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.