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
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.
- 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. - 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.
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)
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.
Read a guide to the big bank operators in the article
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
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