I’m Angered by the Reduction in the Financial Services Compensation Scheme Limit

Written by Karen Bryan

£10 and £20 notes 240I was angry to read about the reduction in Financial Services Compensation Scheme (FSCS) limit from £85,000 to £75,000 from 1 January 2016.

It’s yet another instance of the goal posts being changed, messing up your financial planning.

The change to the FSCS is due to the strengthening of the UK pound against the Euro, as the limit is set at 100,000 Euro by the EU. I expected the limit to increase by at least the rate of inflation in the latest five-year review.

You might think that the lowering of the protection limit will only affect the wealthy. However, some people have been using tax-free savings accounts as an alternative to, or in tandem with a pension, to save for their retirement.

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£120 Switching Incentive from HSBC

Written by Karen Bryan

hsbcIf you’d like to earn some extra cash, take a look at the HSBC £120 switching incentive.

If you open an HSBC Advance current account by 31 August 2015 and then use the HSBC switching service to transfer an existing current account within two months of opening the HSBC Advance account, you’ll receive a £120 cash bonus.

You’ll need a good credit rating to be accepted for an HSBC Advance account. This account requires a sizeable minimum monthly pay in of £1,750. This is the largest I’ve seen.

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Life v Mortgage: Can You Afford Both?

Written by Karen Bryan

£20 and £10 notes diagonal 240You probably know at least one person or couple who seems to work constantly. They appear to work every day, perhaps in two or three locations, sometimes accompanied by Facebook statuses that tell their friends about their busy life. Do you envy their work ethic, or pity them for their situation?

I heard of someone who works at a gym in the morning, security at football matches or events in the afternoon, and the doors at nightclubs in the evening. He has a busy summer at Glastonbury and other events, but always in a working capacity. He probably has 10 days a year where he doesn’t work, which don’t usually include his birthday or the busy (and well-paid) Christmas period.

The reason for this punishment is a mortgage that is too large, which results in a house he’’s rarely in to enjoy. He’s by no means alone, because although mortgage interest rates are at a fresh low of 2.87% the average interest rate for a new buyer is usually higher, and perhaps as much as 5-6%. That’s a difference, on a £125,000 home with a £20,000 deposit over 25 years, of £186 a month – or more than £2,200 a year.

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Are Free Solar Panels a Good Deal?

Written by Karen Bryan

We decided to investigate getting free solar panels for our home. My husband responded to an advert in the local paper for free solar panels.

With the free solar panels deal, the householder gets the panels fitted, insured and maintained free of charge. The householder can then use any electricity generated by the solar panels free of charge. Any excess electricity generated by the solar panels is fed into the national grid. The free solar panel provider is paid for this excess electricity through the ‘Feed in Tariff’ (FIT). Solar panels cost an average of £5,000 to buy and install, with an average predicted lifespan of 25 years. With free solar panels, the typical contract is for 20 years.

solar panels on roof

I’d read that the average saving in electricity bills from free solar panels was around £120 per year. As we may sell our home soon, my husband wondered if getting some free electricity might be attractive to prospective buyers.

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Medical Centres of Excellence Should Offer Excellent Transport Options

Written by Karen Bryan

newcastle metroIf you live in Berwick upon Tweed, you may have to travel to Wansbeck Hospital, near Morpeth, for some types of medical treatment. It’s a 104 mile return journey.

This journey is not easy by public transport. From our house in the Tweedmouth area of Berwick, you’d either need to walk or get the bus to Berwick upon Tweed railway station, then take the train to Newcastle. Now, although the train would pass through Morpeth, the service never stops there. This means that you have to go further south into Newcastle, then take the Metro and a bus to reach Wansbeck Hospital. The fastest possible journey time is around 2 hours 30 minutes. With several connections, there’s plenty of potential for delay if there’s a problem on any leg of the journey.

Can you imagine undertaking that journey if your health is poor?

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Halifax Accounts for Kids

Written by Karen Bryan

Halifax logoThere are three Halifax accounts for kids.

The Halifax Kids’ Regular Saver offers a very alluring fixed rate of 6% for a 12 month term. But, the maximum monthly deposit is £100. The account is available to kids aged 0 – 15 years of age, but it must be opened by an adult aged 18+. Although the rate of 6% paid on the Halifax Kids’ Regular Saver sounds high, you have to take into account that the average balance over the year is only £600, if you make the maximum monthly payment of £100. So the interest earned is 6% of £600, not 6% of £1,200.

The Halifax Young Saver, available for kids aged 0 – 15 years, pays a variable rate of 3% on balances up to £20,000. With the higher balances, you’d need to be aware that if a child is given money from a parent which earns more than £100 in annual interest,  all interest will be taxed as if it were received by the parent. This is to discourage parents from putting their savings into a child’s name to avoid paying tax on the interest. However, if the money comes from the child’s earnings, e.g. a paper round, gifts from grandparents, aunts or uncles, all the interest earned will be tax free.

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To Save or to Pay Off Debt? Answering This Thorny Question

Written by Karen Bryan

Numbers And FinanceOn payday, do you struggle to decide between paying down consumer debt, mortgage and student loans and socking as much cash as possible into a high interest savings account? You’re not alone.

Millions of people across the UK are in this same confusing situation, and most are completely unsure about the best choice for their future. Unless you are a financial expert, the conflicting advice from family, friends and pseudo authoritative sources online can all seem baffling and overwhelming, but at the end of the month all can agree that both strategies have their positives and negatives.

Here are some important things to consider when deciding where to allocate your money.

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25 Easy Ways to Save Money

Written by Karen Bryan

Here are the tips on 25 easy ways to save money. Follow most of them and you could potentially save thousands of pounds per year.

 

pink piggy bank

  1. Draw up a realistic budget. You need to know exactly how much money is coming in and your current spending.
  2. Stick to your budget. I don’t necessarily mean by accounting for every penny, just checking that total spending for the month falls within the monthly budget. Don’t be tempted to overspend, as it’s easy to get into debt.
  3. Get a cashback credit card. The Santander 123 Credit Card pays 3% cashback on petrol/diesel and Transport for London and national rail travel purchases (up to a £300 spend per month), 2% on department store purchases and 1% on supermarket shopping. There is an annual fee of £24, but this is refunded for the first year if you hold a Santander 123 Current Account. If you spend £300 a month on a mix of fuel and transport, you could cover the annual fee within three months.
  4. Think before you buy. Do you need this product or service, will you use it and/or will it add value to your life. Then search for the lowest possible price.
  5. If you opt for a 0% on balance transfers or new purchases credit card, make sure that you set aside money every month to pay off the full balance before the end of the promotional period. Put this cash into a high interest account.
  6. Use cashback sites for shopping for products and services. I use TopCashBack.co.uk but do take heed of my tips for using cashback sites. As examples, I’ve earned £42 for opening a Co-operative Bank Current Account and £47.50 for successfully applying for a Post Office 0% Balance Transfer Credit Card.
  7. Turn down your thermostat by one or two degrees and wear thicker clothes.
  8. Check out sites such as Approved Food and Food Bargains for low prices on food which is near or past its Best Before date.
  9. Put your savings into tax-free Cash ISA accounts instead of standard savings accounts. With the annual allowance now at £15,240, you can build up a sizeable tax-free pot over the years. As some current accounts pay a much higher rate of interest than Cash ISAs, you could keep your cash in one of these current accounts until the end of March, only putting the money into a Cash ISA before the end of the tax year on 5 April.
  10. Keep your old mobile for longer and buy a SIM card when your contract expires. Giffgaff have some good deals; a £12 goodybag gives you 500 UK minutes, unlimited texts and 3GB of data. Click here to order your free giffgaff SIM card and get an extra £5 credit when you activate and top-up your sim card.
  11. Open a current account which gives you some free perks, e.g. the Halifax Reward Current Account regularly offers a £125 switching incentive and £5 a month bonus if you pay into it at least £750 a month and pay out two direct debits a month.
  12. Keep a note of when bonuses on your savings accounts end. A couple of  weeks before the bonus expiry, search for the best interest rates so that you’re ready to move your money.
  13. Use price comparison sites to find the best deal for car and home insurance, mortgages, broadband, mobile phones and household fuel. However, do take into account factors such as the amount of the excess and level of cover.
  14. If you’re happy with your current supplier, contact them to ask them for a better deal before you switch. Direct Line matched the home insurance quote I got from Churchill, but the Direct Line cover was better, as it included free annual travel insurance.
  15. Change your driving style. Don’t accelerate too much, use the gears to drop speed as you approach a junction instead of braking hard and stick to speed limits.
  16. Keep your current car as long as possible. We decided to trade-in our 9-year-old Skoda Fabia when it needed some expensive work done on the brakes. At that time, Skoda were running a Zero VAT offer, reducing the price of a replacement.
  17. Don’t buy higher price trendy brand name items. I have a Samsung laptop, netbook and mobile phone. They may not have the cool image of Apple products, but they do the job well and cost a lot less.
  18. Check if there are any valid voucher codes when shopping, e.g. I got another 5% off the price of my camera with a voucher.
  19. Keep a £100 buffer in your current account, to avoid accidentally going overdrawn.
  20. Build up an emergency fund, so that you don’t have to borrow money or max out your credit card if you need to repair or replace something.
  21. Use loyalty cards when you’re shopping. Although the returns can be pretty low, e.g. the Tesco Clubcard gives you 1 point for every £1 spent in the store, it’s still something back on spending that you’d do anyway.
  22. Cut your own hair; this could save you hundreds of pounds a year at the hairdresser.
  23. Before you dial any numbers that start with numbers like 0844, 0845, 0870, see if you can find an alternative cheaper geographical number to dial on the SayNoto0870.com site.
  24. Don’t fall into the spend money to save money trap. It may seem like a no-brainer to snap up a bargain, but you’d save more money by not making the purchase.
  25. Try to focus on things that will save you the most money. For example, setting aside a few hours to find the best mortgage rate, which could save you thousands of pounds, versus spending time running around three different supermarkets to save a few pennies.

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Santander 123 Mini Accounts for Kids

Written by Karen Bryan

santanderletterheadThere are two Santander 123 Mini accounts aimed at kids. The Santander 123 Mini Current Account offers young people the opportunity to manage their own cash, plus spending with a cash or debit card. It doubles as a savings account, as it pays a variable rate of 3% on balances between £300 – £2,000.

For kids under the age of 11, the  Santander 123 Mini Account (In Trust) allows parents who hold a Santander current account, to earn a variable rate of 3% on balances between £300 – £2,000 set aside for their child. The parent must retain control of the account until the child is 11. Then the parent can visit a branch to transfer the account into a Santander 123 Mini Current Account, where the child will have control of the money.

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My Money Podcast #117

Written by Karen Bryan

The My Money Podcast #117 summarises the recent Help Me To Save articles listed below.

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  • Why I’m Put Off Giving to Charity – I’m irked that most of the money I’ve given to charity seems to have been spent on letters sent to me asking for further donations.
  • Nationwide Loyalty Two Year Fixed Rate Bond – This product is another example of disloyalty pays. The Nationwide Two Year Fixed rate account pays a rate of 2%. Whereas, the open-to-all Chartered Savings Bank Two Year Fixed Rate Bond pays a higher rate of 2.16%.
  • Should You Pay More for a Centrally Located Hotel? – Although I’m always on the lookout for the lowest prices for hotels, I believe that it can be worth spending more on a centrally located hotel, than staying a in a cheap hotel miles from the city centre.
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