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You can take part in the Secure Trust Bank’s Debt Awareness Survey to find out if you are a Savvy Saver, a Spirited Spender, a Brainy Budget or a Jammy Juggler. It only takes a few minutes to answer the 10 questions. I came out as as an 89% Savvy Saver, quite fitting for a canny Scot.
UK consumer debt totalled £207 billion in December 2011; that’s a lot. Maybe by bringing some humour into discussions about debt, Secure Trust Bank can encourage people to take the first steps toward mastering their money.
I agree that there’s been too much rampant consumerism in the UK, with people buying things that they can’t really afford. While spending is supposedly good for the economy and jobs, spending that’s not supported by adequate income has serious consequences.
We prefer to live debt free. It means that we don’t have to pay any interest on loans. I use credit cards for all purchases which don’t incur a surcharge, but I pay off the full balance every month and get at least 1% cashback on the montly spending.
I noticed when I went into the Halifax site that they are offering to pay half the stamp duty for home purchases between £125,000 to £250,000 for first time buyers and people moving home. As stamp duty for this property price bracket stands at 1%, this offer could save you up to £2,500. You need to apply by 6 June 2012 and some types of mortgages are excluded, e.g. Head Start Home Saver.
Although this offer may sound tempting, you could save more money by getting the lowest rate mortage deal. Say you could find a three year mortgage deal from another bank or building society that had an interest rate 1% lower than the Halifax, on a £200,000 mortgage. That deal would mean you’d pay £2,000 a year less in interest. Therefore on a 3 year mortgage deal, you’d save £6,000 on interest payments, more than double maximum saving of £2,500 on the Halifax pay half the stamp duty offer.
It’s very complicated trying to work out which mortgage is best for you; should you go for a long term fixed rate, a tracker or a discounted rate? But you need to compare all aspects of a mortgage package, not just an attention grabbing special offer.
The My Money Podcast no 18 looks at answers to the question “When Do I Retire?” with reference to the articles below.
Retire Early – This is more likely if you’re a member of a final salary pension scheme or have investment income.
Plan Retirement – I explain how it’s virtually impossible to plan when you’ll be able to retire if you are relying on a stock market based private pension.
National Employment Savings Trust – Most workers will be auto-enrolled in this new workplace pension scheme aimed at topping up the State Pension.
When to Retire – I’m not sure that people will be able to afford to give up work entirely when they reach the State Pension age if they don’t have an additional source of income.
During a recent Money Crashers Twitter Chat on vacations @eMortgageChat mentioned their round up debit card as an effortless way to save your change; everytime you pay for something with your debit card, the amount paid is rounded up to the next pound and the difference between your transaction value and the round up is transferred into your savings account. For example if you paid £32.47 at the supermarket, the transaction would be recorded at £33 with 53 pence going straight into your savings account.
I had vaguely heard of this round up debit card option but wasn’t sure which UK banks offered it. The only two I could find were the Lloyds TSB Save the Change and Bank of Scotland Save the Change (both banks are part of the Lloyds banking group).
I’ve been thinking about the role of independent financial advisers (IFAs) in the UK. From January 2013 they will have to charge a fee versus relying on commission from financial products that they recommend to clients. I think this is a good move toward transparency.
Would any independent financial advisers be willing to put their money where their mouth is and offer their clients some sort of performance related guarantees for stock market related investments? For example a (partial) refund of fees if the investment doesn’t reach a certain level over an agreed period of time. There could also be a bonus payment to the IFA if the investment they recommended did better than projected. That sort of fee structure would encourage me to use an IFA.
I’d like to see is IFAs taking some more financial responsiblity for their advice. At present, it seems to me that the investor is the one risking their cash when buying shares and other types of stock market investments, yet IFAs get their fees whether their client’s investment loses or gains value.
Do you dream of escaping work and retirng early? The definition of retirement seems to be changing, at least in some personal finance blogs, with the authors’ retirement goals being to work 2 or 3 days a week. To me, that’s working part-time, not being retired. To me, being retired means not doing any paid work.
Is it really possible to retire (give up work altogether) early with the decent income on which to live?
The first part of working out how to be successful is to define what success means to you. I don’t think it’s just about making money, being rich and having lots of possessions; although that seems to be a large part of success to many people. It could also be getting recognition and respect from other people whose opinion you value, setting up your own business, or having a good relationship with your spouse/partner. You could end up putting all your time and energy into work, earning and saving money for the future and have little, or no, opportunity to enjoy your personal life by doing things with your family and/or pursuing your own hobbies and interests. It’s back to the old chesnut of can you have it all?
Adam Piplica of Magical Penny, one of the panelists at the Write on Finance Blog Up in Leeds 22-23 September 2012, talks about his site and his views on personal finance and investment.
Introduce yourself and aims for your blog/site
I’m Adam Piplica, a 25 year old writer from Leeds. My aim with Magical Penny is to educate and encourage young people in their 20s to start investing and growing their pennies to take advantage of the magic of compound interest over time.
Why did you set up your blog/site?
I set up Magical Penny in 2010 after discovering that none of my friends had any idea on saving money for their long term future. Whilst at university a few years before I had begun reading about how ordinary people with average incomes had built vast fortunes by investing in the markets and I couldn’t wait to get started. I didn’t have any money at the time but it didn’t stop me reading and reading and reading.
The My Money Podcast #17 is a follow up on my recent article asking should over 50s resign to free up jobs for the younger generation. Now, let’s say some people aged 50+ would like to get out at 50 and give up paid work (that would include me, aged 53); I can’t see many of us doing so unless we were guaranteed some level of income/pension. Although I have a stakeholder pension which I can access once I’m 55, I don’t envisage it giving me a pension of more than a couple of thousand pounds a year between low annuity rates and the fact that I’ll probably be drawing that pension for around 35 years, if I reach average life expectancy. My state pension’s not due to kick in until I’m 66. So I reckon it’s nose to the grindstone for the next few years for me.
In early April 2012 my husband began the transfer of his Cash ISA pot from a Halifax 12 month bonus account, which expired on 15 April 2012, into a Birmingham Midshires (BM) 2 Year Fixed Rate Cash ISA, which was paying 4.05%.
On the 23 April he received a letter from BM, dated 19 April, saying that they sent the Cash ISA transfer form to the Halifax on 11 April but had not received the funds or any response from the Halifax.
My husband logged into Halifax, to see that they had closed his Cash ISA on 16 April. He then phoned BM to check if the money from the Halifax had arrived, but still no show. The BM employee said that Cash ISA transfers are often done by cheque. That’s bad news if you have to factor in Royal Mail delivery, then add another 3 days for a cheque to clear.
You can take part in the Secure Trust Bank’s Debt Awareness Survey to find out if you are a Savvy Saver, a Spirited Spender, a Brainy Budget or a Jammy Juggler. It only takes a few minutes to answer the 10 questions. I came out as as an 89% Savvy Saver, quite fitting for a canny Scot.
