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There can be a fair old battle on the head versus heart front when you are making decisions. Who can say what’s the best formula to try to ensure that you come to the ‘right’ decision the majority of the time.
It’d be foolish to disregard a thorough and logical evaluation of the options when making a decision But how much attention should you pay to your emotions/instincts? Is it wise to overrule your heart and act purely on rationality?
Over the last few months I’ve been looking at the options for cashing in my stakeholder pension. The first opportunity to do this will arise next April when I’ll be 55. Although I’ve spoken to an independent financial adviser and done a lot of research, I’m still no further forward.
At first I was attracted to the option of taking the 25% tax free lump sum at 55 and leaving the remaining 75% invested in the hope that annuity rates would rise in the future. However that option isn’t available with a stakeholder pension. I’d have to change to a Self Invested Personal Pension (SIPP) to go down that route. Even if I put the remaining SIPP pot into a cash deposit account, to lock in any gains, I’d get a lower rate of interest than on a standard savings account and have to pay an annual charge.
In the UK, there is the option to delay taking your state pension, officially called State Pension Deferral, in order to receive either a larger pension or a lump sum payment. You can defer your State Pension regardless of whether you continue working or not.
As an example, if you agree to start drawing your State Pension one year after your are eligible to receive it, you will receive a 10.4% increase in your State Pension payable from one year later. While that sounds like a pretty good deal, if you are still working or have other income on which to live for that year, you have to factor in the loss of the State Pension for one year.
The basic State Pension is currently just over £110/week, totalling £5,720 a year. Therefore a 10.4% boost to that sum, would give you an additional £595 a year in income. However it would take almost ten years to make up for not receiving your State Pension for that one year. Assuming a retirement age of 65, you are likely (on average) to live for more than another ten years. If you live past the age of 75 then you are a winner, as you’ll receive that higher pension for the rest of your life.
I spent some time looking online for buildings insurance quotations for our son’s flat in Glasgow. I didn’t go for the cheapest price, but what I thought was the most comprehensive cover. I initially thought I’d found a good price which included accidental damage, home emergency and legal cover, with an excess of £100, for £255.
When I phoned the broker to go through the quote, they told me that there was a £250 excess for escape of water. I hadn’t come across this before. The cusomer service rep told me that this excess was standard in quite a few home insurance policies. I wasn’t happy with this £250 excess and I thought it should have been more clearly displayed in the quotation.
I’ve been doing a lot of research into personal pension charges, so I decided to look at charges on the National Employment Savings Trust (NEST). There’s an 0.3% annual management charge (AMC). I was surprised to learn that there’s also an 1.8% contribution charge (CC). That means for every £100 paid into your NEST pension pot, £1.80 is deducted in charges. At least the contribution charge is only made once when money is put in, whereas an AMC is levied every year on the whole of your pension savings.
The NEST contribution charge is supposed to be a temporary charge until the costs of setting up NEST are recouped. But there’s no firm time commitment given. Some commentators think that the contribution charge could be in force for as long as 20 years.
When I asked NEST on Twitter about their charges, they told me that the AMC and CC combined work out to be the equivalent of an 0.5% AMC. They seem to prefer the 1.8% CC to be low profile.
I was expecting NEST to have lower charges due to economies of scale and the fact that they are a not-for-profit organisation. To put it into context, I have a stakeholder pension with Standard Life which currently has an annual management charge of 0.8%. Now stakeholder pension providers can charge up to 1.5% in the first ten years that you’re with them, and up to 1% after that. As far as I can ascertain, the NEST AMC remains constant at 0.3% and who knows for how long the contribution charge will be made.
I wasn’t overly impressed by the Barclaycard Freedom Rewards Card. I thought the rewards were pretty meagre. However, as I knew I had some large bills looming, I decided to apply for a Barclaycard Freedom Rewards Card, in order to get the £30 worth of shopping vouchers on offer to new customers who spent at least £500 in the first five months. Of course, I’d have preferred a cash incentive vs shopping vouchers, but I saw that Debenhams were on the voucher list and I do shop there sometimes.
I’d already reached the maximum £100 annual cashback limit on my 3% cashback Aqua Reward Credit Card, therefore the maximum cashback I could earn on a £500 spend would be £5. This made the £30 vouchers look pretty attractive, for the few minutes it would take to complete the Freedom Rewards Card application form.
I always pay my credit card bills off in full every month; if you are to pay any interest on an outstanding balance, this offer isn’t worthwhile, as the interest you’ll pay on £500 will be more than £30.
The additional Reward points appeared in my online Barclaycard account a couple of weeks after I spent the £500.
You have to create an account in Barclaycard Freedom Rewards to redeem the points. I received my Debenhams vouchers, which appear to only be for use in-store, approximately ten days after requesting them.
The Poppadom Express Indian Buffet in Woburn Place near Euston Station, offers quality food at the very reasonable price of £7.95 for lunch (including a soft drink, glass of wine of half pint of lager) and £12.95 for dinner.
I had dinner at this restaurant on a Thursday evening in March 2013 with one of our sons. I really liked the fact that the tables were well spaced out, so you could move without banging elbows with the people at the next table. The buffet selection was quite limited but enough for some variety. I particulary enjoyed the Prawn Curry, the Fresh Fruit Salad (with pineapple and melon) and the Carrot Cake.
With the seemingly unstoppable downward drift of interest rates paid on traditional UK savings accounts, many savers are looking for alternative homes for their cash to ensure that their savings get a real return, e.g peer-to-peer lending or share trading. Another option is buying a commodity such as gold. I always thought of buying gold as something for the very wealthy. However, it’s now much easier and cheaper for indivduals to buy and sell gold. Of course, it’s still risky as you don’t know how the price will fluctuate.
If you buy gold from Bullionvault the charges seem quite reasonable. There’s a maximum charge of 0.5% to buy or sell gold. However, there is a difference in the sell (offer) and buy (bid) price. Insurance and storage of your gold has an annual charge of 0.2%, with a monthly minimum fee of $4.
If you use a lot of data on your mobile phone, then the giffgaff £12 a month Phone Plan gives you unlimited data (for personal use), plus 250 UK minutes, unlimited texts and free giffgaff-t0–giffgaff calls and texts. However, tethering (using your phone as a modem to connect other devices) isn’t allowed. If you want to use your phone for tethering, this is allowed on the £10 a month giffgaff Phone Plan, but this plan has a 1GB a month data limit.
If you order a giffgaff SIM card, for use with any of their monthly plans or on Pay As You Go, by clicking on the banner above, you will receive £5 extra credit when you top up with a minimum of £10.
I looked at using the giffgaff £10 a month Phone Plan when my Vodafone contract ran out. I was paying just over £13 a month for 300 UK minutes, unlimited texts and 500MB on an 18 month Vodafone contract, which included a free HTC Wildfire. Giffgaff runs on the O2 network, but my Samsung Wave is unlocked. One of our sons is on giffgaff, so I’d be able to phone him without using any of my inclusive minutes.
Unless you are in a well paid job, childcare costs can eat up a high proportion of your take home pay. So what are the best ways to combine making money and looking after kids? An obvious option is to work from your home but that’s not always viable.
When our twin sons were young, I found that being a freelance market researcher fitted in well. I mainly needed to work evenings and weekends. That meant that I often went out to work as soon as my husband got home. It wasn’t ideal, but it meant that our sons were usually with one of their parents and we didn’t have to shell out for childcare. Being a freelancer also meant that I could take time off during school holidays and medical appointments. The downside was irregular pay and no company pension scheme or sick pay.
Working Mums is a great resource if you’re looking for employment. You can do a job search by sector, location, job type and full or part time work. They also have a franchise section. I did look into a cleaning franchise at one point, but I thought that the franchise fee plus the ongoing fees were pretty steep for something that I could set up myself.
I’ve been searching for the best deal on a hotel for our trip to Santander in northern Spain next month. I found a 15% discount code for ebookers – HOTELUK15, which saved me almost £57 on the price of the hotel. I don’t know for how long the code will be valid, but it’s a great offer.
I always prefer to pay the lowest possible price, rather than depend on cashback which is never 100% guaranteed. However there are two very good cashback deals on other hotel booking sites for the next few days:
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There can be a fair old battle on the head versus heart front when you are making decisions. Who can say what’s the best formula to try to ensure that you come to the ‘right’ decision the majority of the time.
