Don’t forget you can treat yourself too – take advantage of all the Mother’s Day bargains with our selection of the best deals on the web.

• Best value flowers
• Bargain bubbly
• Spa treats for less
• Cheap city breaks

Get the best value flowers…

Rather than browsing the wilted offerings at your local garage forecourt, your best bet is to go for a snazzy bouquet that can be delivered straight to your mum’s door.

Free chocs and free delivery

Bunches.co.uk sells fantastic looking flowers from just £9.99 – plus you get free delivery and free chocolates with every order!

We also love John Lewis because you don’t have to pay a penny for standard delivery of flowers and plants. Prices start at £18.50 and there is a great selection to choose from.  Start browsing here. If you really want to impress then order the stunning Super Heaven Scent for £40, or for something a little bit cheaper but just as pretty go for the 18 Mixed Tulips for £19.50.

• Next has a great variety of flowers (from £20) and several of their bouquets come with a free vase. This bouquet here costs £28 but is full of roses, spray carnations, lisianthus and eucalyptus. Plus you get a box of chocolates. Alternatively, take a look at this bouquet for a classic and stylish arrangement of cream roses at £33.
• Flowers Direct also has a comprehensive selection (from £24.99), and offers free chocolates and same day delivery (great if you’re a last minute shopper).
• Marks & Spencer has some gorgeous bouquets from £19.50. Again some come with free chocolates or vases. We like this Tulip gift bag for £25 and this Shades of Pink arrangement with five malibu roses, five anastasia white blooms, five hot pink spray roses and five ruscus. It costs £39.50 but comes with a free bottle of cava and it’s an online exclusive. It can be ordered up until 7 April and if you place the order before 5pm you’ll get next day delivery. But be warned, if you want them delivered on Mothers Day you’ll be charged an extra £3.
• ASDA will give you £2 off any flower order when you enter the voucher code namemum at the checkout. This offer is  until Thursday 19 March.
• Arenaflowers.com offer a lovely range of Mother’s Day flowers, most of which you can “Make Deluxe” if you want to splash out that little bit extra. They even cater for mum’s who live overseas, offering an International Flower and Gifts delivery service.

…or trees!

If she’s a bit green-fingered, why not surprise your mum by giving her a tree for Mother’s Day? They last for years and really add to a garden or room.

• Anything from lemon to olive trees are available through Tree2mydoor (from £24.50), which tends to have the most reasonable prices.

• Should your mum have no garden (or little space indoors), you could go for a Bonsai gift kit (£12.95). She’ll be able to grow her own mini-trees needing nothing more than a spare windowsill or shelf.

Luxury chocs for less

You can’t really go wrong with chocolate and there are lots of places to find gift wrapped goodies at great prices.

• Thorntons sells everything from continental chocolates (£12) to champagne truffles (£15). They also offer a great range of flowers accompanied with chocolates if you just can’t make up your mind what to go for.
• Why not nab some great value gift-wrapped Belgian chocs from M&S for just £8?
• For something a little bit special take a look at the Mother’s Day Champagne & Chocolates hamper from the Chocolate Trading Company. At £49.95 it’s a little bit pricey, but enter the code Winter8 when ordering online and get 8% off!
• Hotel Chocolat offers Mother’s Day chocolate gifts from £6, together with some luxurious chocolate sets (from around £15) that mark a new high point in chocolatey self-indulgence – surely a good thing!
• If your mum loves her choc the treasure box from Cadbury Gifts Direct is bound to put a smile on her face – it costs £20 and is crammed full of all the Cadbury’s classics such as Milk Tray, Roses, Dairy Milk, Crunchie bars and much, much more.

Find some bargain bubbly

Champagne always goes down a treat, especially if your mum’s partial to a tipple.

• One of the best value bottles of champagne on the market is Waitrose’s Bredon Brut NV champagne (£19.94).  If you want to splash out a bit more, you can send a bottle of champers with your own personalised label and message (from £29.95 at Barrels and Bottles).
• Should you be feeling particularly flush, you can get a bottle of Moet & Chandon Brut Imperial, NV, Swarovski Gold Edition (75cl) for £44.99. The bottle has been beautifully decoarted with Gold Swarovski and can be purchased from Gifts International.
• Don’t forget there are plenty of excellent alternatives to champagne, which taste great yet cost a fraction of the price. For example, Cava Calamino NV (£7.49 from Majestic) is great value bubbly, while a bottle of Montana Sparkling Brut Cuvée NV is a classy yet affordable alternative to champagne (£6.64 from Waitrose).

Spoil her with a spa

Give your mum some top-notch pampering with a spa break.

• Red Letter Days sells good value spa treatments from £49 as well as various other activities, such as flotation tank experiences and other pampering treats.

• Marriott Hotels offers a pamper day treat from £49, and will allow your mum to bring along a friend to use the facilities (such as the swimming pool and spa) free of charge.

• Lastminute.com is currently offering a brilliant 2 for 1 Dove Spa deal for just £95. The offer includes four treatments for your mum and the person she chooses to take with her (which will hopefully be you!).

Lift her up, up and away

Your mum might have her feet firmly stuck on the ground, but why not change that for a day?

• A hot air balloon experience can be had from as little as £85 if you book online – try the British School of Ballooning website or Balloon Flights UK.

• If you book through Red Letter Days, you’ll even get to help inflate the balloon itself! Take your mum up to 3,000 feet, giving her a tranquil birds-eye view over the British countryside. You can fly from locations all over the UK – and your mum gets to toast her maiden flight with a glass of champagne when she lands!

Treat her to a Royal day out

Booking a day-out at Buckingham Palace makes a great treat for mothers who love a bit of pomp and pageantry. Have a snoop round the palace, taking in the Queen’s gallery, Royal stables and magnificent state rooms (which boast works by the likes of Rembrandt, Rubens and Canaletto). The palace is open between 26 July and 28 September (tickets are £16.50 per person and must be booked in advance).

Uncover affordable art

Indulge your mum’s artistic streak. Artyprints has a huge catalogue of prints and posters for you to browse online, and is currently knocking 15% off the price of all orders. They sell everything from abstracts to photography, covering artists from Whistler to Warhol – so you’re bound to find something that’s to your mum’s taste. Prices range from £5 – £500.

Take a break

Why not whisk your mum away from it all?

• Lastminute.com has some great easter city breaks which would make a lovely Mother’s Day present. Why not take in the sights of Paris for just £122, or soak up the history of Rome for a mere £182.
• Or stay closer to home for very little cost. Take advantage of Travelodge’s Easter sale and book a room for just £19 (stays must take place between 3 April – 4 May, subject to availability).

Get best-value from beauty products

If your mum is into make-up, forget the high street. Make-up and perfume is almost always cheaper online.

• At Debenhams save 10% on brands ranging from Yves Saint Laurent to Estee Lauder.
• Benefit Cosmetics is offering free delivery on all orders £50 or over.
• Or head to John Lewis, which offers everything from bronzers and blushers to a host of other pampering delights for around the £20 mark.
• Wantthelook.com boasts an impressive range of hair and beauty products to suit all ages. They are currently giving away a gorgeous heart shaped locket when you purchase any two Paul Mitchell products.

Don’t forget you can earn cashback on your shopping through sites such as Quidco – take a look at the merchants who offer cashback through Quidco here.

Go Green….

Treat your mum to some eco friendly presents from Nigel’s Eco Store. Choose from a huge selection of gifts including a Babyliss Eco Hair Dryer for £19.99, soothing Rosa Passionata Night Butter for £16.99, or a heavenly Domestic Goddess Aromatherapy candle for £12.95.

Feed her inner film buff

Whether your mum is into chick flicks or world cinema, there are loads of good value movies available online.

• You can get Mamma Mia! from just £4.96 at Play.com – and if your mum swoons at the mere mention of Colin Firth, why not pick up the entire BBC series of Pride and Prejudice from Amazon, for the bargain price of £4.99!

• Alternatively, you could get your mum a cinema pass, which would allow her to watch an unlimited number of films for a fixed fee (Cineworld offer a deal from £13.50 a month).

• Or why not buy her a subscription to a service like LoveFilm and your mum can rent out DVDs from a massive selection online. The films get posted to her to watch in the comfort of her own home. When she’s done with them, she sends them back by prepaid post, and gets sent the next films she’s requested. Simple! LoveFilm rentals start from £3.99 per month and rise to £18.99 per month for unlimited rentals.

Show off her digital photos for a snip

Instead of leaving photos hidden away on a computer, display your mum’s memories where everyone can see them – on a digital photo frame. Asda is selling Kodak’s P720 digital photo frame for a knock-down £27, a 40% reduction on its original price.

Donate to charity

You could celebrate Mother’s Day by helping mothers who are in need. Aid organisation Maternity Worldwide helps save the lives of women in the developing world, whose health is put at risk by poor maternity care. For a £15 donation, Maternity Worldwide will send a personalised ‘Safe Birth’ certificate to your mum – and you both get the satisfaction of knowing that your gift will make a real difference to the lives of other mothers.

Get your mum a personal assistant…

Is your mum the busiest person you know? Whether she’s snowed under with work or domestic chores, why not hire a personal assistant to help her out? It can be for as little time or for as long as you want. The PA Division will sort out her to-do list (anything from doing her filing to washing her car), leaving your mum free to relax and spend her time doing the things she wants to do. You can expect to pay around £25 per hour, contact the company here for a quote.

…or do it yourself!

Your mum waited on you hand, foot and finger for more years than you care to count – so why not return the favour? You could begin by making her breakfast in bed, then allow her to put her feet up while you do all the cooking, cleaning, washing up and shopping. Top it off by preparing a meal or taking her out for dinner. If you’re eating out, you could try:

• Lastminute’s half price deals at restaurants across the country.
• The ‘Mum’s Eat for Free’ Mother’s Day deal at HaHa Café Bars – meaning you get two meals for the price of one. The deal only applies to the HaHa ‘Favourites’ section of the menu. See the full menu here and find your nearest HaHa here.
• Taking her somewhere really nice for just a tenner – see the full selection of restaurants that are part of this promotion here.
• Use Toptable to book your meal and earn points to save a heap of money at top restaurants all over the UK.

Or if you decide to eat in why not treat her (and yourself!) to a Marks and Spencer food feast. M&S also currently have 25% off their French wine selection, which should wash that grub down a treat!

Make her day by doing that, and you will officially be the world’s best son or daughter!

Related posts:

1. Great Gift Ideas: How to choose a present for every occasion Finding the perfect present often leaves you tearing your hair...
2. Mother & Bump – get your top on In the last year I’ve gone from paying off debts,...
3. Mother & Child I am no longer a woman with a bump! On...

• Financial support
• Free leisure
• Free health
• Mother’s Day Treats

Financial support

There is plenty of financial support that mums (and dads) can get from the Government to help towards the costs of having a family, supporting children while you go back into education and putting children through their own education. There are benefits for those who are out of work, those who can’t work and those on a low income. Read on to find out what you and your children are entitled to.

Governmental Support for Parents

Child tax credit – tax credits are payments from the government. You will usually be able to claim child tax credits for a new baby, any child that lives with you who is under the age of 16 – or 20 if they are in full time education or approved training. If you are a lone parent but share joint custody of the child, only one household will be able to claim. If you cannot decide which household will claim, then the Tax Office will do this for you.

Sure Start Maternity Grant – this £500 grant is to help parents on a low income pay for things for a new baby and does not have to be paid back. You must be receiving certain other benefits to claim the grant and there are conditions concerning the child’s age when you claim. For more information and to download a form click here.

Health in Pregnancy Grant - if you are a mum-to-be and at least 25 weeks pregnant, you may be able to get a one-off tax-free grant of £190 to help towards the costs of your new baby. You can get a claim form from your doctor or midwife.

Child Benefit - this is a tax-free payment from the Government that you can claim to help you pay for the upkeep of your child. It is usually paid every four weeks but can be paid weekly. You can claim if you have a child under 16 or a child over 16 but still in approved education or training. For your eldest or only child you will get £20 a week, then £13.20 for every other child.

Child Trust Fund - this new scheme will help you get your child’s savings started. If your child was born on or after September 1st 2002, is not subject to any immigration restrictions and qualifies for Child Benefit, then you will receive a voucher for £250 around a month after you start to receive your Child Benefit. If your household receives Child Tax Credit and you have a household income of £16,040 or less a year, then your child will receive an extra £250.

Once your child reaches 7, they will get an additional £250 (£500 for low income households) and a total of £1,200 can be paid into your child’s account every year.

Employment support

Jobseeker’s allowance – if you are currently unemployed or work less than 16 hours a week, but are looking for a full time or part time job then you may be eligible to claim Jobseeker’s Allowance to help with the costs of living. How much you can claim depends on your circumstances.

Employment and Support Allowance – if you have a disability or health condition that prevents you from working, you may be able to get Employment and Support Allowance which replaced Incapacity Benefit and Income Support in 2008.

You will have to fill out a questionnaire about your illness or disability and how it affects your everyday life and you may also have to take part in a medical examination. You may be able to work while still claiming ESA but there are certain rules to this.

Income support – this is for people who don’t claim Jobseeker’s Allowance or Employment and Support Allowance and have a low income. To be eligible to claim you must work less than 16 hours a week and have less than £16,000 in savings. There are some exceptions but to claim you will not be in full time study.

If you live with a partner and they are in similar circumstances, only one of you will be able to claim Income Support, but there are extra amounts that you can claim based on yours and your partner’s circumstances. You will need to contact your local JobCentre Plus to find out more.

If you are a lone parent, you can claim Income Support until your youngest child reaches the age of 10. From 25th October 2010, this age will fall to 7. Before your Income Support payments are due to stop, you will have to attend an interview at JobCentre Plus where you will be advised on other benefits you may be able to claim if you have not found work, or a job that you work at for more than 16 hours.

In Work credit – this is a tax-free payment of £40 per week (£60 if you’re living in London) made to lone parents who have been claiming certain benefits for a year or more and go back to work for at least 16 hours a week. In work credit is paid for a year in addition to other working benefits like Income Support and ESA. There are certain conditions to claiming In Work Credit:

• You must claim before you start work and you must fill out and return the form to the JobCentre within five weeks of starting work
• You must your new job to last for more than five weeks and you must work at least 16 hours a week
• You must have at least one child living with you who is aged 16 or under

For more information, visit the JobCentre website.

Job Grant – if you are aged 25 or over, have started full time work (16 hours or over) and were claiming Income Support, Jobseeker’s Allowance, Incapacity Benefit or Severe Disablement Allowance for 26 weeks prior to starting work, then you may be able to claim a tax-free lump sum Job Grant. For lone parents and couples with children the grant is £250.

Childcare and School Support -

Pre-school Childcare costs – all 3 and 4 year olds are entitled to 12 and a half hours of free early education for 38 weeks of the year. This can take place in nurseries, playgroups, pre-schools or at a childminder. From September 2010 this will increase to 15 hours a week. To find out when your child will become eligible for their free place click here.

Free school lunches for children - as a parent, you do not have to pay for your child’s school lunch if you claim any of the following:

• Income Support
• Jobseeker’s Allowance (income-based)
• Employment and Support Allowance (income-related)
• Support under part VI of the Immigration and Asylum Act 1999
• The Guarantee element of State Pension Credit
• Child Tax Credit, providing you are not entitled to Working Tax Credit and have an annual income (as assessed by HM Revenue & Customs) that does not exceed £16,040
• Working Tax Credit during the four-week period immediately after your employment finishes or after you start to work less than 16 hours per week

Your Local Authority is responsible for providing free school lunches. You can apply here.

Help with school uniforms – families on low income or benefits may be entitled to clothing grants or vouchers from their Local Authority to help with the costs of school uniforms. To apply, enter your postcode to find your LA here.

Free school transport - if you are a working mum, it can be difficult to get your children to school. The good news is, your child is automatically entitled to free school transport from your Local Authority, if;

• they are between 5 and 16 years old
• they attend the nearest suitable school but it is further than the statutory walking distance – that is, 2 miles for pupils under 8 and 3 miles for those aged 8 and over.

Find out more and apply for home to school travel support by entering your postcode here.

Support for Parents in Education -

Care to Learn – if you are under 20 and still in education or planning to go back into education, the Care to Learn scheme can pay up to £160 per child per week (£175 in London) for childcare and associated travel costs. For more information, visit the Direct Gov website here.

Other childcare help – if you’re over 20, there is still help you can get if you’re still in education and need help with childcare. Depending on your household income, the Sixth Form College Childcare Scheme will pay £160 per child per week towards childcare costs (up to £175 in London). You must be aged 20 on the day you start your course and you can be studying full or part time and be the main carer of a child under 15 years of age.

The Free Childcare for Training and Learning for Work Scheme is aimed at low-income,  two-parent families, where one parent is working and the other wants to go back into education or training. The scheme will help pay for your childcare – up to £175 per child per week or £215 if you live in London.

You must be 20 or over, be unemployed or working less than 16 hours a week, have one or more children aged 14 or under (18 if disabled), have a partner who is working and a household income of £20,000 or less a year.

Education Maintenance Allowance – if you are between 16 and 18, you could get weekly payment of £10, £20 or £30 depending on your household income, which is paid to help with the costs of studying after school age.

If you don’t qualify for any of the above schemes, you may still be able to get help through your sixth form or college.

Support for Working Parents -

Parental Leave – working parents are entitled to take up to 13 weeks leave for each child until they reach their fifth birthday. This leave is most likely to be unpaid, but if you need some time to spend with your family or some time to make arrangements for your children’s welfare, then you are able to take leave from work and have a job to come back to!

You must have been employed with the same company for a year or more and have a contract with that company, you must be named as the child’s parent on their birth or adoption certificate or have legal responsibility for the child if they are under five (18 if disabled).

Flexible Working - if you have a child under six or a disabled child under 18, you are allowed to ask your employer for a more flexible working pattern to help you care for your child. You must have worked for your employer for at least 26 weeks, be the child’s mother, father, adoptive or foster parent, legal guardian or the partner of one of these and have responsibility for the child’s upbringing. You can download an application form for flexible working here.

Free leisure

Mums go free at Ballyearl - if you’re local to Ballyearl Arts & Leisure Centre in Newtownabbey, you can take advantage of a free squash lesson or gym session (plus a cup of tea!) when you bring your kids along for £3 each. You’ll need to book in advance to avoid disappointment. Download the application form here and visit the centre’s website here.

Free mum and baby fit classes – mums who live in Rushcliffe, Nottingham can benefit from FREE weekly mum and baby fit classes at Cotgrave Leisure Centre. Classes take place on Thursdays from 9.45 – 10.30am and are suitable for mums with babies under a year old.

Free swims for pregnant women – if you live in Bristol, you can purchase an Everyone Active Discount Card for just £3.50 and benefit from free swims at six different leisure centres in the area. You’ll need to fill out an application form ad take it to your nearest Everyone Active centre with proof of residency and your National Health Service Card to prove your eligibility. Those who do not live in Bristol can purchase a Discount Card for £30.

Free health

If you are pregnant or have had a baby within in the past 12 months, you are entitled to free prescriptions and free dental care. You must complete an FW8 application form to get a Maternity Exemption Certificate – you can get one from your GP, midwife or health visitor. The certificate will be valid for 12 months.

Mother’s Day Treats

Lastminute.com have loads of Mother’s Day offers, treats and discounts, including 2for1 on Bannatyne Relaxation Days, 50% off mother and daughter photoshoots now just £19.50 and Hairspray tickets from £22.50.

Marks & Spencer has 50% off all fine jewellery at the moment, as well as buy one get one half price on selected fragrances. H Samuel has plenty of offers on Mother’s Day gifts, like half price pendants and earrings and buy one get  one half price on Willow Tree ornaments.

Tesco.com and Interflora are offering Mother’s Day bouquets from £19.99, while Moonpig.com has cute little bouquets from just £15 and can deliver via courier on Mother’s Day providing you order before 2pm on Saturday 13th.

Thorntons has some great offers on flowers with chocolates from just £28 and some bargain chocolate boxes like this heart shaped plaque with truffles for £5.99, which can be iced with a message!

Useful Links

• Mumsnet
• Netmums.com
• Direct.Gov
• Marks & Spencers
• Lastminute.com
• Tesco
• Thorntons

Related posts:

1. Disability Benefits: Get What’s Rightfully Yours Whether you care for someone with a disability or whether...
2. Benefits for the over 60s We were recently asked this question: “My husband recently turned...
3. Benefits for the Over 60s Freebies and discounts! Financial benefits Savings accounts for over...

• The state of the mortgage market today (March 2010)
• What is remortgaging?
• Three steps to finding the best mortgage deal
• Do’s and don’ts

How things currently stand (March 2010)

There are several reasons why homeowners are being urged to take advantage of the market and remortgage:

• There has recently been a surge of new mortgage deals from lenders (both tracker and fixed) that have cheaper rates than were previously available.
• At the same time, lenders have recently increased their Standard Variable Rates (SVRs). (This is the default mortgage rate you get landed with when your current deal comes to an end.)  And it looks like mortgage providers are going to raise their SVRs further still.
• This means that for many people, remortgaging works out cheaper than leaving your mortgage to automatically go onto your lender’s SVR.

So where does this leave me?

• If you’re paying an SVR of 3.5% or more – or you will be in the near future when your current mortgage deal runs out – you should at least consider remortaging (providing you have at least 20% equity in your property).
• We recommend talking to brokers London and Country to advise you on your personal circumstances. We like them because they are completely independent and cover the whole market – so you can be sure you are receiving impartial and unbiased advice. They will also provide free advice and won’t charge you for getting quotes either!
• If you have less equity in your property – say around 10% – you need to be extra careful in your research. A fixed rate mortgage could be more suitable for you (depending on your circumstances). Again, London and Country can advise you on this.
• The key point is that the majority of SVR rates can’t compete with the current fixed-rate deals – so don’t pay a higher rate if you can avoid it!
• If going for a fixed-rate deal, it’s probably best to go for a five year fix at the current rates. Two or three year fixes are a cheaper option (at least to begin with) but they don’t protect you from interest rate rises over the long term.
• However, there are still some reasonable tracker deals around with interest rates remaining at rock bottom – and looking likely to stay that way for a while yet.

Act now

• The general long-term fall in house prices has meant that your loan-to-value has been getting worse. So act now if you need to remortgage in order to grab the best rate available.
• Three steps to finding the best mortgage deal.
• Talk to independent brokers London and Country for a free quote.
• Download our FREE comprehensive Mortgage Guide

So do it now before you lose out. Get in touch with London and Country who will search the whole of the market and bring you the best deals. If you find a good one, agree to it asap – you can always change your mind later on if a better one turns up (although if you’ve paid an arrangement fee to the first one you may lose that if you switch, so factor that in).

Also, we’ve put together a quick and fun guide to getting a mortgage to give you an idea of what you should be doing now in order to get the best price possible and minimise your ‘mortgage shock’. Download it now and send it to your friends – it’s completely free!

What is remortgaging?

There are two types of remortgaging.  The first is simply transferring your mortgage from one company to another or moving it to a different type of mortgage with your current lender.  This is what you need to do when you come to the end of a fixed deal. (If you don’t you will be put on your lender’s SVR which is likely to be an expensive rate.) When you remortgage for this reason, the balance of your mortgage remains the same. You are just transferring to a deal with different rates of interest.

The second type of remortgaging is when you need to borrow more money, so you take out a larger mortgage in order to pay off other debts or perhaps buy a car. We advise against this wherever possible.

This article deals with the first type of remortgaging: those who are coming to the end of their fixed term period (where interest rates remain at the same rate for the first two years or more) and are facing higher interest rates unless they change mortgage.

Three simple steps to get the best deal

We’ve put together three simple steps to help you get the best deal for you:

• Start looking now

If you’re coming towards the end of your fixed-term period, start looking straight away. You can arrange a remortgage up to six months before the end of your fixed term period – and because the good deals are snapped up so quickly at the moment, arranging it early is the best thing to do. If you find a better deal later on it’s fairly easy to cancel one that you’ve signed up to before the money has been transferred over.  So if you do find a good deal, grab it quick smart – you can always get out of it later on.

• Get a broker

The second thing that you should do is get yourself a decent mortgage broker.  A good mortgage broker will look at the whole of the market for you (not just a few companies that they are tied to) and be able to get you the best deals that are on offer.  Moneymagpie has teamed up with London & Country – one of the best independent brokers in the UK – you can speak to them for free about your mortgage needs.

If your broker does find you a great offer, you should also consider having a chat with your current provider to see if they can match the offer.  They won’t always be able to – but if they do, you can avoid the (sometimes excessive) exit fees that are involved with changing your mortgage provider. You may get cheaper arrangement fees.

• Start budgeting

As soon as you start looking, you should start to budget for your new mortgage.  Your new deal may be more expensive than your current payments, so you should start budgeting increased mortgage payments into your monthly expenditure. However, as interest rates are still currently at rock bottom due to the economic crisis, you may get a better deal than you have currently. In which case we suggest you continue paying the same amount as you did before (or even more if you can afford it) so that you can pay off your mortgage quicker and save yourself a TON of money in wasted interest payments!

How much will it cost?

The costs that you will have to fork out for straight away are the arrangement fees for the new mortgage and the exit penalities on your current mortgage.  These vary greatly across different banks and different mortgages, but can be between about £100-£3,000.  More recently, arrangement fees have become a tool to manipulate comparison tables.  By offering a lower rate of interest but high arrangement fees a mortgage provider can get up high on comparison tables. They then make the money back by hiking up arrangement fees.

This can work to your advantage: if your mortgage is over £200,000 you’ll probably save money by paying a higher arrangement fee and then lower interest. However under £200,000 it’s probably better to go for a slightly higher interest rate to save on arrangement fees.  For more information on cost see our article on mortgage set up costs.

What if I can’t get something I can afford?

If you are facing real problems: either no one will offer you a new mortgage or the ones you are being offered are simply too expensive, then you have two choices. Either you will have to be resourceful and try to make more money out of your house in order to be able to afford it, or, if this is not possible, you should get help and advice to stave off repossession.

Ways to make money from your home

• You can try renting your driveway or a room in your house (the latter is tax-free income up to £4,225 a year).  Renting to a foreign student can be the best of both worlds because you get to make money from them but they tend not to stay long so you don’t have to put up with the same person for months and years.
• Alternatively, if things look really tough, you could move out of your house entirely for a year and rent the whole place out.  You would either have to find an accommodating friend or pay rent to live somewhere smaller and cheaper, but you could end up making enough money off the rental income to cover the cost of both your new residence and your mortgage.

If things are looking really bad…

If you really can’t afford it, you may have to sell your home, leaving you free to rent for a while whilst the market gets back on its feet.  This is not ideal but it is better than having the place taken off you. In this situation, do what you can to make the property look as attractive as possible and put it on the market at an attractive price. That way you will be able to get a quicker sale and deal with your mortgage problem earlier rather than later.

If the situation is even worse than that then go DIRECTLY to one of the charitable advice agencies below – particularly the Citizens Advice Bureau and Shelter.

Do’s and Don’ts

Don’t be tempted to use a sale and rent back company to sort this all out for you.  We have not found any of these deals to be good for the homeowner. They will often hugely undervalue your home and then, after a year or so, they could hike up your rent to make you leave.

Do get help quickly. If you are facing real debt problems and fear you may be repossessed, remember there are free services there to help you. Get in contact now with the CCCS (Consumer Credit Counselling Service), the Citizens Advice Bureau or National Debtline. Also the charity Shelter has a lot of experience in dealing with housing problems and is very helpful.

Useful links

• London & Country Mortgage Brokers
• CCCS
• National Debtline
• Citizens Advice Bureau
• FREE Moneymagpie Guide

Related posts:

1. Remortgaging to pay off your debts Anyone struggling financially will know what a desperate situation debt...
2. Offset Mortgages: the mortgage you can pay off quickly and cheaply Having an offset mortgage can help you pay off your...
3. What type of mortgage – part II Second decision: what payment rate will you go for? We...

You have to quit smoking.

It’s National No Smoking Day on 10 March and if you need to save some cash (don’t we all) then what better time to kick the habit?

We know it’s not an easy thing to do – yes, some of the Moneymagpies are smokers too. You have to choose for yourself whether or not you want to, or think you can, quit. We’re going to give you a nudge in the right direction though because there are absolutely loads of incentives to give up.

Why should you quit?

• For your wallet – you could save as much as £2,870 a year.
• Because it’s free! – there’s glowing praise for the NHS stop smoking service, and it’s completely free so make the most of it.
• For your health – within 24 hours of quitting all the carbon monoxide will be gone from your body, and your lungs will begin to repair themselves.
• For your social life – you’ll have more confidence and much more free time when you don’t waste it smoking!
• If you need more inspiration, read Nigel’s story.

Your health

It’s an obvious one, but just think of all the things that will improve if you quit…

• Your skin will look healthier and younger after just a few months. As a non-smoker you will also get fewer wrinkles as time goes on.
• You’ll be able to go for a run without coughing and spluttering all over the place, and having to stop every 100 meters. Did anyone say FIT, as well as healthy?
• You will look a whole lot more attractive when your body repairs itself. Gone will be the yellow stained teeth and the lifeless, brittle hair – not to mention the smell.

If that isn’t enough, check out these stats from the NHS:

• Within 48 hours your body has completely rid itself of nicotine.
• Within two weeks your circulation will improve.
• After three months your lung function will have increased by as much as 10%, meaning any coughs and breathing problems will improve dramatically.
• After 10 years, your risk of lung cancer falls to half that of a smoker and your risk of heart attack falls to the same as someone who has never smoked.

Your wallet – save thousands

If the many health benefits of a smoke-free life aren’t enough to entice you to quit, the increase in the weight of your wallet could well be.

What the money you save can buy you

A packet of 20 cigarettes costs about £6.13 at the moment. Working on that basis, (we’ve rounded up to the nearest pound) have a look below to see just how much money you could be saving and what you could spend it on.

Giving up five cigarettes a day saves:

• £11 a week – 2 for 1 cinema trip with Orange wednesdays (plus change for popcorn!)
• £46 a month – Official England football shirt – World Cup 2010 kit
• £558 a year – 7 night all inclusive 4 star holiday to Cyprus in April or May
• £5,585 a decade – Good condition used BMW 3 series

Cutting out 10 cigarettes a day saves:

• £21 a week – Luxury cosmetics from Benefit, like  ‘That Gal’ brightening face primer or ‘Dr Feelgood’ velvety complextion balm.
• £92 a month -  22 bottles of wine/35 pints of beer
• £1121 a year – An Apple MacBook Pro 13 inch MB991 with free delivery and free Microsoft Office.
• £11,206 a decade - Completely redecorate your home

Giving up 20 cigarettes a day saves:

• £43 a week – 2 course meal and ticket to Wicked courtesy of Lastminute (with £3 change for ice cream in the interval!)
• £184 a month – Two return tickets to Paris on the Eurostar and £46 spending money
• £2,237 a year – Brand new Canon EOS 7D Digital SLR camera with zoom lens, lithium battery, 16GB memory card, tripod and carry case – plus £391.85 left to buy another lens!
• £22,374 a decade – Deposit for your first home!

Insurance

Apart from the obvious financial benefits of not having to buy cigarettes, giving up can also save you a small fortune on your insurance premiums.

Smoking makes you more of a risk as far as insurers are concerned since you are more likely to claim. As well as reducing the number of life insurance options open to you, it can increase your premiums by as much as 78% according to our friends at Beatthatquote.com.

Using their example, the average premium for a healthy 35 year old man who has £100,000 cover for 20 years is £8.85 per month. If this man was classed as a smoker though, the premiums would rise to £15.75 – that’s an extra £1,656 over the term of the policy!

Remember that smoking might also increase your home and car insurance premiums as well.

However, it’s good to know that most insurance companies will officially reinstate you with non-smoker status, 12 months after you quit.

We’ve shown you it’s worth it, so make sure that you get a new life insurance deal once you can be classified as a non-smoker. Check out the best on offer with our comparison service.

Hidden costs

A study into the costs of smoking by the NHS has shown that smokers can spend as much as £676 a year before they’ve even bought their cigarettes.

This goes on costs like maintaining the same personal hygiene as a non-smoker – this can set you back nearly £200 per year, while the cleaning, repairing and replacing of clothes comes to £213.

Your social life

Giving up can do wonders for your social life, not least because you’ll have loads more time.

According to the NHS, the average time spent smoking a cigarette is about 10 minutes. This means a ten-a-day smoker could save almost two hours a day, and a whole month over the course of a year, by giving up. Imagine what you could do with all that free time…

Being able to quit should give you a huge confidence boost – if you manage to give up you can be immensely proud of your achievement. Hopefully you’ll have more self-esteem to go out and do all the things you’ve always wanted to.

Also, if you’re looking for that special someone, you’re more likely to get a date after you quit. According to NHS research, non-smokers have a better chance of being attractive to the opposite sex than smokers.

You can also stop feeling guilty about putting your friends and family in danger because of passive smoking – and in turn they’ll be so grateful to you.

Quitting is free!

The first few weeks of quitting are the hardest, so you need determination and will power. You’ll also need some help and the NHS can provide it.

Your first stop should be the NHS Free Smoking Helpline: 0800 022 4332 – open seven days a week from 7am until 11pm.

The NHS smokefree website is also well worth a look. There are words of encouragment as well as loads of free resources and information.

Also, check out the No Smoking Day website for some really useful tips to help you quit.

You can choose to go to free sessions and discuss things with others. But if you’d prefer to go it alone, support is available at home with the ‘Together Programme’ – find out what’s best for you here.

Nigel’s story

Moneymagpie spoke to 45 year-old Nigel Manton who gave up smoking two years ago. Nigel had been smoking from the age of 13. He smoked on average twenty a day, but sometimes as many as forty.

Nigel said that a combination of factors convinced him to quit: He began to wake up feeling very wheezy, his partner was a non-smoker and wasn’t keen on his habit and he really wanted to do a trek in Nepal and realised that if he continued to smoke he just wasn’t going to be able to.

Nigel said that he really needed reasons to want to quit – he thinks if you plan to give up you’re much more likely to succeed than if you make an impulse decision.

He also points out that there are no prizes for giving up the hard way, and having help from the NHS makes it so much easier than trying to use will power alone.

Nigel used the NHS helpline (above) and was put in contact with a local council support group – details of these can be found on the NHS smokefree website.

He told us that it was not unlike an AA meeting, and that the support was invaluable. Nigel received help planning his course of action. He explained that the members had help choosing the right kind of nicotine replacement aids – the NHS say that using these double your chances of being able to quit successfully.

If you attend all the meetings – Nigel had one a week for six weeks – then you receive a form entitling you to the nicotine replacement aids for free. So you really can give up for nothing!

Nigel told us that his main incentive to persevere was the carbon monoxide test that each member had to blow into, in front of everyone else at the start of each meeting. It was the thought of doing this that kept him going to begin with.

It took Nigel six weeks to quit – he said that after that his cravings were completely gone and all his friends kept telling him how much healthier he looked.

He told us that quitting was easier than he thought it would be, and advises those who are trying to kick the habit to make the most of the services the NHS provide – you might as well make it as easy for yourself as you can.

Useful Links

• Quitting with NHS
• No Smoking Day Site

Related posts:

1. Big Brother smokers It’s happening again. The Big Brother nightmare. All women this...
2. Smoke-free savings Smoking is now illegal in pubs, nightclubs, restaurants and...
3. No smoke – more fire For some people, the UK ban on smoking in public...

Once you get down to it, though, you realise that there are three decisions you need to make.

1. Repayment or interest-only?

• Repayment mortgages are the most popular. Part of your monthly payment covers the interest on the loan and the rest eats away at the capital (the actual amount you’ve borrowed). It means that at the end of 25 years (or whatever the length of the loan) you will actually own your home outright.
• Interest-only mortgages are slightly cheaper than repayment ones as your monthly payments only pay the interest on the loan. This means that at the end of the term (length of the loan) you will still owe the amount you originally borrowed. This means that most people set up a separate payment each month into an investment vehicle that will grow as the mortgage continues.

It’s very important to remember that if you plan to take out an interest-only mortgage, you really do need investments to back it up. Without them you are very vulnerable because – as we know all to well – property prices can drop, which could leave you in negative equity (where the value of your house is less than the value of your mortgage).

2. Which payment rate?

Fixed Rate

With a fixed rate mortgage, your interest rate will stay the same for the term of your loan – no matter what. Regardless of what happens to the economy, the Bank of England base rate, or whether you have a repayment or interest-only mortgage, the amount you pay each month won’t change with a fixed rate.

Essentially this type of mortgage offers you stability and peace of mind. There is also the potential for you to save money if the base rate increases during the term of your loan.

On the other hand, you could end up spending more than you need to if the base rate goes down while you have the loan. The other problem is that fixed rate mortgages are likely to charge you for making early repayments or leaving before the end of the term.  

This type of mortgage is good for…

First time buyers who are vulnerable to rising interest rates because they are on a tight budget. However those in unpredictable financial situations, for instance couples who are about to start a family, might also appreciate the stability a fixed rate mortgage offers. There’s alot to be said for always knowing how much you’re going to have to pay.  

Find out more about fixed rate mortgages here.

Capped

These mortgages have a variable interest rate but there’s a fixed upper limit which can give you the best of both worlds. The cap lasts for a fixed period (usually two or three years) within which, again, you are tied to the lender and charged high fees if you try to leave. It is useful if you think mortgage rates might fall but you don’t want to pay more if they rise.

This type of mortgage is good for…

Variable or Standard Variable Rate (SVR)

This is the standard mortgage rate that lenders usually offer. It could go up or down, depending on what the base rate does and how much money the mortgage company feels like making.

These tend to be flexible which means you won’t be charged for making early repayments or opting out early. The disadvantage is that they are generally a lot more expensive than other deals.

This type of mortgage is good for…

Discount

These offer a discount on the lender’s usual variable rate for a fixed period. They can be cheaper than the normal rate but they still could go up, even though at a lower rate, if the lender’s variable rate goes up in that time.

This type of mortgage is good for…

Tracker

This mortgage sets an interest rate that is usually just above the Bank of England’s base rate and goes up and down exactly as the base rate does. So if it’s set at, say, 0.75% above base rate and base is 5% then your mortgage will be 5.75%. The obvious plus (and minus) point with this is that while the base rate’s low you’ll have a cheap deal, but when it’s high your interest will be too.

This type of mortgage is good for…

Offset

These are still a fairly new and relatively unknown concept in mortgages. Offset mortgages bundle up your current account, savings account and your mortgage into one product. This means that any credit in your current or savings accounts is ‘offset’ against your mortgage.

So although you pay the same amount into your mortgage each month, more of that money goes to paying off the capital of your debt (the actual debt itself) rather than being wasted on paying interest.

This is because the company only charges you interest on the amount of the mortgage that’s left after your savings are taken into account. So say you have a £100,000 mortgage but you have £20,000 altogether in your savings account and current account, you will only be charged interest on £80,000.

So, in theory at least, it’s cheaper and you get to pay the mortgage off quicker. It’s also very flexible so you can overpay when you like and borrow back money that you’ve paid off.

Flexible

More and more mortgages include some flexibility now – i.e you can overpay or underpay or even have payment holidays without being penalised. 

This type of mortgage is good for…

These can be useful if you’re self-employed or expecting some life changes in the near future.

Bear in mind that the types of mortgage we’ve mentioned above are not mutually exclusive – you can for instance have a flexible discount tracker mortgage.

3. Extras or a different style of mortgage?

Endowment mortgage

• This is one way of paying off an interest-only mortgage. Very popular (with mortgage brokers) in the 1980s because it paid them a MASSIVE commission.
• The idea is that you get an interest-only mortgage and then you invest in something else that, you hope, will grow faster than the mortgage interest rate. Then at the end of the 25 years you can pay off the mortgage and have a bit left over. Not only that but the endowment gives you life assurance to cover your debt should you die before the end of the term.
• However, those 80s endowments did very badly because they overestimated how much the stock market would go up and, worse, they tended to have high charges paid to the brokers and the insurance companies that provided the policies. Generally a pretty bad product.

Use your pension or an ISA

These are also ways of paying off an interest-only mortgage. Either you can take out an ISA (Individual Savings Account) which will grow (you hope) enough to pay off the final mortgage debt.

Or, you can link part of your pension (up to 25% of the lump sum) into your mortgage so that it can be used to pay off the amount you borrowed at the end. You can only get at the money when you reach 50 but it’s quite a good investment because you get the amount you would have paid in tax added in.

Mind you, given that most people have pensions that are far too small, it’s probably best to avoid this type of mortgage.

Sub-prime:

If you have a dodgy credit history or you are self-employed and normal lenders won’t give you any money, you can still go to one of the mortgage companies who will lend – at a price – to people that no one else will touch.

The big disadvantage of these is that they tend to be much more expensive than normal mortgages. However, at least you can get the money and, possibly, switch to a cheaper deal a year or so down the line if you keep your nose clean and pay your mortgage on time every month.

Beware, though. Although there were lots of companies who used to give out these mortgages like sweets, there are hardly any now and it’s really difficult to get them. If you have bad credit and you want to remortgage, be prepared to pay a very high interest rate for the privilege!

Guaranteed:

Could mum and dad guarantee a larger-sized mortgage than you could afford on your own? Or could you do it for them? This mortgage is for people who can’t afford a large enough mortgage (on paper) because they don’t earn enough, or they are older than the mortgage company likes.

With this one, you pay the mortgage but a relative will guarantee it for you. If you can’t pay somewhere down the line, the mortgage company will come after your relative for the money.

• Again, these mortgages are much less common now as banks cut down on the more unusual mortgage deals.

Self-cert:

• Also called ‘liar mortgages’ these are fast becoming an extinct species as banks get really twitchy about lending to anyone who doesn’t have a solid income and a huge deposit.
• If you’re self-employed and your accountant saves you tax by making your income look small this can stop you getting a decent-sized mortgage. With self-certification (self-cert) mortgages you say what your real income is and the mortgage company lends on the basis of your say-so.
• Most of the time they don’t ask for proof of your earnings, which is also helpful if it’s just a plain hassle to get your accounts together. Again, though, the rates for these loans tend to be higher than the norm because they are riskier.
• Also, it’s far too tempting for some people to go for a massive mortgage, just because they can. Then they get into trouble when they can’t actually pay it each month. This is another reason why there are far, far fewer of these around than before.

Cashback:

• Mortgage companies were so desperate to get your custom that they were offering all sorts of incentives including a percentage of your mortgage back as a cash lump sum (usually about 3-5%). Very few are doing it now but they could come back later.
• This can be worthwhile but there’s always a downside, usually a higher interest rate overall and a tie-in deal that keeps you with the mortgage for a long time with heavy penalties for pulling out.
• You really need to do the figures for these mortgages and work out if this deal really is cheaper in the long run or if there are too many hidden charges.

Shar’ia mortgages:

• These are primarily for Islamic borrowers but anyone can take them out. In fact, they are becoming more popular as some non-Muslims believe they are more ethical than others.
• The way it works is that the bank buys the property for you, then you buy it off the bank by leasing it from them over a period of time with a really big ‘rent’. It’s a bit like hire purchase for houses!

25-year fixed mortgages:

• Where you fix your interest rate for the full 25 years. This is really only for people who really like to know exactly how much they will be paying for their mortgage every year and think that interest rates will go up over time.
• The Government is keen on these (and they’ve been popular in the US for some years) as they make the property market less volatile. However, there are only a few on the British market and most have penalties if you pay them off early.
• This can make them less worthwhile as we think you should definitely pay off your mortgage early if you can. If you find one that doesn’t have penalties, though, it could be worth considering.

Download our FREE mortgage guide for loads more help and information

Related posts:

1. What type of mortgage – part II Second decision: what payment rate will you go for? We...
2. What type of mortgage – part III Third decision: do you need extra products to back up...
3. Offset Mortgages: the mortgage you can pay off quickly and cheaply Having an offset mortgage can help you pay off your...

Related posts:

1. Men v Women – who are the best? The battle of the sexes has been more in the...

Recipe: Mushroom (Dr. Vera’s) Soup with soured cabbage

Ingredients:

300g mushrooms

1 onion

1-2 potatoes or a bunch of parsley

2 tablespoons olive or coconut oil

1/2 of jar of soured cabbage

1/2 teaspoon salt

1 bay leaf

 Method:  Peel and chop onion, mushrooms and potatoes. Boil potatoes or parsley in 1. 5 litres water. Heat the oil in a frying pan and lightly fry onion for 2-3 minutes, then add mushrooms and fry for a further 2-3 minutes. Add the fried stuff to the boiled potatoes (or parsley) and when it boils again, add 4-5 full tablespoons soured cabbage. Add salt, bay leaf and cook for another minute. Serve, without sour cream or bread if you’re sticking to the whole gluten-free/dairy-free thing.

Related posts:

1. Fish and chips night My husband thinks he’s died and gone to heaven as...
2. Leftovers-stuffed chicken This is less a recipe and more a list of...
3. Curry week! 23rd-29th November As it’s national curry week, we can indulge in spicy,...

India, to state the stunningly obvious, is no China. Yes certainly in terms of square kilometres, population and many other dimensional statistics both are huge, but thereafter they are best identified by their differences rather than similarities. In our somewhat patronising Western view we tend to lump groups of nations together and most fashionably and recently have done so with two others – Brazil and Russia – to form the investment acronym and fad of the BRIC countries.

Brazil and Russia are primarily commodity based economies, although the former does have a burgeoning middle class. The latter, although having a developing middle class, has a population which is in fact shrinking quite drastically. Not only does it seem that the Russians have given up breeding but, unlike us, they seem to attract few immigrants apart from those brought in by the security services. Both nations react to global demand for raw materials and certainly when China breathes in, Brazil breathes out (exports) iron ore.

Both China and India have growing and developing populations and with them will inevitably come the increased demand for consumer goods and other popular disposables. Such demand will develop according to the growing wealth of those nations, but will also be helped by the development of their consumer credit and banking facilities.

A key difference between the two is of course their political systems – one the largest democracy in the world, and the other the largest communist oligarchy in the world. Certainly the central control mentality of the communist system probably lends itself to a more efficient method of developing such a huge nation, but the functional democracy of India is to be considerably admired given the ranging differences of the nation and some of its more unruly parts.

China has funded itself through trade surpluses whereas India has been running a deficit for many years, albeit at a very affordable level. Part of this has been down to its remarkable savings rate – which is something of a distant memory for us back in the UK. Such savings have helped fund the development with a rate reaching an astonishing 36% of GDP until somewhat falling back more recently. With a middle class of some 450m, this is a huge lake of wealth which, if properly harnessed, will help fund significant development into the future.

So for the Indians it has been ‘Crisis, what crisis?’ In addition, whereas the Chinese saw a dramatic rise in unemployment, although the figures are unreliable, such an impact in India seems to have been more muted.

It seems quite likely that growth levels in India could be sustained at a figure close to 10% and at that rate, the nation’s economy will overtake the UK economy within a decade and potentially Japan’s within two.

However, there are some worrying areas of concern that must be addressed. One that rarely seems to be highlighted has been the influence and spread of the Naxalite (Maoist) guerrillas who are apparently active in a third of India’s 626 districts. This low profile insurgency claimed some 998 lives last year but has barely been recognised outside the country. Unless this sort of running wound is addressed then this could affect potential development, especially given the social pressures that are inevitable with such a fast changing economy and society.

If effectively addressed however, then confidence in the government can be further enhanced: if, though, this is just left to fester, then external investors will be attracted to other more stable areas of Asia – such as its neighbouring fellow leviathan.

***

Well with all the prevailing news of economic gloom that we are being fed in the UK, one could be forgiven for finding that most of the population is thoroughly depressed. It was thus rather surprising to see last week’s consumer confidence figures being at the highest level since the beginning of 2008. This is despite the gloomy prognostications of all the politicians and certain journalists who love to focus on the darkest of threats even on the brightest of days.

However, there is another area where I think we short change ourselves and that is that we tend to regard our investments purely in nominal terms and not taking account of other issues. These could include inflation, but also, and more importantly for those of us in ‘Blighty’, the impact of our yo-yoing currency that can have a very considerable impact.

For those investors who are US$ based, they will still be suffering especially where they have overseas investments. As the US$ has recovered, so the value of those investments has diminished and of course this includes any of their dividends being repatriated. In US$ terms in fact, world equities are still 25% below their 2007 high.

For the Japanese the situation is even worse. Unlike the majority of American investors who still seem somewhat bemused by the term ‘overseas’, the Japanese have had to invest overseas ever since their markets crashed back from their zenith at fractionally under 40,000 in the Nikkei 225 in 1990, to a nadir of around 7,000. For effectively twenty years their markets have gone nowhere. Their answer was of course to invest overseas but with a stronger Yen they have now found themselves in a position of being still 44% below the peaks of the Summer of 2007.

In the UK we have always expected to have invested either directly or indirectly around the globe – obviously an old empire thing. Even in the FTSE100 we not only have a growing number of overseas companies but also large multinationals with the result that some 65% of profits from this membership are coming from overseas. So we have in fact been sheltered from the worst of the market storm and, if you add in the recovery in valuations since last March, the result has been that we have recovered all the losses since 2007. In fact the FTSE All-World equity index, on a total return basis including the reinvestment of dividends, is quite astonishingly at an all time high!

The pride before the fall when the Pound reached $2.10 was illusory and had, for those who were watching, obviously gone far too far. The fall back since then has in fact been a great boon for us as a relief pressure valve which of course those heavily indebted Eurozone members did not have. If we hadn’t had that chance to devalue, our investment and economic position could well have been very considerably worse.

***

And finally from the quirky state of California…………..

A couple who tried to save water and money by removing their lawn are being taken to court by the city of Orange. Quan and Angelina Ha, who now have a scheduled court date, decided to replace the grass on their front lawn with wood chips in 2008. The Ha’s said they’d just had a baby and began to think about her future and the effect of what is happening to their environment.

Thus they made a decision to replace their water thirsty grass with the far more environmentally friendly chippings. At a time when Southern California cities fine people for overwatering their thirsty lawns, the Ha’s said they’ve saved hundreds of thousands of gallons of water and drastically lowered their water bill.

But the city cited them for violating a law that requires ‘live landscaping’ to cover 40 percent of the yard. The couple planted drought-tolerant plants last year but the city said it wasn’t enough.

The city said it wants them to come up with a compliance plan. Ah yes, this is the land of the free!

Have a good week.

Justin A. Urquhart Stewart
Director
Seven Investment Management Limited

Related posts:

1. What a Silly Measure The FTSE 100 index is generally a rotten measure of...
2. All Things Must Change Can the City of London kindly stop moping around like...
3. An Air of Palpable Excitement I can’t remember seeing such group ecstasy for a long...

I’m 15 years old and I have a weekend job in the local tea shop where I live. I really enjoy working there as everybody is lovely but it’s also great experience to see all the different things you have to do to keep everything running in order – there are loads more things than I expected!

I don’t wish to ever work or run my own café in the future however, it’s good to know how hard I have to work just to get £10, this has given me a real sense of the value ot money and I now think twice before I buy something – do I really need it?

I’m not currently saving up for anything in particular but another great thing at the weekend about having a weekend job is that I can put the money I earn into a bank account and then in the near or distance future if I do see something I like I can buy it without having to worry about paying my parents back. I have been working at ‘Badgers’ for a year and half now and I have managed to accumulate quite a bit of money, which makes a purchase like buying an iPod seem much less drastic.

Working a whole Sunday does shorten my weekend considerably but I don’t usually find it that much of a problem, as I still have time to go out and have a break from school. However, with starting my GCSE courses last September, I do get more homework than I used to which does take up quite a bit of my free time but I haven’t had any real problems with work interfering with my school work – it just means that I have to work hard to fit everything in.

Related posts:

1. Say Goodbye to the Naughty Noughties – Welcome to the Lean (and probably Mean) Teens I suppose the end of a decade was never going...
2. Easy money for charity I gave over £100 to charity this weekend and it...

• What is a stakeholder pension?
• Will I get taxed?
• Are they risk free?
• Should I have one?
• Which one should I get?
• Children and stakeholder pensions

What is a stakeholder pension?

The first thing to understand is that a stakeholder pension is a private pension, not a state pension. Anyone can have one, although they were originally brought in to help mothers and people who weren’t able to work for whatever reason. Before stakeholders, you could only contribute to a pension if you were working. Stakeholder pensions, however, can be contributed to by anyone. If you’re not working, someone else can put money in for you.

It’s up to you how much money you put into it although if you’re not working you can only put in up to £2,880.00 a year. Happily, because it’s a pension, the government then puts in the tax you (or someone else) would have paid on that money (20%) so they make it up to £3,600.00 a year.

You’ve probably heard people grumbling about how rubbish the State Pension is (it only pays just under £5,000 a year for a single person). Well a stakeholder pension allows you to build up some extra money alongside any other pension provisions you might already have. So if you’re worried that your current pension plans won’t provide you with enough money later on in life, this could be part of your retirement pot (remember you don’t have to have a pension at all, but it’s a good idea to have some of your ‘retirement pot’ in pension products, if only for the tax break).

Unlike with a State Pension which you can only start to claim once you have reached retirement age, a stakeholder pension allows you access to your funds much earlier on. By April 2010 the minimum age you can claim money from your stakeholder pension will be 55, which is ten years earlier than when a man could currently claim his State Pension and five years earlier than women can, although that’s all changing too in April 2010!

Stakeholder pensions are available from most banks, building societies, insurance companies, investment companies and financial advisors, and any UK resident under the age of 75 can have one. Each plan has to meet the minimum standards laid down by the government, which is good as it means you won’t get ripped off.  These standards include;

• Limited charges- With a stakeholder pension you will only face one charge, which is known as the Annual Management Charge (AMC). This is basically the cost of having someone manage your account, and by law you cannot be charged more than 1.5% of the total amount of your pension fund. After ten years this drops to just 1%.
• Low minimum contributions- You can put in as little as £20 a go.
• Flexible contributions- You can put money in as and when you want.
• Penalty-free transfers- You can switch to a different stakeholder pension provider without being charged a penny.

Will I get taxed?

A great benefit of stakeholder pensions, as with any pension product, is that you get tax relief on the amount you pay into them. This means that if you’re a basic rate taxpayer then for all the money you put into your plan, the provider will claim a basic rate of 20% back from the government. Or in simple terms, for every £80 you pay in an extra £20 will be added.

If you’re paying a higher tax rate of 40% then you can still claim this amount back. The first 20% will be claimed back by your pension provider as though you were a basic rate taxpayer. You can claim the extra 20% when filling out your annual tax return, or by writing to or calling your Tax Office.

Currently you can put as much into your pension each year as you like up to the total of your annual salary, but there is cap on how much this can be. This cap is known as your “annual allowance” and for the 2010-11 tax year it equals £255,000. Altogether you can put up to £1.5 milion into your pension over your lifetime and get tax relief on it. Anything over that you won’t get the tax back.

If you want to put in more than your annual salary into your pension pot each year you won’t get any extra tax relief so think about putting that money into other products like stocks and shares Isas, for example.

To find out more about the tax advantages of having a personal pension, look here.

To find out more about the changes taking place regarding tax relief on pension contributions, click here.

Are stakeholder pensions risk free?

No serious investments are risk-free and you shouldn’t think of a stakeholder pension as being risk free. As your money is generally invested into stocks and shares, property, bonds etc, the value of your nest egg could go up or down in the short-term. However, in the long-term, it should (note…should) go up overall (even though some years it could go down and others it will go up).

There are various investments you can put your money into, some with greater risks (and often greater returns) than others, so you’ll need to decide how safe you want to play it and go for a plan that reflects this. On the whole, stakeholder pensions invest largely in index-tracking products which track the stock market day after day. The stock market goes up and down every day but over the last 100 years it has gone generally upwards. Assuming it continues in this way you can be sure that in the long-term your money will go up.

Should I have one?

Hmmm, the million dollar question and one which ultimately depends on how confident you are that your current pension provisions (e.g. your State Pension) will be enough to get by on in later years. Anyone can have a stakeholder pension (even if you’re not working) so it’s really up to you whether or not you think it’s necessary.

If you’re self-employed there are many benefits to having a stakeholder pension – they are tax efficient (as with any pension) and they are cheap and easy to set up. Once you have one you don’t have to do much most than keep an eye on how it is doing once a year. This also applies if you’re not working but you have someone who could pay towards a pension for you.

Even if you’re employed it’s not all plane sailing. Some companies don’t offer a work related pension scheme, or perhaps they do but you’re not that keen on it. If this is the case then a stakeholder pension could again be the way to go, mainly because it’s easy to set up and doesn’t cost much to run (unlike most other private pensions).

It’s also worth noting that if you are employed your employer MUST provide you with access to a stakeholders pension scheme. The only exceptions are if they have fewer than five employees or are already offering an occupational scheme. Whilst this is useful for employees it is nowhere near as good as a traditional company pension because the employer is not likely to contribute to the pot.

Still not sure whether to get one? Then take a look at the Financial Services Authority’s (FSA) stakeholder pension Decision Tree.You just answer a few simple online questions and they’ll point you in the right direction based on your response. Easy!

Which one should I get?

Choosing a stakeholder pension is a bit like choosing a pair of shoes, or a lipstick. It’s very personal, and a plan which suits your friends and family might not suit you. Just make sure that you get it clear in your mind how much you’ll be charged each year (an AMC fee) and the fund options available should you at anytime want to increase or decrease the risk of your investment.

There are a few offers around right now in the stakeholder arena. Scottish Widows is currently offering 20% off their annual stakeholder fund charges when you apply online, whilst Aviva boasts an impressive number of funds ranging from low to high risk. Virgin also offers a solid looking deal, as does the Abbey National.

There are loads more to choose from so a good first port of call would be the FSA pension comparison table. You just answer a few simple questions and then you’ll be shown a table with the various pensions on offer.

Children and stakeholder pensions

As anyone can have a stakeholder pension, whether they are earning or not, this means that even babies can have one! In fact, since they were introduced in 2000, a number of families have set up stakeholder pensions for a new baby with members of the family contributing each year (up to £2880.00).

Stakeholder pensions are a really good way of setting up your child for later on in their lives. In fact, if you paid the maximum amount into their stakeholder for the first 15 years of your child’s life you would probably sort out their pension needs for them because of the many years that money will have to grow. You probably won’t get much thanks for your effort as they can’t access the money until they’re 55, but the older they get the more they will realise the value of your contribution.

Most stakeholder pension plans accommodate children, and the maximum amount that can be paid into a child’s plan is £3,600 per year (really £2,880.00 and the government puts in the rest).

For more information on investing for children, click here.

For more information on stakeholder pensions visit Directgov and their stakeholder pensions site.

Related posts:

1. National Insurance (NI) Ever noticed great sums of money disappearing from your...
2. Get what you’re entitled to when the state pension changes The pension rules are changing in April 2010. Believe it...
3. SIPPs – The cheapest way to build up a DIY pension Take control of your own retirement with a SIPP (Self...

Up with the lark, off to the newsagents and, with coffee and croissant (and dog), the supplement was taken out and poured over (usually it’s Business, Property, Style and Review in that order).

What a let down.

Yes there are 55 new names here and a few interesting movements in ranking, but I am distinctly under whelmed. Maybe it is a sign of 2009’s economic troubles but I didn’t really find much Innovation happening on the list. I did find some fun perks (hypnosis to lose weight anyone?) and some great investment in training and development – particularly of note is the peer coaching model at Fairbarin Private Bank and the financial investment made by Savile Group of £3000 per employee. Elsewhere, however, whilst sushi making may be a laugh, it does seem a bit gimmicky and over engineered.

I was also struck by how many consultancies there are in the top 100. Over 50 of the winners work in communications, HR or PR. Now I would not ever accuse them of using The Sunday Times for their own purposes, but there does seem to be an overcrowding of companies that don’t make anything and spend their time telling others how to make stuff or finding people who will do it for them (I know this is pot and kettle black stuff).

Employee Engagement is vital for Innovation – who is going to bother improving your offering if they don’t really want to be behind that till or answering that phone? And that is why this list is so important. It is a snap shot of engagement levels, and therefore potential to innovate, in the lifeblood of the UK economy – the SME.

At a CIPD conference last year I heard one HRD remark:

“I’ve spent a fortune on employee engagement programmes over the last few years. That’s all going to stop now. They are lucky to have a job”

This is exactly the kind of attitude that encourages presenteeism and celebrates an historic rate of low staff turnover. I would like to see her share price in 12 months time.

All that said, there are some great examples of Innovation in HR on this year’s list.

We love Peter Kelly, the founder of Best Place Winner, Softcat with his utopian dream of “just caring that people are happy”. The company is run like a democracy and people decide what team they want to work in.

Qedis has taken an Innovative approach to employee engagement and set up employee action groups. The use of language is interesting here – they call these groups “Families”. Lexicon also plays apart at Practicus Recruitment Consultancy where employee of the month is call a “player” and overall employee of the year is called “the player’s player”. Language can have such an influence on an organisation’s culture, I was glad to see this level of attention played to it.

Little mention was made of technology, but worthy of merit is Red Gate Software’s joint CEO Neil Davidson who is likened to Stephen Fry for his Twitter updates to staff. Also interesting is Bite Communications who encourages staff bogging and has live Twitter feeds on their website. Apart from that the IT revolution seems to have passed most HR Departments by.

Perhaps it is telling that Savile Group, who specialise in providing support to those who have recently been made redundant, are the least stressed employees in this year’s survey. I am sure they saw profits rise in 2009.

With signs that the UK economy is in recovery I look forward to some real Innovations on next year’s list. Let’s hope, like my dreams of Santa Clause, I don’t end up disappointed.

Related posts:

1. How to innovate in a recession A number of clients are asking us to help them...
2. No Christmas parties for us this year? This week a survey of 1000 British firms revealed that...
3. Creating your own work There are thousands of opportunities out there if you’re willing...

There’s less than four weeks to go until the end of the tax-year. If you haven’t used your ISA allowance for this tax year yet, that’s all the time you’ve got left! Don’t waste it, because once it’s gone, you can’t get it back.

A personal note from Jasmine (February 2010)

If you’re over-50 you can’t have failed to notice how desperate so many banks and building societies are to sell you even bigger ISAs. You’re the ones that everyone’s fighting over because suddenly you can put a lot more money in. You are now allowed to put £5,100 per tax year into a Cash ISA and a total of £10,200 into ISA-wrapped investments overall. Oh boy, do they want your money!

Sad then that Cash ISA rates are STILL so pathetic. In fact, you could be forgiven for wondering if it’s even worth putting your money in a Cash ISA. Well, if you will need the money in just a few years’ time then it probably is. The rates may be so low you want to cry, but at least it’s better than putting your cash in a normal, tax-paying savings account.

However, if you are looking to the longer term then no – I really don’t think it’s worth it. So long as you are willing to keep your money there for at least five years, it would be much better to put your money in a stocks and shares ISA or a corporate bond ISA.

Personally I like to put my full ISA allowance in shares and bonds products such as Exchange-Traded Funds (ETFs) and Tracker Funds. Many people now are also looking at Corporate Bond Funds. All of these are available already wrapped in an ISA. You just have to ask online or over the phone for your investment to be ‘wrapped in an ISA please’!

Do remember, too, that if you feel fed-up every time you look at the paltry interest you’re getting with your cash ISA you can now switch it over to a shares or bonds ISA.

Have a look at our articles on Exchange-Traded Funds and Tracker Funds and choose one that you would like to switch to. Then let the fund know where you want to move the money from when you fill in the form they send you.

Once you send off the form it’s up to them to chase the bank for your money. However, my contact, Danny Cox, at Hargreaves Lansdown tells me that the banks are a nightmare to chase and they can take ages to transfer the money…so don’t hold your breath!

• What is a cash ISA?
• Should I get one?
• How do I get one?
• Check out our best buys

The Santander and Alliance & Leicester Flexible ISA offer the best variable rate Cash ISA on the market. With a guaranteed minimum rate of 3.50% AER for 1 year, the account also allows penalty free instant access on withdrawals. But be warned, once the 12 months is up the Flexible ISA pays a variable rate which is currently just 0.50%.

What is a cash ISA?

A cash ISA (Individual Savings Account) is essentially a tax-free savings account available to any UK resident aged 16 or over.

An ISA isn’t an investment in itself. It’s just a ‘wrapper’ that protects your savings from tax. Putting money in a cash Isa is just the same as putting money in a building society account or online savings account, but you’re wrapping it in a tax-free savings ‘bag’, so when you get your interest on the money you don’t lose any of it in nasty tax payments.

How much can I invest?

You can put up to £3,600 into cash ISA each financial year – that’s 6 April to 5 April. From the 6 October anyone over 50 (or who will be 50 on or before 5 April 2010) can put an additional £1,500 into a cash ISA. The rest of us will also be entitled to this extra allowance in the next tax year – from 6 April 2010.

How does it work?

Once you put the money in you can take it out again, but you may not be able to put it all back into your ISA in the same tax year. This is because you can only put in money up to the savings limit for that type of ISA in any tax year. This rule applies whether the amount paid in is new saving or replacing amounts withdrawn earlier.

Once the money is in the ISA, however, you can transfer it directly into another ISA with another company, as long as that company lets you and you don’t exceed your annual allowance.

You’ll find that most banks will be letting the over-50s top-up their current ISAs with their additional allowance, but double check with your bank or building society.

Are all Cash ISAs the same?

No. Exactly like savings accounts you can get different types of cash ISA – easy access, fixed rate and notice accounts. And, in the same way as normal savings accounts, different types of cash ISA suit different people.

Easy Access ISAs – these are ISAs which won’t penalise you to withdraw your money should you need to. For this luxury though you’ll have to sacrifice the very best rates.

Fixed Rate ISAs – these are ISAs which guarantee the amount of interest you’ll receive for a fixed period of time. Generally the longer the term, the more interest you’ll receive. Remember though that with these ISAs you’ll be penalised for early withdrawals, and if you tie your money up for too long you might miss out if interest rates rise in the near future.

Notice ISAs - these are generally available as postal accounts and will allow you to withdraw money if you give a set amount of notice before you wish to do so.

Remember that you can transfer your cash between ISAs (as long as the new ISA you choose allows this). So, keep a close eye on the cash ISA best buy tables and transfer your money as and when you like to take advantage of the top rates. Just remember that some ISA providers may penalise you for withdrawing your cash early.

So, should you have one?

As with most things financial, it depends on your personal circumstances.

These are the reasons why you might not want to get a cash ISA this financial year:

You might want to put your full allowance into a shares ISA

This financial year (until 5 April) you can put up to £7,200 (£10,200 for the over-50s) altogether in ISA-wrapped investments either in two ISAs – £3,600 each in a cash ISA and a shares ISA (£5,100 each for the over-50s) or in one big shares ISA.

In the long term, investments in shares will give usually give you a bigger return. By ‘long term’ we mean at least five years. So if you’re planning to use your ISA allowance to invest for your future, we suggest you put that money into shares.

You might be planning to use that extra money to pay off all or part of your mortgage

This is a great idea, too. Paying off chunks of your mortgage means that you’ll be mortgage-free in much less time. You will save loads of money (like tens of thousands of pounds) in interest payments and your gains will be tax-free.

When you pay money into your mortgage and save on interest you don’t get charged any tax on that saving, because you’re paying off a debt. In that sense, it’s similar to putting the money into an ISA.

You might have debts to pay off

Unless you’re being charged 0% interest on your debts, or have a very low interest debt like a student loan, there’s no point putting money into any sort of savings account until you’ve paid your debts off.

The money you make in interest on your savings will be more than wiped out by the interest you’re paying on your debts. Pay those off first and then you can start putting your extra cash into savings accounts and other investments.

However, the main reasons you should put money into a cash ISA are:

• You can make more money on your savings than you would in an ordinary savings account, as you don’t have to pay any tax on the interest.
• You can take the money out at any time if you suddenly need it and you’ll have pretty much the same amount of money you put in, plus a bit of interest.

Money in stock market investments can go up and down wildly in the short term and it’s possible that they could be down just at the moment you need to access your cash. So – if you find the stock market way too scary but you still want to invest some money, a cash ISA is a pretty decent bet.

How do I invest in a cash ISA?

Easy. You get it in the same way that you would set up any ordinary savings account:

You can now apply for most ISAs online. Alternatively, if you want a postal one or you’d rather open your ISA over the counter,  go to one of the branches of bank or building society concerned and ask to open up the cash ISA you choose.

An online cash ISA may be easier to pay into, withdraw from and manage. On the other hand, by making your money accessible only by walking into the branch in person, you’re reducing your chances of dipping into your savings without thinking.

You know yourself better than anyone so make an informed decision about how much you trust yourself with the money!

Top Fixed Rate ISAs

With these accounts the interest rates are guaranteed not to change throughout the fixed term.

• The Santander and Alliance & Leicester Flexible ISA offers a guaranteed minimum rate of 3.50% AER for 1 year. The account even allows you penalty free, instant access on your withdrawals, and guarantees to pay at least 3 per cent above the Bank of England base rate for the first 12 months. Once the 12 months is up the rate becomes variable and at the moment pays 0.50%.
• Saga offers a two-year bond paying 3.50% AER with a minimum deposit of just £1.
• The Post Office pays 3% AER for its 1year fixed rate cash ISA, with a minimum deposit of at least £500.
• With the Halifax Fixed Rate ISA Savers you can choose how long you want to lock your money away for – 1, 2, 3 and 4 year terms are available. The 4 year bond offers 4.25%, the 3 year bond 3.75%, the 2 year bond 3.50% and the 1 year bond 2.50%, all on deposits of £500 or more. Withdrawals are not allowed. Early closure is permitted but you will lose 180 days’ interest. For each of the Halifax Fixed Rate ISAs, interest is paid on maturity

Top Variable Rate ISAs

Instant access accounts

• The Santander and Alliance & Leicester Flexible ISA offer the best variable rate Cash ISA on the market. With a guaranteed minimum rate of 3.50% AER for 1 year, the account also allows penalty free instant access on withdrawals. But be warned, once the 12 months is up the Flexible ISA pays a variable rate which is currently just 0.50%.
• First Direct pays 2.75% AER on deposits of just £1 (the rate includes a 2.52% bonus until 31 August 2011).
• Standard Life Bank Cash ISA Direct Access offers 2.65% interest paid on deposits of £1 or more. It is a no-notice account which you can operate by internet or over the phone, and transfers in are allowed. You can choose whether interest is paid monthly or yearly.
• Intelligent Finance Cash ISA offers 2.50% interest with a minimum deposit of £1, and transfers in are allowed. Access is online or by phone. Withdrawals can be made by transfer to another account with no loss of interest.
• Santander has an ISA paying 2.75% AER with instant access, but this does include a variable bonus of 2.00% for 12 months and you must have at least £9,000 to deposit.

Notice accounts

• Newcastle BS Reward ISA offers 3.00% interest (this includes a bonus of 1.00% for the first year). There must be more than £500 in the account, and withdrawals are subject to 120 days notice or loss of interest will be incurred. The account does let you transfer savings from other ISAs. Interest is paid annually.
• Buckinghamshire BS pays 2.86% AER on deposits of £100 on its variable rate cash ISA – you need to give 180 days notice for withdrawals and you can only access the account via branch or post.
• Chelsea BS Postal 30 Cash ISA offers 2.35% paid on balances with a minimum of £1. If you give 30 days’ notice you can make penalty-free withdrawals. Immediate access is subject to the equivalent of 30 days’ loss of interest on the amount withdrawn. As the name suggests, access is by post only. Interest is paid annually on 1st March, and transfers in are allowed.

Related posts:

1. More about Isas Individual Savings Accounts (Isas) are a good way to cut...
2. Saving: Best Monthly Interest Accounts If you want to make the most of your savings,...
3. Saving: the recession and your savings accounts It’s a tough time for savers. There are loads of...

Their measures include:

• a rise in top-rate VAT from 19%-21%
• increased duty on fuel, alcohol and tobacco
• a freeze on pensions
• a 30% cut in bonuses for all civil servants

Frankly, I think that’s just for starters. This isn’t the end of it either for Greece or for the UK.

I can imagine we will have all of the above (probably VAT will go up to 20% – which is pretty much the norm for the rest of Europe anyway) and I think we will see more government quangos being folded up too.

Right now we’re in the lull before the storm. The Budget is coming up at the end of the month (I assume it’s then anyway, they still haven’t announced a date) and there will be cuts and tax rises announced then, though not too much – it’ll be a political budget and they will want to win votes. Then it’s the election and there will be an emergency budget in June.

If we get a hung parliament we probably won’t have the kind of austerity measures we will need then but if there’s a definite mandate for one of the parties…oh boy, that’s when they’ll hit us with them. Even if it’s a hung parliament in May there will be another election fairly soon after and just as soon as one of the parties gets a decent majority, that’s when they will push through some of measures that have been threatened.

So what do we do? Work hard now to pay down debts and store up savings. This is going to be a sober decade. We might as well prepare for it.

Related posts:

1. Rate cut watchdogs This is the first time in my memory that all...
2. Back in the USSA The land of the free and the stalwart of the...
3. Rate cuts won’t work – derr, we know! Mervyn King (governor of the Bank of England) has just...

He’s not wrong: it certainly beats borrowing yet more cash to pay off loans. But when it comes to raising revenue, it can be tricky to ask for a pay rise (and in the current climate many of us would be disappointed if we did…). But there are other ways to bring the pennies in.

Old money

Wouldn’t it be great to rummage round in the attic and discover a huge trunk containing the family silver or a fabulous collection of swishy 1920s flapper dresses in perfect condition… or find out that a long-long lost relative has left you a pile of money?

If you think the latter might be the case, check out the Unclaimed Assets Register on Uar.co.uk. There’s a flat £25 fee for each search but the register does not take a percentage of the cash it uncovers. You can apply for a search for family members’ assets (as well as your own) if you suspect you’ve been left a bundle of money you had no idea about.

Or if, like me, you suspect that isn’t the case at all, you could always see if you have an old bank account lying round. I’ve never had enough money to realistically imagine that I have somehow forgotten about a vast sum of it and its gathering interest in an account somewhere. But hey, it’s always worth checking…

The site, Mylostaccount.org.uk helps you track lost accounts – it’s a free service, run by the British Bankers Association, the Building Societies Association and National Savings and Investments. (There are other services out there that charge you a fee for doing the same thing: ignore them). Apparently there’s as much as £850million lying round in dormant accounts that people are yet to reclaim.

As many as 680 people apply for the tracing service every day. Research shows that many of them have failed to keep up with bank accounts they have opened over the years; others had forgotten about accounts opened for them as children.

Forgotten about a pension you’ve opened at an old workplace? The Pensions Service offering a tracing service, see: Direct.gov.uk. Or if you think there’s a unit trust out there with your name on it, contact the Investment Management Association on ima@investmentuk.org. For insurance policies, try the Unclaimed Assets Register at: uar.co.uk. It says that £15billion worth of unclaimed assets lies unclaimed in the UK. Is any of it yours?

Does it work?

I decided to give it a go recently. I knew that I had a little money left in a savings account that I’d last used as a student. The service was quick and efficient: I had £182 left in the account and was given details of how to recover it. It’s not quite enough to retire on but it could buy a lovely new pair of shoes.

Knitting

On another note: I’m joining a knitting group. Lovely knitwear can cost a lot but it’s not always that cheap to knit things either: yarn can be expensive, so can setting yourself up with different sized needles, pattern books and so on. If you want a thrifty tip, check out Aldi’s new range of wool and needles. Scarf knitting kits start from £2.99, and double knitting yarn is from £3.79, so even if you’re as inexperienced a knitter as I am, you can’t really go wrong.

Related posts:

1. Free Money! Wondering how you are going to make it to the...
2. Free Money: Go Get It! You could have hundreds or even thousands of pounds lying...

Related posts:

1. The teen blog Feel free to drops as a line if you are...
2. Guest blog: A holiday with a difference Moneymagpie Anthony Newell tried out the cut-price Butlins hotel in...
3. Coming soon…The teen blog This exciting new blog will be here soon… ...

“Happy days are here again,
The skies above are clear again
So let’s sing a song of cheer again
Happy days are here again…”

Feeling good? Hold on to that thought then because just when they’re saying we really are out of recession (”ooh look, we grew a whole 0.03% in the last quarter, not just 0.01% – that’s a huge difference isn’t it?…isn’t it?”) we’ve got louder voices telling us we’re about to sink lower than Ashley Cole’s reputation in just a few weeks’ time.

Firstly there’s Jim Rogers’ prediction that the pound could collapse within weeks. Then Charlie Munger, business partner of the Sage of Omaha Warren Buffett, has written a modern parable about the US and the UK’s future if we don’t clean up our acts quickly. And it’s a pretty depressing prospect.

I’m not sure about Jim Roger’s prediction. He’s had a downer on Sterling for some time now. I don’t know what his problem is but he really doesn’t like us. However, given the real state of our economy, as opposed to what the government would like us to think of it, he’s probably got a point so we shouldn’t be too shocked if the pound dives pretty seriously some time in the next few months.

Charlie Munger’s depressing vision of the future for the West if it continues in the way it has been going, though, is certainly close to the truth as far as I’m concerned.

I’m not naturally pessimistic, in fact I’m often crazily optimistic, but I have been saying for some years now (along with many others) that if we, as a nation carry on living, spending and thinking the way we have been for the last 30 years, there will be extremely negative consequences. The way I see it, we ain’t seen nothin’ yet.

It’s not just governments and banks that have put us in this situation. It’s us. We’ve become lazy, materialistic, immoral and greedy. We’ve come to expect hand-outs from the government, the right to sleep with anyone and have children at any time whether we can afford them and look after them or not, and the right to get as much as we can for nothing without having to work for it. We really have lost our sense of values – both moral and financial. We’ve forgotten what’s important in life, the value of money and what our responsibilities are as well as our rights.

We’ve lost our focus to such an extent that things really have begun to fall apart. And they will continue to do so unless we wake up, stop dreaming away the hours and take more notice of real life and real issues than we do of XFactor and ‘celebrity’ affairs.

It really is up to us to pay down the £1.5 trillion we personally owe in mortgages, loans, credit cards and overdrafts. We did that (egged-on by government and banks of course) and it’s up to us now to produce more, start earning where we can and stand on our own two feet again. There really isn’t an alternative whatever politicians and would-be politicians try to tell us. We’ve got to get real. The next ten years are going to be the sober decade. The quicker we face up to it the less painful it will be.

So, altogether again…

“Happy days are here again,
The skies above are clear again
So let’s sing a song of cheer again
Happy days are here again…”

Related posts:

1. Beanz meanz economic meals (doesn’t rhyme, I know) I am only partially joking. After the runaway success of...
2. How much money is safe? Gordon Brown surprised the financial industry yesterday by saying that...
3. Happiness Is Right Now. I am happy. There is a cat on my lap...

Recipe: Leftover Pizza

For this recipe you only have to buy two ingredients, the bread mix and the pasta sauce. All the rest (cheese, ham etc) I would expect you to have in your fridge. So a really good dish for using up all those bits and bobs.

Ingredients for base:

I packet pizza dough (or bread) mix

1 jar pizza sauce or tomato-based pasta sauce

Topping: leftovers/cupboard staples: could include chopped ham, tin of tuna or anchovies, cheese – grated or crumbled, roast meat, capers, chargrilled peppers in oil OR roast Mediterranean veg i.e. peppers/onions/courgettes/aubergine, chopped fresh herbs, tin of drained sliced mushrooms etc

Method: Make up the bread mix/pizza dough mix as per packet instructions, leaving to rise as necessary. Roll out to a circle/rectangle and place on a oiled baking tray. Meanwhile assemble all the topping ingredients and chop as appropriate. Slather the base with tomato sauce (you won’t need a whole jar) and sprinkle over all your toppings plus salt and pepper and finishing with cheese.  Don’t put on too much or it becomes soggy and won’t bake through. Bake in a hot oven 220 degrees celsius for 8-10 minutes until crispy. Serve with salad if nodding towards health. Otherwise Coke and fries.

Related posts:

1. Cheap Food Recipes: All serve 4 – all under £1 a head! Hot Lentil Soup Ingredients: 1 green pepper, chopped 1 onion,...
2. Money grows on trees (well, plants) The Pick-Your-Own (PYO) season is pretty much over. I went...
3. Lidl is now my M&S… I am now really strapped for cash owing to my...

Comfort couture

I’ve always loved picking up different things to decorate the house with, so I wasn’t surprised to get a press release saying lots of people feel the same. In particular, it is comfortable ‘antique chic’ buys, that shoppers are after and charity shops are a good way to pick up some classics, according to the charity Sue Ryder.

The charity is calling the trend ‘comfort couture’ and reckons that sales of aged furniture are soaring (in at number five of bestsellers in its shops (after women’s clothes, accessories, bric-a-brac and books). Items most in demand include mahogany and distressed furniture, Edwardian wardrobes (costing £850 in retail stores, apparently, but selling for £55 in charity shops) and Victorian dining tables (£60 at Sue Ryder, said the study, £750 elsewhere). When I read that, I grabbed my coat and headed to the local high street.

Bargains

The charity shops were absolutely packed with furniture. Didn’t spot any Victorian dining sets but there was a gorgeous faded-velvet arm chair that looked like it had been pretty expensive in its day (more than it’s current £30 price tag anyway), blanket boxes for less than a tenner, smart solid-wood wardrobes and dining tables for around forty pounds and a lovely wooden shelving unit in fabulous condition for twenty five quid. I bought the latter, and it’s scrubbed up beautifully and is already installed in the alcove in my kitchen. I also bought a cool dressing table, which looks as if it was probably made in the 50s, with three funky shaped mirrors, all in great condition – for just £10. That was all I had time for but once I later collected and installed said items into the house, I realised that the best thing is that I actually properly wanted them and have recently looked elsewhere and seen some really expensive stuff. So that definitely counts as a proper saving…

In fact, in my opinion, it’s more of a saving than getting something for free that you don’t use. I recently rescued an old hat stand that had been thrown on a skip outside the local doctors surgery. After asking if I could take it, I happily strode home with it, thinking that a quick splash of paint later, it would be installed in my hallway. I think that was about eight months ago, and the hat stand is still languishing in my cellar. (My hallway is actually a bit too narrow for a hat stand, so once I do paint it, I will be taking it to the charity shop…).

Online deals

You can’t usually buy furniture online from charity shops (though you can get some great homeware from Oxfam.org.uk online). But there’s always eBay (can be cheap if there’s an item in your area you can pick up for free, so you save delivery costs), Freecycle.org is fantastic if you happen to get what you need for free or car boot sales car boot sales (Carbootjunction.com and carbootsales.org list what’s on) can be worth a trawl, as can those ads in the local shops that most people usually bypass. I once picked up a solid oak dining table for £25, after responding to a scribbled note in the window of the local newsagents.

Related posts:

1. The biggest secret freebies ’store’ I read a supposedly ‘great’ money-saving tip in a department...

Related posts:

1. Coming soon…The teen blog This exciting new blog will be here soon… ...
2. Stylish thrift blog Joanne O’Connell will start posting shortly. ...
3. Guest blog: A holiday with a difference Moneymagpie Anthony Newell tried out the cut-price Butlins hotel in...

Related posts:

1. Coming soon…The stylish thrift blog This exciting new blog will be here soon… ...
2. Guest blog: A holiday with a difference Moneymagpie Anthony Newell tried out the cut-price Butlins hotel in...
3. Coming soon…The teen blog This exciting new blog will be here soon… ...

Related posts:

1. Stylish thrift blog Joanne O’Connell will start posting shortly. ...
2. Coming soon…The teen blog This exciting new blog will be here soon… ...
3. Nectar Savvy Shopper Blog Are you a savvy shopper? Would you like to know...

Anyway this week I’m going to write about my favourite subject (other than Immy and Andrew of course).. clothes.

I love clothes, I love getting dressed in the morning and the feeling you get from feeling really put together. Now not having the time I used to to get ready I’m in need of a new simply ‘yummy mummy’ wardrobe. I bought a few bits and pieces last spring/summer but as you can imagine, none of them fit any more. Although I’m back down into my size 10, and even 8s there’s no doubting that my body has changed, and I need to dress to suit my new curvier figure.

So what’s a girl with no money but lots of style to do? Only one thing, sell all decent clothes on eBay. So I did, and, after parting company with maternity jeans, designer jackets and dresses I made just over £300. The feeling I got from selling these things was fantastic, not only will they go to a new loving home, I get money to replace them. I don’t know how eco that is, but I guess it’s better than throwing them away (which I would never have been able to do).

So with £300 to spend I decided on a capsule wardrobe of outfits that would go with my favourite other bits and pieces, and take me into my fourth decade stylishly and on trend.

This is what I bought.

My favourite: a belted jumpsuit from M&S Portfolio range – cost £60, can be worn with my flat ballet pumps or my Bally wedge heels which I bought from Friends (dress agency in Bishops Stortford)

Two pairs of jeans – both from Top Shop (www.topshop.com). I chose Jamie (black) and Baxter (indigo) styles, both are skinny fit although the latter being a bit more roomy. Can be worn with most anything. Total – £80.

A tux-style jacket from Top Shop. Lightweight wool, can be dressed up or down. Total, £60.

Pair of shoes from Oasis - £45. Look quite retro but go with jeans, suit skirt etc etc

Leather look treggings - £45. I get so many comments about these. I’ve even worn them on their own!

Stripy top from Top Shop with bow detail, £25. Goes with all the above

Okay, I went slightly over budget – £15 to be exact – but the point is I got a new wardrobe without having to spend very much at all. I’ve not stopped yet though I’ve got my eye on the vests from the Isabella Oliver 365 range as I know they will be fantastic quality. There are also things I need but not mad keen on buying such as a suit and some new underwear. But I guess I’ll just have to sell some more stuff, I’ve got an amazing pair of Karen Millen wedge heels that I know will find a great home somewhere…

Related posts:

1. The right pair! This week i’ve presenting my findings on the best, and...
2. Mother & Bump – get your top on In the last year I’ve gone from paying off debts,...
3. The end (of the year and my pregnancy) is nigh While I sit here waiting (v. impatiently) for my baby...

1. Do you know your net value?
2. Do you have a plan?
3. Do you know how much your debts really cost?
4. Are you prepared for the unexpected?
5. Do you know what your monthly incomings and outgoings are?
6. Are you protected from fraud?
7. Do you know how inflation affects your savings?
8. Are you putting enough aside for your future?
9. Are you spreading your investments?
10. Do you know how to minimise your tax bill?

1. Do you know what your net worth is?

Your net worth is just how much is left when you take away your debts and borrowing from your assets. For example, you may have a house worth £250,000, a car worth £10,000, a pension worth £20,000 and savings amounting to £5,000 – but if your mortgage costs £200,000, you have a car loan of £8,500 and credit card debts of £3,000, then you’re really worth £73,500 not £285,000! It’s a sobering thought.

Work it out. Once you know what your actual net worth is you can be much clearer about how much you need to invest for your future. It’s no good imagining that you will be happy in your nice big home when you retire. If you still have a mortgage to pay you will either have to continue working or sell the place to cope with the repayments. Also, the older you are, the more you have to have in investments, and the fewer debts, to support yourself after retirement.

It may be depressing but once you know what your real financial worth is you will be able to plan properly.

2. Do you have a plan?

Sit back, close your eyes and daydream. What do you want to do with your life in the next year, five years, twenty years and more? Write down a list of aims – perhaps you want to have a baby, take a year off to see the world, pay off your mortgage early or set up your own business.

Once you have a list of what you want to do and when you want to do them, work out how much these would cost and how much you should save for them. You might get a shock if you think you want to do something next year that could cost you £20,000. Could you put it off and save hard in that time? Could you sell something to fund it?

Also, when would you like to retire? Do you know how much you have already saved towards it? You might not be on track at all so you will have to change either the date that you retire or really turbo-charge your investments and the amount you put in each year.

Unless you have a plan, you’re unlikely to meet your goals. This is what it’s all about so get that pencil and paper out and start dreaming.

3. Do you know how much your debts really cost?

Be honest with yourself about the interest you’re paying on your credit card, car finance, loan or mortgage. It’s never as simple as just paying what you owe and you may be surprised to learn how much you are actually throwing away on that store card with 29% APR (eek!).

Many people only take notice of the amount they are paying each month into loans and credit card bills. If they can cope with that (often just the minimum amount) they think they are on top of things. But If you’re not paying off the full credit card balance each month, much of the money you are paying is thrown away on interest payments. Why not look at some of your old statements and add up the interest you’ve paid in the last year. It will make you sick to see how much cash you’ve just thrown into the pockets of the credit companies.

The important thing is to pay as little interest as possible. If you can’t pay off your debts in one fell swoop, at least switch them to lower interest rates if you can. For credit card debts, look into getting a 0% balance transfer credit card that you can load all your existing debt onto and gradually pay it off without building up any more interest. Check out our comparison page. Or it may be better to go for a low lifetime balance transfer card where you pay the same interest rate until the whole thing is paid off. See the latest low lifetime balance deals here.

You could transfer all your cards and loans into one low-rate loan. This is right for some but not everyone. If you do consolidate your debts like this make sure you CLOSE DOWN YOUR EXISTING CREDIT CARDS. Don’t give yourself any temptation to spend even more! Find the cheapest loan available to you here.

4. Are you prepared for the unexpected?

It’s extremely important to have a back-up plan for anything that may occur unexpectedly, like redundancy or the death of a spouse. If you suddenly lost your income, how long could you last on your savings? It’s a nasty thought but we all need to be prepared, particularly in these times of uncertain employment. This is why you need to set up a savings safety net.

Once you have paid off your debts, the next essential step is to set up your own ’self-insurance’. This is a savings safety-net – a lump of money that you accumulate in a savings account (ideally instant access) that you can dip into if an emergency occurs. Ideally you need to set aside enough money to cover you if your income dried up for at least three months. In fact, it would be better to put enough money aside to cover yourself for at least six months.

Sit down and work out how much money you need to shell out each month in order to keep the roof over your head and body and soul together. Multiply that by three or six and that’s the amount of money you need to set aside as your safety net. So, for example, if it costs you £2,000 a month to keep everything going, you will need to set aside at least £6,000 in a savings account which you do not touch unless you have an emergency like you lose your job.

It is possible to take out redundancy insurance but these policies are crazily expensive and come with lot of limitations such as a capped amount of income you can receive and time limits on how long you will receive payments for. Most only pay out for 12 months (once they pay out) so it’s a race against the clock to get a new job.

It’s still a good idea to protect yourself against accident or sickness that would stop you working with income protection insurance. If you have a home,make sure you’ve taken out Mortgage Payment Protection Insurance, which should also pay out if you are out of work through illness or redundancy.

If you have a family, another ’safety-net’ you really must set up is life insurance. Think about how your family would cope without it’s main earner keeping it going. It’s important for any parent to pay into a good life insurance policy (not necessarily the cheapest, but the best one for your needs). Look at our article here on how to choose the best life insurance policy for you and then make your choice.

5. Do you know what your monthly incomings and outgoings are?

If you don’t, you haven’t a hope of keeping on top of your money. Knowing how much money you’ve got coming in, and how much you have to spend each month  is all there really is to setting an effective budget. If your income is erratic, try and work out an average monthly income figure for yourself.

It might be boring, but taking time to scan through recent bank statements is an extremely useful task. It’s likely you’ll find something on there that you don’t know you’re paying for. And if you don’t find this, you’ll most probably find something you don’t need to be paying for.

If you don’t need the warranty on your laptop anymore, cancel it. If you don’t use the benefits on your bank account, change it. And if you can get a cheaper deal on your utility bills elsewhere, then switch them! There is absolutely no point in paying for things we don’t use, so take the time to research and find a better option.

You could consider changing;

• your electricity and gas suppliers
• your broadband supplier
• your landline
• your mobile phone network

You could save up to £398 a year by changing your gas and electricity suppliers, You could make £50-100 just by switching your bank account and you can save £100’s by getting cheaper broadband and phone packages, often by moving to a good TV/phone/broadband bundle.

6. Are you protected from fraud?

Fraud is on the rise, particularly through the internet, and everyone has to be on their guard. You can’t be expected to know every one of the latest scams but you can do some things regularly to protect yourself from most attacks:

1. Check your bank account and credit card bills. Make sure you check your bank account, ideally at least once a week. Get into online banking and you will be able to check it at any time of the day or night. Go through the whole list of transactions on your credit card bill and question any that you don’t recognise. The quicker you find the problem, the sooner you can be reimbursed.
2. Check your credit file to make sure no one has taken your identity. Sign up for free to CreditExpert so that you can see what has been written about you and correct any mistakes or fraudulent claims. If you’ve been the victim of identity theft before it’s helpful to pay the monthly fee so that you can keep an eye on your record at all times.
3. Never click on links that are sent to you by email or through Facebook, Twitter or other social networking sites if you are not completely sure it is genuine. This goes for emails apparently from friends as well as banks.
4. If it sounds too good to be true, it probably is. There are more and more scams about masquerading as proper businesses offering to cancel your debts or help you make money in your spare time. Check with Moneymagpie first before you sign up to anything.
5. Keep looking at our Rip-off blog to keep yourself updated on the latest frauds.

7. Do you know how inflation affects your savings?

Inflation can seriously eat into the value of your savings and investments. This is because inflation is about the rising price of products and services. It means that £1 won’t buy as much in ten years time as it will today. For instance, imagine that inflation went to 5% next year. This would mean that something costing £1 today would cost £1.05 the year after.

Now imagine that your £1 was in a savings account that paid 3% interest. That would mean your £1 would have grown to £1.03 (not taking into account any applicable taxes). But with inflation outstripping your savings rate (at 5%) you would actually be losing money by keeping your savings in that account.

The point of having savings and investments is that you want your money to grow over time. The thing is that whatever growth you get isn’t the real, practical amount that your money has grown by because, over time, the money you make isn’t worth as much as it was before.

If you leave your money in a savings account that doesn’t match inflation – and many don’t – you will eventually lose money. If you earn 2.5% interest after tax on your savings account and inflation rises to 4%, then you are actually losing 1.5% a year.

This is the main reason why savings accounts aren’t good for long-term investing. Over the last few decades savings accounts have returned around 4% on average. The average rate of inflation over the last ten years has been 2.7% so really the actual gain you’ve made with a savings account is usually very small, if anything at all.

For long-term investing, therefore, you need to spread your money across products that give you more than this on average. This is why shares, property and bonds are better products to invest in for the long-term. For short-term savings, at least go for the highest rate of interest you can find.

Alternatively… you can avoid banks altogether and become a Zopa lender – read up on this in Jasmine’s blog and in our article.

8. Are you putting enough aside for your future?

If you’re relying on receiving a state pension to get you through your retirement – don’t! Right now, a single person will receive around £95.25 a week – that’s just under £5,000 a year – on the State Pension, so you’ll need to save more of your own money as well to have a decent living.

You don’t have to put your money in a pension to save for your future but it’s a good place to start. If you’re offered a company pension, go for it. It can often mean free money from your employers so grab it with both hands. If you’re self-employed, or you don’t get a pension from your company, look into setting up a cheap, easy Stakeholder Pension. Or, if you’re feeling more adventurous, set up a Self Invested Personal Pension (SIPP). The big advantage of pensions is the tax benefit – the fact that the government puts in the tax you would have paid on any money you contribute.

However, pensions aren’t the only way to save for your future and you certainly shouldn’t rely on them only (as explained in point 9 below). There are also shares (wrapped in ISAs to avoid tax), corporate bonds and property for a start. The important thing, though, is that you put enough away each month/year to build up a nice pot of money to keep you going when you retire.

As a general rule of thumb, to work out how much of your wage your should be saving to put towards your retirement, you should halve your age and use this as a percentage. So if you’re 25, 12.5% of your salary should be saved or put into investments. Whereas if you’re 50, you should save 25% of your salary – obviously catering for the reduced amount of time you have left to save before reaching retirement age.

To give you something to aim for, if you were to retire today and you wanted to have an income roughly equivalent to the national average wage (about £23,000), you would need to have around £400,000 saved up. Scary huh? If you’re planning on retiring in ten, twenty, thirty or more years, you will need to have more than that because of inflation. So, get on with investing.

9. Are you spreading your investments?

When it comes to investing for your future, one of the most important things you must do is to spread your money across at least two or more different asset classes.

By asset class, we mean property, pensions, stock market, bonds etc. Basically, with investments, it’s never a good idea to put all your eggs in one basket and rely on one type of investment to bring you a return. No one knows what will happen tomorrow. Even houses aren’t as safe as houses so don’t put all your eggs in one basket – spread the risk across pensions, property, shares, cash and other investments. Just make sure that you keep an eye on your investments (just once or twice a year will do) and top them up where you can so that you are on target to have enough to retire on (as explained in point 7 above).

10. Do you know how to minimise your tax bill each year?

As a nation we waste a staggering £10 billion a year by paying tax we could avoid. Now, there is a big difference between evading tax and avoiding it. Tax evasion is illegal – you’re trying to wriggle out of paying tax you actually owe. But avoidance isn’t – it’s sensible and it simply means moving your money into places and products that don’t have to pay tax, or don’t pay as much tax.

We have an article on how to pay less tax with many of the ways in which you can avoid giving your hard-earned to the government (however much they may need it right now!). However, there are some basic things that everyone should be doing to cut their tax wastage:

• Use your ISA allowance

ISAs are the obvious way to cut down on paying tax on your savings and investment income. Until April 5th this year we can put up to £7,200 into ISA-wrapped investments. From 6th April onwards it’s a good £10,200. Try to put as much as you can into either a full shares-based ISA (you can put the whole amount into one of those) or at the very least £3,600 (£5,100 from 6th April) into a cash ISA.

• Spread your investments with your spouse

We all have our own income tax and Capital Gains tax thresholds. If you are married or in a civil partnership, you effectively have twice the threshold of single people. So use it! If you have growing savings and investments then put the majority of them in the name of the lower taxpayer, as this will reduce your overall tax bill as a couple.

• Pay into a pension

Yes, pensions are pretty unloved at the moment but they are a great way of reducing the tax you pay to the government. They’re particularly helpful for people paying higher rate tax. Any money you put into a pension has the tax you would have paid added in to the pot instead. It means your investment grows from the moment you put your money in.

If you’re not happy with conventional pensions consider opening a SIPP (Self Invested Personal Pension). These are rather like a pension ‘bag’ into which you put whatever investments you like (within a list of allowed products). These can include shares, bonds, commercial property and cash.

We particularly like the SIPP product produced by Hargreaves Lansdown as it is cheap and easy to run. They also have a helpful, free downloadable guide to SIPPS which you should read if you’re interested in the idea.

• Make a will and set up trusts

It doesn’t matter how old you are – if you have any family, property or anything of value – you should make a will.

More than half of us die intestate (i.e. without having made a will) and the Government love this, because it means they can then help themselves to 40% of your worth before your family and loved ones even get a look in. Not only that but they then give the rest of your cash out according to set rules, not according to who you would like to have the money.

Wills are easy enough to make. The best solution is to get your solicitor to draw one up for you. Alternatively, you can do it yourself using a will pack from places like WH Smith and Tesco, or go online to The Co-Operative Legal Services, who will charge £115  for a standard will or £185 for a will for yourself and your partner.

If your total worth is above the inheritance tax threshold of £325,000 (for 2009-10 tax year) then you will need to make provisions for the rest of the cash to stop the tax man getting his hands on it rather than your children.

• One thing you can do is to give some of your wealth away while you are still alive. Any money or property you give away (and don’t use yourself) at least seven years before you die is free of inheritance tax. So keep that in mind if you have time to plan.
• If you’re married or in a civil partnership your spouse/partner does not have to pay inheritance tax on your estate. Not only that but now, when they go, their inheritors will be able to enjoy the combined inheritance tax threshold (currently £650,000). So keep this in mind when planning who gets what  and when.
• You can give away gifts worth up to £3,000 in each tax year and these gifts will be exempt from Inheritance Tax when you die. You can carry forward any unused part of the £3,000 exemption to the following year, but if you don’t use it in that year, the carried-over exemption expires.
• If you are quite well off (and with the value of many properties you really don’t need to be fabulously wealthy to be caught in the inheritance tax net) you should consider a trust or two to protect your inheritors from paying tax. Trusts are complex creatures and you will need to get a good tax accountant or probate specialist to set one up for you. First, though, get it clear in your own mind what trusts are and whether you would really benefit from one by reading this explanation in the HMRC website.

Useful Links

• Direct.Gov
• Co-Operative Legal Services
• Zopa
• Hargreaves Lansdown SIPP guide

Related posts:

1. Detox your Finances It’s a tough time for everyone at the moment. Even...
2. Spring Clean your Finances Spring (and even Summer) is a perfect time to get...
3. Student finances – tuition fees After all the political controversy of the last few years,...

• So what exactly is a SIPP?
• Download the free Hargreaves Lansdown guide to SIPPs
• Should you go for it?
• How much do they cost?
• How to find the cheapest SIPP
• Our favourite, award-winning SIPP product
• Now here’s how to get started

So what exactly is a SIPP?

SIPPs or ‘Self Invested Personal Pensions’ are personal pension wrappers that allow you to pick your own investments or appoint an investment manager to look after the portfolio on your behalf.

A SIPP is a kind of pensions ‘bag’. Inside this bag you can put a broad range of investments that you choose yourself. Once they’re in the SIPP these investments have all the tax benefits and access regulations that all pensions have.

You can use a SIPP to invest in anything from star fund managers to low cost trackers and Exchange Traded Funds as well as equities, cash deposits, futures, commercial property, unit and investment trusts. The pension world is your oyster!

Imagine you’re investing in shares or bonds and were able to wrap them in a tax-proof blanket – BUT you couldn’t touch them until you are at least 55. That’s more or less the opportunity and challenge that a SIPP presents.

There’s plenty of information about SIPPs out there – download the free Hargreaves Lansdown guide to SIPPs here which is crammed full of details about what a SIPP is and where you can invest.

What happens when you retire?

As of April 2010, once you’ve turned 55 you can take up to 25% of the pension pot as a tax-free lump sum. What’s left can be used to take out an annuity and provide a taxable income for life – OR you can leave the fund invested and take income from it (known as income drawdown). This applies to SIPPs as it does to any other type of pension.

Should you go for it?

The popularity of SIPPs has grown considerably over the past few years as their costs have come down. Despite what you might think, these are not just for the mega rich or the really clever investor. In fact a low-cost SIPP can offer you more investment choice than most insurance company personal pensions and could cost you less money.

There is a lot of choice in the SIPPs market these days. This is both a blessing and a curse, because there are all kinds of charging structures and investment choices to wade through. The good news? It’s likely there’s something out there to suit your exact needs. The bad news? It may take some effort to find it.

SIPPS are not for everyone. They are best for those who:

• are prepared to put in the time and effort to decide what to put in their SIPP
• have at least £25,000 (better still £50,000) to invest in them
• have the confidence to make their own decisions, rather than trust to pension fund managers (who, let’s face it, regularly get it wrong anyway)

If the above list doesn’t look like you, then you could be better off just going for a cheap stakeholder pension. Whilst you don’t need to be an investment expert to hold a SIPP, you do have to be comfortable making your own decisions and if you do want a plan that offers advice you will generally have to pay more, so it may be that simple stakeholder or personal pension plan is more suitable for you.

How much do they cost?

If you do decide to go for a SIPP there will be two main fees to worry about

• the set-up fee
• and the annual administration fee.

If you go for a low-cost SIPP, which has a limited range of investment options, you should be able to find one that won’t charge a set-up fee and either no annual fee as well, or a significantly reduced annual fee.

More expensive SIPPs, which offer a full range of investment options, will cost you around £300 in set-up fees for a £100,000 Sipp and £500 a year in annual fees. These tend to be flat-rate fees so this is only really suitable if you have a large pension pot to invest.

How much can you invest?

You can contribute up to 100% of your earnings – and enjoy full tax relief on the total – up to the maximum annual limit (which for the current 2009/10 tax year is £245,000). The total amount you are allowed to have in your pension pot overall is £1.5 million. Note that most SIPP providers will ask for a minimum transfer or contribution amount – but this can start from as little as £50 per month.

These payments are made net of tax – so to put £1,000 into a SIPP, it will only cost you £800 and the Government will cover the other £200. If you’re a higher rate tax payer you can claim a further 20% via your tax return and enjoy contributions of £1,000 that only cost you £600. That’s the main joy of pensions generally – the big tax advantage.

How to find the cheapest SIPP

First of all, ask yourself some important questions.

How much is the set-up fee? This could be nothing – or as much as £1,000 so take the time to check.

Is there an annual management fee? This is applied every year and could be a percentage fee (typically 0.5%-0.75%), or more likely a flat-fee of between £100 and £500. Look for one that levies either no fee, or only a very low fee. There may also be annual fees (around 1.5% a year) which are applied to the funds within your Sipp so find out and see if you can have these reduced.

How much are the transfer/exit fees? These are applied when you move money, funds or shares into a SIPP from another provider. Dealing charges are another thing to watch out for as these can vary from one provider to the next.

What is the interest rate? If you’re planning to hold any cash within your SIPP, see what interest rate you’ll get. Inflation can quickly erode cash savings if the interest rate isn’t competitive – rates vary from as little as 0.1% to a more appealing 5% so always check the rate if you’re going to keep money in cash, i.e. savings accounts.

How to get started

First of all, decide what you want from your SIPP and make sure you get the right one for your needs. Don’t pay extra by going with a provider that allows you to invest in commercial property if you don’t plan to do exactly that.

Broadly speaking there are three SIPP types to choose from:

• low-cost SIPPs,
• insurance SIPPs
• ‘full SIPPs’.

Low cost SIPP

Investment level: Beginner to intermediate

One of the pleasant knock-on effects of the introduction of Stakeholder pensions is that the costs for pension provision have been forced down elsewhere. Low cost, usually online, providers being a case in point, and this has helped bring down the cost of SIPPs. Low cost or ‘Supermarket’ SIPPs offer a selection of funds, stocks and other investments for you to choose from within the confines of your SIPP.

Yes you have to do the selecting (that’s the low-cost element!) so it’s time to study those funds, shares, stocks, bonds and what not. Alternatively you could keep it fairly simple and dependable and pick tracker funds that are on a pretty reliable wicket.

With a low-cost SIPP you can make your own investment choices without using an IFA (that’s independent financial adviser). Expect a more limited range of investments to pick from – usually funds, cash and shares – often in exchange for no set-up and either no annual fee or a low annual fee (although you will still pay dealing costs for buying and selling shares).

• Competitive providers include Fidelity Fundsnetwork, Hargreaves Lansdown.com, James Hay and Killik. None of these providers charge set-up fees.
• The Vantage SIPP from Hargreaves Lansdown is one of the most popular low-cost SIPPs around winning a plethora of awards including being voted Best SIPPs Provider by readers of What Investment in 2007, 2008 & 2009. This really is a cheap option with no set-up fee, no transfer charges, no annual charges on cash and over 2,000 funds and free fund dealing. Find out more here.

Insurance SIPPs

Investment level: Intermediate

Now we are in the realm of paying for investment advice as part of the service here.

The alternatives of cheap, simple stakeholder pensions and low cost SIPPs renders Insurance (also known as Deferred or Hybrid) SIPPs an option that most should avoid.

They work by putting your money into one fund until it has grown sufficiently to be used as a SIPP. It’s fairly effortless for you but no less effort than selecting a simple Stakeholder pension containing tracker funds so we don’t really see the point.

Full SIPPs

Investment level: Advanced

These are high risk, high effort, large investment required, but the highest potential return. It’s all up to you so you’d better be prepared to do the necessary research.

You might expect these Sipps to be low cost because you’re putting in all the effort, but they may not necessarily be cheap because the full SIPP providers will charge you for every trade you make. They may even charge you for ‘inactivity’!

If you’re feeling up to the challenge of managing your own fund then, according to Robbie Burns in ‘The Naked Trader’ who ‘loves’ his full SIPP, you’ll need two things:

• An execution-only stock broker (online ones are cheapest – we like TD Waterhouse)
• A pension trustee

The trustee looks after your money keeping it secure in a recognised pension account (i.e. you can’t dip into it before you are 55) for an annual fee of around £150 to £500. When you pay however much of your salary you want into your full SIPP the tax rebate will be added automatically.

It might be best to start with a broker you like, such as TD Waterhouse, and then see if they have any special deals with good pension trustees.

If you are going to go down this route then remember, you are looking for long-term growth and this is money that you are going to really need when the time comes around. So keep the risk level low to moderate.

Useful Links

• Download the free Hargreaves Lansdown guide to SIPPs
• Try execution-only online stock brokers TD Waterhouse

Related posts:

1. Get the most from your company pension Company (or occupational) pensions are normally a pretty good proposition,...
2. Stakeholder pensions – simple and cheap A few years ago, in a bid to make personal...
3. Pension or retirement fund? When people talk about investing for retirement they usually mean...