Whilst the most pressing issue for the government in power come May 7th will be to set about reducing the budget deficit, at the same time, it should not lose sight of the importance of encouraging the savings habit in the UK.
The three main political parties each have a different view on Child Trust Funds, with Labour looking to carry on with the scheme as it is, the Liberal Democrats wielding the axe and the Conservatives maintaining the funding for the poorest third of families and those with disabled children only.
Forget the Bank of Mum and Dad. First-time buyers have found a new way to raise the extra money they need to finance the deposit for their first home: selling make-up from cosmetics company Avon.
The door-to-door makeup sales firm, for whom Hollywood actress Reese Witherspoon advertises their products, says it has seen a “huge growth” of new recruits who cite saving for their first property as a reason to join Avon and supplement their income.
Who says you can’t get money for nothing? Ok, so most people do. And on the whole it’s very difficult to get anything for free. But two websites, Groupola.com and MyVoucherCodes will be giving away a free £5m online from midnight tonight to midnight Wednesday 17th March. That’s £5 per person who signs up to Groupola.
So, what’s the catch? There is one, but it’s not too onerus. The £5 is not given as cash but as credit that will go into the customer’s Groupola.com account, which can then be used to pay for offers through the site.
The Children’s Mutual, a child trust fund provider, today put out a press release giving five reasons why child trust funds, established five years ago, have “revolutionised” savings for young children. The reasons include the relatively high rate of take-up – about 70 per cent of parents actively invest the £250 voucher – and the fact that the vouchers are helping low-income families to save for their kids.
Child trust funds aren’t seen as that relevant for higher income families, however. You can ‘only’ invest £1,200 a year into them, meaning they don’t go far enough for some parents. The funds get flak for other reasons too – the wisdom of making a lump sum of potentially £40K available to an 18-year old is one objection. And nearly all the funds wind up in stakeholder accounts – which have pretty dull performance.
But having just trawled through HMRC’s stats on child trust fund contributions, I think parents who are willing to invest the money in the stock market should really give this more thought.
The start of the new year traditionally brings resolutions and plans to change for the better. But rather than just aiming for better physical health it’s worth thinking about how to improve your financial health too.
I spoke to Martin Palmer, head of corporate pensions marketing at Friends Provident to get his top ten long-term saving tips for the New Year:
Christmas is here again and charity campaigns are working hard to make us part with our money. But it seems they will have to work even harder as total giving by individuals is down 11 percent in 2009, which means we have given £1.3bn less than last year.
But while some people are battening down the hatches and hiding their money under the mattress there are others who do still want to give to charity. Here are twelve ways to make your donations to charity go further:
1. Tick the Gift Aid box – If you’re a UK taxpayer making a donation to charity in the UK, you can add Gift Aid. This means Her Majesty’s Revenue and Customs will give an extra 28p to the charity for every one pound you donate. If you’re a higher-rate taxpayer you can also claim the difference between the basic and higher-rates of tax on your donation.
The mear mention of schools can be enough to send parents with young children into a panic. But when you add fees to the conversation things get even more tense.
To make it a little easier, here are a few points tips for saving for school fees*.
First, things to consider before your children start their education:
1: Look at the total costs of education before you start. It costs approximately £150,000 to £175,000 per child for a day school from 5 to 18 and over double that for boarding. Remember to multiply the number by the number of children as it can come as quite a shock when all your children are at school concurrently.
2: If your school of choice offers a primary / prep school as well as secondary, consider moving your child out of the normal windows of 7, 11 or 13 to avoid some of the competition. During these difficult times many schools have vacancies lower down the schools and will accept a child at 10 or 12 who can move to fill a place.
We’ve just heard that the judgement on the bank charges test case will be given at 9.45am at the Supreme Court’s Parliament Square HQ, London, next Wednesday 25 November 2009. So if you’re one of the thousands of individuals to have been charged high fees from your bank watch out for the result of the case on our homepage.
The case has been followed closely after it was revealed that the banks have made an estimated £2bn a year by charging customers hefty fees for unauthorised overdrafts, bounced cheques and direct debits. The major legal challenge is examining whether these are legally “fair”. If the supreme court justices rule against the banks, it could open the door for billions of pounds worth of charges to be paid back.
Speaking ahead of the release of tomorrow’s national insolvency statistics Deloitte’s Contentious insolvency Group predicts the figures will break through the records again.
Louise Brittain, partner in the group, expects the number of people filing for personal insolvency in Q3 will exceed the 30,000 mark. She says:
This figure is staggering, and unfortunately the end is not in sight. I fully expect that by the year end, 2009 will have broken all personal insolvency records, with the total number of petitions likely to exceed the 130,000 mark.
The types of people filing for insolvency is also expected to change. There will be mix of sole traders and individuals with high credit card debt and also those who have lost or have had to reduce their income and have struggled to make the repayments on their fixed rate mortgages.
Look out for the piece on insolvency tomorrow on Personal Finance.
If you’re a customer of Lloyds TSB, Halifax, Cheltenham & Gloucester, Bank of Scotland, Royal Bank of Scotland, NatWest, Direct Line, or Churchill… then I wouldn’t blame you for feeling confused by today’s news about bank sell-offs.
What will actually happen is this:
Lloyds Banking Group is going to sell off its Cheltenham & Gloucester branches, its Intelligent Finance subsidiary and its TSB brand, to satisfy European state aid rules. So if you have an account or a policy through any of these businesses, you’ll end up as a customer of another company.
Royal Bank of Scotland (RBS) is going to have to sell off it RBS branches in England and Wales and its NatWest branches in Scotland, to comply with the state-aid rules. It will also have to sell its Direct Line, Churchill and Privilege insurance operations. So again, if that’s where you currently bank or buy your insurance, you will have to assess what a new owner can offer you, or transfer back to RBS or another company.
But don’t worry – nothing will change right now. Lloyds and RBS have been given four years to complete the sell-offs.
If you want to know what difference it will ultimately make to your finances, read our consumer guide here.