With simple 1% changes we can all make a difference to our expenditure which will in turn increase the amount of wealth we have. Watch video.
Firstly, don't panic, if we are fearful we tend to make the wrong decision and create more challenges. You need to sit down and create a sensible, controlled debt action plan so that you can manage you way into calmer waters. For further advice then your local Citizen Advice Bureau at https://www.adviceguide.org.uk can offer further assistance.
The higher your credit score, the cheaper the borrowing, so the more investments you can make, and the wealthier you will be.
If you are not happy with your Credit score then contact the agency and explain what is incorrect and if you have no luck then go to the Financial Ombudsman at www.financial-ombudsman.org.uk
ISA stands for Individual Savings Account and is designed as a tax efficient way to save. The interest on a cash ISA isn't taxed so all the interest you earn you keep.
This current 2012-13 tax year, the annual ISA allowance is £11,280, but only £5,640 of that can be used for a cash ISA. From April 6 2013 onwards, this will increase to £11,520, of which £5,760 can be put in a cash ISA.
Well basically it’s just ‘putting a bit by for the future’. It’s fundamentally only a savings scheme where you save up over your working life – until 65 (ish) and then when you stop work you get the money back by receiving an income from the pot of money you have saved – and that pot is your pension fund, and the income is the pension itself.
There are three basic types of pensions:
Government - which you pay into through tax and national insurance that are deducted from your earnings.
Coporate pensions - your employer may provide their own pension which you may have to contribute to or it may be non-contributory (you don't put in but the employer does) or it may be a joint scheme where you save some and your employer does the same.
Personal Pensions - where you look after your own pension savings. The main personal pension is now a SIPP - a Self Invested Personal Pension but there are other choices out there including a stakeholder pensions.
No, but you might want to stick with it if you are lucky enough to have a final salary scheme. Other than that you can transfer a company or employer pension into a SIPP or another scheme and you won't lose the benefits even if you leave the job.
What you do here is ask your current employer, or pension provider if the pension is transferable, what the transfer value might be and how to transfer it - they should send you all the details. You then transfer the pensions savings pot to a pension fund provider of your choice and that may mean that YOU have control of it.
Choosing a mortgage is likely to be the biggest financial decision anyone makes so it’s worth getting it right because mistakes can be costly! Interest rates are low at the moment and first time buyers can get some great deals. The Governor of the Bank of England, Mervyn King has already indicated that interest rates are unlikely to be going up in the near future (he suggested that there will be no change until 2014 – 2017) so if you’re looking at a fixed rate mortgage make sure it extends beyond that time frame. More likely you will be looking at a variable rate mortgage at the moment – because the rate is unlikely to vary – so you have nothing to lose and very little to gain by fixing your rate!
Once you have that mortgage treat it like a hot potato and get rid of it as soon as possible – don’t sit there and wait 25 years because the longer you have that mortgage, the more you repay and you could pay back several times the amount you borrowed. As long as there are no penalties for doing so, (check the small print) overpay a little every time you can on your mortgage either regularly or periodically. That has a dramatic effect on the final outcome. A simple overpayment of £50 per month on a £150,000 25 year mortgage will reduce the mortgage length by 2 and a half years and the interest paid by £12,776 – think what you could do with that!
Peer to Peer companies act as a link to those with cash to spare with those wanting to borrow money. None of these schemes is covered by the Financial Services Compensation Scheme so savers have no recourse for compensation if they lose their money.