Typically it is the wealthy that place money offshore to take advantage of the favourable taxation regimes available in so called tax havens – but even for the likes of you and me there are advantages to the offshore savings world that we can all benefit from.

Offshore savings accounts allow people to either save a regular monthly amount or a lump sum, earn higher rates of interest from some offshore providers than we could if we saved ‘onshore’ with the local bank – and what’s more, we can earn our interest gross and only pay tax on it once annually which allows for extra compound growth in the interim which can give our savings a little extra boost.

1. Tax Free
   Most of us still have to pay tax on any income or gain that we derive even from investments or savings that are placed offshore. We are under an obligation to tell our local tax authority about any offshore savings accounts we have when we make our annual declaration to the IRS or HM Revenue and Customs. But because taxation is not deducted at source on the majority of offshore savings accounts we have up to a whole twelve months of compound interest giving our savings even greater growth power which makes saving offshore advantageous even when we ultimately do have to pay tax on the gains we derive from our savings.
   
   
2. High Interest
   The offshore savings accounts that offer the highest rates of interest are available to those in a position to regularly save large amounts monthly. Basically the more you can afford to save the higher the rate of interest you will be given, the higher the rate of interest the greater the compound growth you can earn and the harder your money will work for you.
   

A number of leading international banking providers offer offshore savings accounts that are easily accessible and secure. The award in 2009 for best offshore bank for expats was won by Anglo Irish Bank. You can open an account with them easily online and then have full access to your account and growth statistics online.

Gone are the days when saving and investing offshore was complicated, clandestine and the realm of the super rich or the super criminal – and we herald the arrival of an accessible concept of offshore from which we are all welcome to benefit.

Anglo Irish Bank - Best Expat Savings Account 2009

Leading expat magazine, Nexus, has voted Anglo Irish Bank Corporation (International) PLC winner in four categories in its 2009 Best Banks for Expats Awards, one of the most high profile and sought-after awards in the financial services industry.

The Nexus Awards are based on the number of times a savings account appeared in the magazine's monthly 'Best Buy' tables during the last 12 months. "Best Buy" accounts are those which offer the highest interest rate available at the time in the different categories of account.

Success in the Nexus awards confirms that Anglo Irish Bank has consistently offered competitive interest rates during the last year.

Anglo Irish Bank came top in four award categories:

• Best Offshore Bank for Expats, Overall (Winner)
• Best Offshore Bank for Expats, Sterling Notice Accounts (Winner)
• Best Offshore Bank for Expats, US Dollar Accounts (Winner)
• Best Offshore Bank for Expats, Euro Accounts (Winner)
  

Commenting, Anglo's Head of Personal Savings, Gary Quaggan, said: "When we launched our Privilege range of accounts we made a commitment to keep rates consistently competitive. Winning these awards for the fifth year running is a powerful and independent endorsement that we are delivering on that promise. The fact that we have also once again won in four award categories, including Best Overall Offshore Savings Bank, signals to expatriates, and others looking for international deposit accounts, that they can trust Anglo Irish to offer them a good deal across the board.

We aimed Privilege at a broad spectrum of investors, including expatriates who tend to have particularly busy lifestyles and can't always be expected to follow every rate change in the savings market. Many expatriates, therefore, find that Privilege's pledge to keep rates competitive over the medium to long term is something which particularly appeals to them. We like to think that our reputation for excellent customer service also plays an important part in winning and retaining investor loyalty".

Anglo Irish Bank Corporation (International) PLC first launched its Privilege range of deposit accounts in January 2002. Since then, its suite of deposit and fixed interest accounts has appeared regularly in the "Best Buy" tables.

All Anglo accounts are available to pay interest gross*, can be operated by telephone, in person, or online, and are available with a minimum opening balance of 5,000 in GBP£, US$, or Euro€.

*Subject to the provision of the European Savings Tax Directive

Sourced from Anglo Irish Bank [Link]

Invest in Gold?

Why right now could be a ‘golden time’ to invest

Another month, another statement showing your savings aren’t earning much interest. Maybe it’s time you thought about investing your money in something solid?

When recessions hit, the one reliable asset has always been gold – and in recent months, it’s outperformed almost every other form of investment.

But if you want to jump on the golden bandwagon, where do you start and how safe is it?

Why invest in gold?

It’s not just pirates who want to get their hands on gold coins these days. As stocks and property prices plummet, demand for the precious metal has rocketed.

The price of gold has been on the up since 2001, spiking at more than $1000 an ounce in March 2008. At the time of publishing, the gold price was $925.15 per ounce (£610.86)*.

The price of gold has been on the up for several years. In 2001, the gold price went as low as $255 per ounce. But the price spiked at more than $1000 an ounce in March 2008. At the time of writing, the gold price was $925.15 per ounce (£610.86)*.

Gold has been the traditional bell weather for investors over the centuries, particularly in times of economic stress. As governments around the world are spending more to prop up their economies, many people worry about inflation and whether the pound or the dollar will keep their value. If you can’t rely on paper money, the logic goes, rely on metal.

It’s also relatively easy to buy and sell and has a high unit value, which means a small amount is worth a lot! But it’s definitely not a short-term investment and remember, valuations can go down as well as up!

UK Banks Post Crunch - Who Owns Who

The financial turmoil of the past 18 months has led to a wave of consolidation in the banking industry, making it even harder to ensure you’re not putting all your eggs in one basket.

A recent article on Confused.com takes a look at today’s banking sector to find out who actually owns who on your highs street.

Why it matters

If a savings institution goes under, the Financial Services Compensation Scheme (FSCS) will provide compensation of up to £50,000 to single account holders and £100,000 for joint accounts.

However, it’s important to note, the compensation limit applies per banking licence and not per brand, meaning it’s crucial you know who owns who.

When it gets confusing

Staying within this compensation limit is not as simple as just making sure you don’t have more than £50,000 saved with one banking group.

Some banks have merged but continue to operate their bands under different banking licences. In some cases, special measures have been put in place so that merged groups are treated as having separate licences, even though they don’t.

While you won’t go wrong if you ensure you don’t have more than £50,000 saved with any one institution, you could potentially miss out on good returns if two brands within one group are operating under separate licences and both have competitive deals.

Read a guide to the big bank operators in the article

The Age of Insurance: Are we being discriminated?

The age of an individual has always been an issue when it comes to insurance. Yet, it seems that with the spotlight currently firmly on the industry as it finds itself at the heart of the economic crisis (at the same time striving to assure customers that cover is no less relevant and affordable), a wave of criticism regarding age discrimination by insurers has been seen in the media. So are we being discriminated against by insurance companies?

One of the issues that can be seen to hinder the trustworthiness of these discrimination claims is the fact that they seem to have been borne from the work of comparison websites. Without mentioning any comparison site specifically here (and I endorse the usefulness of such services), reports at moneynews.co.uk state of one site’s research which found “that young drivers pay more for their insurance”. (This is in April 2009 under the headline: Car Insurance Industry Rife with Discrimination.)

The first problem here is that this is nothing new: 17 and 18 year-old drivers have had to pay expensive premiums for car insurance cover for years now, and the shocker is that this is still increasing (as are most policies). I acknowledge, also, that a 17 year-old girl must pay 58 percent more than her 18 year-old friend – and this is alarming.

However, I do think we need to understand two things. The first is the process by which car insurance premiums are calculated for individuals with no or minimal driving background. Other than their peer group, where else can insurance companies look in order to ascertain the risk and its subsequent monetary equivalent? The second thing to remember is when the implied (or sometimes, outright stated) answer to a newsworthy issue is to compare quotes from different companies, possibly via a very hand comparison site, then such “reports” are likely to be biased.

That said, in a separate report at the same site (and with research carried about by the same comparison website), a more unfair and less justifiable trend has emerged in the travel insurance sector.

The report, Travel Insurance Prices ‘Hiked Overnight’, states that a 66 year-old individual will pay an average of 106 percent more for a policy than a 65 year-old – a difference that is far more extreme, and which doesn’t appear to need to depend so much on a general peer risk assessment when an individual medical report and the risk of destination can be taken into account. I suppose the lesson here is to keep an eye on your policies with the same fervour you question your information sources.

Home Insurance Fraud: Don’t Be Lured to the Darkside

When the going gets tough, the tough sometimes get fraudulent. Recent figures released by the ABI (Association of British Insurers) have shown a record level of fraudulent insurance claims, proving people are willing to use their insurance policies as a way of bringing in extra cash.

According to statistics, 2000 fraudulent claims are made every week, amounting to an estimated value of £14 million.

What is insurance fraud?

If you make an insurance claim for something that either hasn’t happened, or you know to be wrong, you’re committing insurance fraud.

How much fraud is there?

The most common form of fraudulent claims is for home insurance - 55,400 frauds were detected last year at an estimated value of £110 million.

Why are there so many claims?

There are more opportunities for fraudulent home insurance claims than for any other class of insurance.

Car insurance fraud, for example, requires a little planning to orchestrate a convincing accident or theft. However, spilling paint on your sofa in order to get a new three-piece suite, is much easier.

Who’s guilty of insurance fraud?

A YouGov survey of 3000 adults, showed one-in-five admitted they’d be tempted to cheat on their insurance - despite the likelihood of getting caught.

But if you think cheating’s a quick way to boost your bank account, think again – the insurance inspectors will be after you!

The crackdown on fraudsters

“Fraud thrives in a recession, so insurers are intensifying their crackdown on insurance cheats,” says Nick Starling, ABI’s Director of General Insurance and Health, on the ABI website.

Claimants may have to provide minute detail, and may even find forensic experts getting involved, all in an effort to stem the tide of fraudulent claims. And if found out, fraudsters may be blacklisted by insurers, or may even gain a criminal record.

Fraud makes home insurance more expensive

Cracking down also prevents honest policyholders paying the price.

“Fraud adds an extra £40 a year to the average premium,” says Starling, “which is why the harder we make it for the cheats, the more competitive premiums will be for honest customers.”

For more information on home cover, read Confused.com’s Home Insurance Buyer’s Guide.

Sourced from http://www.confused.com/featured-articles/household/home-insurance/home-insurance-fraud-don-t-be-lured-to-the-darkside-3540983065

How to Cope if you Lose Your Job - A Survival Guide to Redundancy

Tips and advice on how to deal with being made redundant

The dreaded ‘R’ word. It’s one you hope never to hear. But, worryingly, redundancies have been on the increase ever since the economy took a tumble.

The current economic climate has forced many companies to close and put many jobs under threat. Employers often resort to making staff redundant as a way of cutting costs. Implementation of new technology/systems or a workplace relocation can also deem a job redundant. 

Who can be made redundant?

• Any employee under contract of employment – written, verbal or a combination. Just turning up to work constitutes an agreement of employment.

Who is eligible for a redundancy payout?

To be eligible for a payment, you should meet all of the following criteria.

• You need to have been in continuous employment for at least two years.

• You are over the age of 20 at the time of dismissal.

• You have been dismissed by reason of redundancy.

What are your entitlements?

Unless a more generous settlement is written into your employment contract, you will receive only the statutory minimum redundancy pay. This is based on how long you’ve been employed, your age and your weekly pay.

Statutory Minimum Redundancy Pay

The amount is calculated as:

• Aged 41 or over - One and a half weeks’ pay for every full year

• Aged 22-41 - One week’s pay for every full year

• Aged 18-22 - half a week's gross pay for each year worked (as long as you worked in the same job beyond the age of 20).

If your employer doesn’t give you redundancy pay when you’re entitled to it, you should write to them asking for payment. If your employer still refuses to pay or cannot make the payment, you could make an appeal to an Employment Tribunal.

Note: The 2009 budget announced that the weekly rate of statutory redundancy pay will increase to £380.

Resource: The Advice Centre

Tips for dealing with redundancy 

Budget: Draw up a comprehensive plan of your out-goings. Where can you save money and how can you make best use of your cash? Speak to a financial advisor if necessary.

Claim your benefits: Depending on your savings and record of National Insurance contributions, you may be entitled to state benefits. Make an appointment with your local benefits office to find out more.

Invest: If you’re lucky enough to receive a substantial payout, think carefully about what to do with the money. You could pay off debts, or put it in a higher-interest savings account or ISA. Again, consider speaking to a financial advisor if necessary.

PPI: If you’re still employed and worried about the future of your job, you might consider getting payment protection insurance (PPI)? This could help pay a proportion of your monthly bills and offer support for a fixed period while you hunt for a new job. 

Source: How to Cope if you Lose your Job

The 6 Big Reasons to Switch Energy Providers

Now that all of the ‘big six’ energy companies have cut their prices, here are six reasons why right now could be a great time to switch.

nPower’s recent energy rate cut – 7.5% for electricity customers – means that all the major UK suppliers have dropped their prices since the start of 2009. So if you’re with nPower, British Gas, EDF, E.ON, ScottishPower, or Scottish & Southern then your bills could be about to drop – but only if you’re on the right tariff.

Finding a cheaper tariff is easy these days with the energy comparison sites. Enter a few details into simple online forms and you’ll see all your local energy options appear onscreen within seconds. And if like most energy customers you haven’t switched in a while, there’s a very good chance you can slash your energy bills by even more than the announced cuts.

For many, the chance to save up to £252* on their gas and electricity bill is all the reason they need to switch energy provider, but just in case one reason’s not enough, here are…

…The Big 6 Reasons to Switch Right Now

1. Save up to £252*
nPower, British Gas, EDF, E.ON, ScottishPower and Scottish & Southern have announced rate cuts, but some have cut more than others. Therefore, even if you're with one of these providers you could save even more by switching.

2. Lower your standards
If you're on a standard tariff then you're almost certainly paying too much. Don't believe us? Then compare energy prices right now to see what you could be paying.

3. Get online!
You could further increase savings by signing up to an online tariff. Posting bills and waiting for cheques to clear costs energy providers time and money, and they're willing to offer discounts if you agree to paperless billing and paying by direct debit.

4. Colder weather = more savings
Summer is still a way off, and as people use more energy during the colder months, switching to a cheaper tariff now means you'll save even more.

5. FREE smart meter
If you switch to a First:Utility tariff, they’ll install a smart meter for free. Ofgem want to have a smart meter in every household by 2020, so here’s your chance to beat the deadline by a dozen years. Plus, monitoring your energy consumption more closely means you could save as much as 15%** off future bills.

So now you’ve read our big six reasons to switch energy supplier, you’ll probably want to get straight to it, in which case, just follow the link below to see how much you could save.

I'm a Bank, I'm a Credit Union Video

Taking a leaf out of the i'm an Apple, i'm a PC adverts, here is i'm a bank, i'm a credit union video.

ISA Allowance Increased By £3k

Chancellor Alistair Darling's latest Budget has given savers a boost, with a £3,000 increase in the annual allowance under tax-free ISAs. The new total annual allowance will be £10,200, rising from the current £7,200 limit, and will apply to those aged 50 and over from this year. The increased allowance will be extended to everyone in 2010.

Mr Darling said that the new overall allowance included an increase in the cash limit from £3,600 to £5,100. Since their launch 10 years ago, almost £290 billion has been saved in tax-free ISAs, the Chancellor said, with 18 million people having taken them out.

All money held in an ISA grows free of tax, with savers currently able to put in up to £7,200 a year in equities or a combination of equities and cash. The latest Budget announcement marks the second ISA allowance increase since their introduction in the 1999 Budget to replace former tax-efficient savings vehicles PEPs and TESSAs.

The total allowance was increased last year from £7,000 to £7,200.

Savings: Tax-free savings boost to combat lower interest rates

Hard-pressed savers received a welcome boost in the Budget, with the Chancellor announcing that the amount of money they can pay into an Individual Savings Account each tax year will rise from the current £7,200 to £10,200. The popular cash element of ISAs will rise from £3,600 to £5,100. The new higher ISA thresholds will come into force this tax year for people over 50 and for everyone else from April 2010.

All money paid into an ISA is allowed to grow free of tax. The Treasury estimates there are 18 million ISA account holders and successive cuts in interest rates, as the Bank of England has slashed the cost of borrowing, have left them out of pocket. Pensioners, who rely on interest from their savings to cover living expenses, have especially felt the pinch as a result of the rate cuts. When the plight of savers became clear a few months ago, Treasury insiders promised a "Budget for savers" but in recent weeks such talk has been muted. Yesterday's move on ISAs was therefore greeted with some relief. Adrian Coles, director general of the Building Societies Association, said: "The recent interest rate cuts have meant savers have seen their income drastically reduce, so this will help give a greater incentive to save."

However, the tax break will do little to repair the damage already done to savers' finances from cuts in rates paid by banks and building societies. Raising the cash ISA limit will put an extra £30 a year back into the pocket of savers who have the maximum annual amount of money invested in an ISA, based on the current average rate of interest of just 2 per cent, according to financial information firm Defaqto. Last autumn, savers could routinely find cash ISAs paying more than 6 per cent interest.

Savers are also concerned by the cutbacks on pension tax relief for higher earners. "This could be the thin end of the wedge," said Peter Timberlake of insurer Friends Provident. "What is to stop the Government lowering this £150,000 limit to £100,000 or £50,000 in the future, gradually dragging people in? We have an ageing population and a pensions saving shortfall in this country. The Government should be encouraging saving for retirement, not making it less tax efficient."

Sourced from Independant [Link]

High Earners Given ISA Advice

High earners can avoid some the tax hikes announced in the latest budget by shifting more of their salary into a pension fund and increasing ISA contributions, according to experts.

The Institute for Fiscal Studies said the 50% tax rate may not deliver the full amount of revenue the Treasury had hoped unless the Government brings in more stringent measures to block avenues of tax avoidance.

Chancellor Alistair Darling has already cut pension contribution relief in a bid to stop those with high salaries placing more of their wage into a pension fund to pay less income tax.

But this still works out as a good option for the next two years, before the new 20% relief rate is brought into force.

Expanding on the revenue maximisation theme, senior tax partner at BDO Stoy Hayward Stephen Herring, said: "The first basis is to maximise pension contributions in the next two years, and maximise contributions to ISAs noting that the limit goes up to £10,200 in October for the over 50s and for everyone else in April next year.

"Then if you're of the mindset that you're willing to take a high level of investment risk, you can look at the Enterprise Investment Scheme and Venture Capital Trusts which provide tax relief."

Sourced from Confused.com [link]

Tesco's Bank Savings Balances Boost

As supermarket chain Tesco announced record annual results, it also revealed it has seen a near-doubling of savings balances at its retail banking arm since the downturn began.

Since last autumn's financial crisis began, Tesco has relaunched its banking operation, Tesco Personal Finance (TPF), as a safe haven for savers to deposit their cash.

TPF has gained success through low consumer confidence in established brands, particularly among its own loyal customers, as the saving balance rose from £2.5 billion in mid-October 2008 to more than £4.5 billion by the end of February.

The group appears to be turning TPF into a full-service retail bank as it has now bought out former partner Royal Bank of Scotland to take the 50% it did not own last December.

Tesco plans to open 30 bank branches in its stores by the end of this year, following a trial which has been running in Glasgow since 2006.

TPF now has six million customers since it launched 11 years ago and offers services including credit cards, pet insurance, bureaux de change and savings accounts.

Sourced from Confused.com [link]

Guide to Savings 2009

Need to save cash? Which account is right for you? With Bank of England interest rates at a record low, getting the best possible return on your savings has never been more important. In today’s market, it really pays to know your ISA from your fixed-rate bond.

Follow Confused.com’s guide to savings accounts to ensure your money is in the right place…

1. Instant access accounts

These accounts, also known as no-notice accounts, enable you to get your hands on your cash without restrictions.

The most recent figures from the Bank of England show the average interest rate paid on a branch-based instant access account has slumped to just 0.17%. But don’t despair - you can get up to 15 times this amount by shopping around for the best rate. Try Confused.com when comparing savings accounts.

GOOD FOR: People who want the security of knowing they can get hold of their money without having to wait. But, you’ll pay for the privilege, as these accounts typically offer the lowest returns.

2. Notice accounts

Under these accounts you generally have to provide notice of between 30 and 120 days to withdraw your money. As a result, these accounts may not be suitable for people who think they might need their cash in a hurry, but they do tend to offer higher rates than instant access accounts.

GOOD FOR: People who are confident they could wait for the required notice period.

3. Internet accounts

The overheads involved in running these accounts are lower than on branch-based ones. This is reflected in the interest rates they offer, which are usually higher than on instant-access accounts. Internet accounts often let you withdraw your money without giving notice.

GOOD FOR: Web savvy people who need instant access to their cash but want to get higher returns than on branch-based accounts.

4. Regular savings accounts

Banks and building societies have become increasingly reliant on using savers’ money to fund mortgage lending since the credit crunch struck, and this has led to many groups launching regular savings accounts.

Under the terms of the accounts, you agree to pay in a set amount of money every month for a year, although it’s sometimes possible to vary the sum. You can’t withdraw any of the money until the end of the year, when the interest is added to it and the total is usually transferred to a lower interest account.

GOOD FOR: People who have spare cash to set aside every month and for people who need a little help with the discipline of saving. Not so great for anyone with a lump sum to invest, as the money can only be paid in on a monthly basis.

5. ISAs

The benefits of ISAs shouldn’t be underestimated in the current low-interest rate environment. Not only do the accounts typically offer higher interest than instant access and notice accounts, but holders don’t have to pay any tax on the returns they receive.

As a result, a higher rate taxpayer needs to earn 1.67% on a normal savings account just to equal every 1% they earn through an ISA, while a basic-rate taxpayer would have to earn 1.25%.
You can pay up to £3,600 a year into an ISA, and with many of the best-buy deals offering instant access to your money, it’s hard to see a downside.

GOOD FOR: People who want to save long-term and can afford to lock in money for 12 months.

For more information on ISAs, see Confused.com’s guide to tax-free savings.

6. Fixed-rate bonds

These are the accounts that are paying the best return at the moment, with many fixed-rate bonds offering interest of more than 4%.

The reason for the high rates is depositors have to lock up their money for a set period of time, generally between one and five years. Interest is either paid annually or when the investment matures.

GOOD FOR: People whose main consideration is to get the best possible return on their cash.

7. Monthly interest accounts

These tend to be notice accounts upon which the interest is paid monthly rather than annually. The rates paid on the accounts are usually slightly lower than for notice accounts, to reflect the fact you get the interest sooner.

GOOD FOR: Retired people who are using their savings to boost their income. And those hoping to live off returns on their savings, such as during a career break or maternity leave.

Log on to Confused.com to compare savings account rates.

Sourced from Confused.com [Link]

Young People Turning Backs On Debt

Research has found that young people are turning their backs on spending and credit cards in favour of saving money.

A poll by Ci Research found that 70% of people aged between 16 and 26 are not comfortable with accumulating debts and would rather save up for things they want to buy. They added that they would only borrow money as a last resort.

However, figures show that there are young people who are less reluctant to take on debt, with 4% of the 500 people questioned saying they did feel very comfortable with debt.

The survey found that the economic downturn is having a significant impact on young people's saving habits. A quarter of people said they were now saving more than they had been and 19% plan to set aside more cash.

A further 62% said they did not have a credit card and 75% said they were keeping a close eye on their finances. Just 12% of those questioned said they were saving less or had stopped saving altogether.

Colin Auton, of Ci Research, said: "The report reveals undeniable proof that recent economic changes have influenced young people's behaviour and opinions on both spending and saving."

Sourced from Confused.com [link]

Top 10 tips to a budget friendly wedding

Top 10 tips to a budget-friendly wedding. While you want your wedding to be one of the most memorable days of your life, you don’t want to spend the rest of the marriage paying for it.

If you’re planning on walking up the aisle anytime soon, follow these top 10 tips and start your married life stress-free. First things first...

...Work out a budget (and stick to it!)

When it comes to tying the knot, the only thing you really need to pay for is the marriage licence - everything else is up for discussion.

Sit down with your husband or wife-to-be and think about what you both want from the day. How do you want it to look? What feel are you going for? Keep in mind how much you want to spend and how much you can realistically afford.

Remember, the tiny (and costly) details that can seem so important often go unnoticed by guests. It’s the overall atmosphere that you’re looking to achieve. Use the internet to gauge a rough idea of costs, and once you’ve arrived at a budget - stick to it!

Top 10 tips to a budget-friendly wedding

1) Maximise your savings

The first thing you’ll want to do is free up as much cash as possible to pay for the wedding. You could be wasting hundreds of pounds a year by paying too much for certain services.

For example, do you have the right savings account? Switching to a higher-interest account will earn you more on your savings, making it quicker to reach your wedding budget.

Less accessible but with generally better interest is a cash ISA account. Other ways you could free up cash to turn into savings include changing to a lower-interest credit card, switching gas and electricity supplier, replacing an expensive loan with a cheaper one, or saving money on home insurance, car insurance or life insurance.

All these potential extra savings could go towards your big day or honeymoon.

2) Prune the guest list

Look at the guest list. Don’t feel you have to invite anyone you haven’t spoken to in years or give singletons a plus one.

3) Bag a bargain dress

Keep an eye out for wedding and bridesmaid dresses on the high street or online. Discount sales can prove fruitful and as the wedding dress will only be worn once, you could even look at renting a second hand number.

4) Tie the knot on a cheap date

Carefully consider the wedding date. Does it really have to be on a Saturday at the height of summer? Winter months, weeknights and Fridays or Sundays can work out a lot cheaper.

5) DIY invitations

If you’re a whizz on the computer or have a talent for calligraphy, why not make your own invitations? The DIY route could save you a bundle.

6) Use your friends

Do you know someone who’s an amazing cook, photographer or DJ? If so, ask if they’d like to be a vital part of your special day. They may do it for love, or at least give you mate’s rates.

7) Flowers of romance

Buy flowers that are in season to help keep costs down. Maybe decorate the church with candles rather than flowers – a much cheaper option.

8) Get me to the church on time

Cars are another budget-busting cost. If you have a friend with a grand set of wheels, ask if they’ll do the honours.

9) Food and drink

This is the biggest cost of a wedding. A buffet can be more budget-friendly, and as for the bubbly, Cava makes a cheap and tasty alternative to Champagne. Serve it later in the evening and no one will know the difference!

10) The honeymoon

Honeymoons can be seriously expensive. These days, the most competitive deals can be found online, so get trawling for the best honeymoon packages. And don’t forget to get your travel insurance online as well – likely to be much cheaper than if bought on the high street.

Sourced from Confused.com [Link]

Confused.com’s Guide to Safe Savings

Top tips on how to keep your money safe. These are worrying times for savers. Not only have interest rates fallen to record lows, slashing the returns people can earn on their money, but there have also been a number of high profile banking collapses.

Unsurprisingly, many consumers have been left wondering if they wouldn’t be better off stuffing their savings under their mattress.

But, by following a few simple rules, people can easily keep their money safe, while still earning a decent return on their savings at the same time. Just follow Confused.com’s top tips…

The savings safety net

The good news for savers is that the UK has a savings safety net, known as the Financial Services Compensation Scheme (FSCS). The scheme will pay compensation of up to £50,000 to single account holders who have lost money as a result of a bank or building society going under, and up to £100,000 for joint accounts. The scheme currently pays out within three months, and there is talk of speeding this up to as quickly as seven days.

Banks versus brands

However, things can get a bit complicated. The FSCS will only guarantee up to £50,000 or £100,000 per banking licence and not per brand. As a result, those who have more than this amount in savings with different brands - which are part of the same banking group - could still lose out if their bank goes bust. It’s therefore important to ensure that your money is spread around different banking groups and not just different brands.

Things have been made particularly complex by the recent wave of consolidation in the banking industry. For example, Lloyds TSB and HBOS are now part of the same banking group, but continue to trade under different banking licences, meaning they have separate compensation limits under the FSCS. But Halifax, Bank of Scotland, Birmingham Midshires and Intelligent Finance all trade under the same licence.
Similarly, Abbey, Bradford & Bingley and cahoot are under the same licence, while Alliance & Leicester is under a different one, although they’re all owned by Spanish banking giant Santander.

Government Guarantees

For people who are worried about the safety of their cash, there are a number of institutions that have government guarantees.

National Savings and Investments is backed by the UK Treasury, which sees the group boasting that it’s 100% secure, while Northern Rock has also been nationalised – making it similarly secure.
All money invested in Irish banks is guaranteed by the Irish government, including money that is held in the UK arms of Irish institutions. As a result, the Irish government guarantees any money held in Post Office savings accounts, as the accounts are provided through a joint venture with the Bank of Ireland.

5 top tips to keep your money safe

1. Spread your cash around. Even if you don’t have more than £50,000 worth of savings, it’s still worth holding it with different institutions, just in case the worst happens, and you’re left without your money while you wait for the FSCS to pay out.
   
   
2. Check your savings provider is covered by the FSCS or a similar foreign scheme. All savings providers, authorised by the Financial Services Authority in the UK, are covered by the FSCS. Some foreign providers may also be covered by the scheme, while others will just be covered by their home country’s scheme, which in some cases could pay out less than the FSCS.
   
   
3. Make sure you know who would refund your money if things went wrong and how much you’d get back. The easiest way of establishing this is to simply ask your bank.
   
   
4. Make the most of the security offered by government-backed institutions.
   
   
5. Take advantage of the savings guarantees being offered by the Irish government.

While it’s important to keep your money safe, savers should still try to get the best returns on their cash. Compare savings with Confused.com to make sure your money is working hard for you.

Sourced from Confused.com [Link]

ISAs: A Guide to Tax-Free Savings

Making the most of your annual ISA allowance. As interest rates dive to record lows, there’s never been a more important time to get the best possible return on your money. Key to doing this is ensuring you don’t hand over more cash to the taxman than you have to.

But does that mean investing in an offshore tax haven or working out a tax avoidance scheme? Not at all. Tax-free savings simply means making the most of your annual ISA allowance. Read this guide for more information...

What is an ISA?

ISAs, or Individual Savings Accounts, were introduced in April 1999 to enable people to save a certain amount of money each year without having to pay tax on the gains they make, or the interest they earn.

In other words, ISAs are an incentive for you to save.

Savings levels

Consumers can currently save up to £7,200 each tax year into an ISA. They can either invest the full amount into stocks and shares, or they can save up to £3,600 in cash, with the remaining balance invested in shares.

No tax is paid on the interest earned through cash ISA savings, while any money built up in an equity or shares ISA is free of capital gains tax, although a 10% tax is still automatically charged on any income from share dividends.

Is it still worth it?

Historical data from the Bank of England shows that the average returns paid on ISAs are typically higher than on other savings accounts, and this is before the tax advantage.

But more importantly, paying tax on savings actually eats into the returns you’re getting. For example, a higher rate taxpayer needs to earn 1.67% on their savings just to equal every 1% they earn through an ISA, while a basic rate taxpayer would have to earn 1.25%.

As a result, a higher rate taxpayer would have to find a rate of 5.01% on a normal savings account to equal an ISA rate of 3%. In the current climate, returns of 5% are hard to find, showing the benefits of using an ISA.

Although the tax-free returns benefit may not seem huge when you’ve saved only one year’s worth of the allowance, it will be fairly significant by the time you’ve tucked away £3,600 a year, plus interest, for 10 years!

Where to get an ISA

As with other savings accounts, shopping around for the best rate is key. You can find a selection of cash ISAs and shares ISAs on the Confused.com ISA page.

You can only pay into one cash and one shares ISA each tax year, so it pays to pick a good one.

If you already have an ISA but are worried that it’s no longer offering the best returns, you can move your savings into a new account. But it’s important you get your existing provider to transfer the funds for you. This will ensure you don’t lose the ISA status on the money you’ve already saved.

It’s also possible for people to transfer the money they’ve saved in a cash ISA into a shares one, although money in a shares ISA can’t be transferred to a cash one.

Sourced from Confused.com [Link]

Guide to Maternity Pay 2009

Know your rights before you go on maternity leave- If you’re a new parent, it can be tricky managing that work/life balance with the demands of paying off your credit card and household utilities.

Therefore, it’s important to know exactly what pay you’re entitled to when you go on maternity or paternity leave. Confused.com’s guide will help you to know your rights.

Statutory pay

In a nutshell, if you’ve been employed by your current company for 26 weeks by the time you are 15 weeks away from giving birth and you’re earning more than £90 a week, you’re entitled to Statutory Maternity Pay from your employer.

If you’re unemployed, or have been in your current job less than 26 weeks, you’re entitled to Maternity Allowance, which is paid by the state.

You can claim Statutory Maternity Pay (SMP) for up to 39 weeks but you need to tell your employer at least 28 days before the date you wish to start claiming. The earliest you can take it is 11 weeks before your baby’s due.

SMP is calculated at 90% of your average weekly earnings for the first six weeks, then up to £117.18 (£123.06 from April 5, 2009) for the remaining 33 weeks.

Company pay

The amount you get from your employer depends on whether the company has its own maternity pay scheme.

Check with your HR department for the exact details, but some companies pay your full salary for the first six weeks of maternity leave and offer extras after that.

If you can’t get SMP from your employer, you may be entitled to the Maternity Allowance, which is £117.18 (£123.06 from April 5, 2009) for up to 39 weeks.

Tapping into extra benefits

You’re entitled to take up to 52 weeks’ maternity leave in total. If your baby was born after October 5, 2008, your employer must continue to give your contractual benefits, e.g. gym membership, and your pension throughout your leave.

And to stay up-to-date with office life, you can take up to 10 ‘Keep In Touch’ days, allowing you to come into work during maternity leave.

Your employer may also offer a return-to-work bonus, which you can get as a lump sum when your leave ends. There may also be childcare vouchers and flexible working schemes available, which can help to ease you back in.

Government boosts

There are a number of financial benefits from the Government for expectant and new mums, which help with the costs of bringing up a baby. So you don’t have to rely too heavily on your savings.

From April 2009, all mums-to-be can claim a one-off tax-free payment of £190, called the Health In Pregnancy Grant. Once you’re more than 25 weeks pregnant, you can get a claim form from your midwife, who will confirm your due date.

Alternatively, if you, or your partner, are on Income Support or receiving a Jobseeker’s Allowance, you’re eligible for the Sure Start Maternity Grant - a one-off tax-free payment of £500 to help with the cost of bringing up your child.

Benefits from birth

Once your baby’s born, you might be entitled to tax credits if you work, but earn a low wage. Any parent with children under the age of 16 can claim a Child Benefit. This gives £20 a week for your eldest child and £13.20 a week for each child after that.

If you’re already receiving a benefit or you’re pregnant and under 18, you could qualify for Healthy Start vouchers, worth £3 a week. These can be used to buy milk, fruit and veg.

Find out more about these benefits and exactly what you’re entitled to at www.directgov.uk.

Taking paternity leave

For all those expectant fathers, when your other half gives birth, you might be able to claim Statutory Paternity Pay (SPP) from your employer.

To qualify, you must be the biological father or be taking responsibility for the child’s upbringing. You must earn more than £90 a week and have been working for your employer for 26 weeks by the 15^th week before the baby’s due.

After telling your employer you plan to take leave, you can take two weeks of SPP, which is £117.18 per week or 90% of your average weekly earnings if this is less.

Before baby arrives

Sorting out your maternity and paternity pay is one of the many things to do before your baby arrives. Then there’s the shopping list: prams, baby clothes, car seats, toys – your credit card could be in overdrive!

So set some time aside to sort your finances. Have you cleared your credit card? Are you on top of mortgage payments? Compare all of these and sign up for a great deal with Confused.com.

Once that’s done, it’s time to think about savings. If you’re pregnant or planning a family and are currently in full-time employment, the drop in wages can be hard to swallow when you decide to leave and bring up a baby. So as soon as you possibly can, you may want to consider making time to get a good savings account or ISA and stash as much cash in it as you can!

Sourced from Confused.com [Link]