ISA: You Really Need One

With the budget still fresh in all our minds, Kiran Trivedi readers, I want to hone in this week on ISA’s. You really need one. What are they and how can you use them to add a little extra to your budget in the long term?

There are so many financial products out there that promise great returns on your savings that sometimes you don’t even know how to begin to wade through the information to find the best option for you. The ISA is that option.

An ISA is an Individual Savings Account and they’ve actually been around a whole lot longer than you might think; 15 years. It’s an account that you can use to make a wad of cash on your earnings. So how can you actually do this?

Well, when the government first introduced ISA’s to the nation 15 years ago, they billed them as a way you can make money on your savings tax free. That’s what it still is today. You put money into your ISA account and the savings you make, based on interest rates, don’t get taxed.

It really is that simple, however there were a few caveats. Until the most recent budget, you could only put up to roughly £5,760 in per year. You also had to have cash and shares ISA options. You did have to pay some tax on your shares ISA.

However this new budget has brought some real changes. The limit of money that you can put into your ISA account has now been raised to £15,000 a year and you are now allowed to get rid of the shares option and just go with cash! So you really can make a bundle on savings!

Now we know that you can use it to make money, we need to know who is eligible to open an ISA. Well, pretty much everybody, as long as you have money to put into the account. According to the government guidelines, anyone over the age of 18 can open a cash ISA as long as they are a UK resident. You can even get a version for kids called a junior ISA.

So what does this mean for your personal finances? Well it means you can take your hard earned savings, put them into an account and if you wait a while, you can make hundreds, even thousands of pounds that you can then use to give you and your family a better quality of life.

This is why you really need an ISA, Kiran Trivedi readers. It’s a really simple way of making money, money that you can then use in any way you want. 

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The Fight against Counterfeiting: The New One Pound Coin

One of the biggest issues for the UK finance market is counterfeiting. It’s counterproductive and ultimately costs our economy millions of pounds every year. That is why the UK government is taking its fight against counterfeiting a step further with the introduction of a new one pond coin.

There tends to be this culture, Kiran Trivedi readers, of regarding counterfeiting as something that only happens in organised crime. The truth is, however, that it happens in every single city, town and village in this country and it has a direct effect on your personal finances.

 This is because if what happens when counterfeit money enters circulation. Eventually it is found out, and taken out of circulation; this means that money is being taken out of our economy, which rebounds on all of us. This is why counterfeiting can have a direct effect on your bottom line.

 The government, indeed most governments around the world, have long been dedicated to battling counterfeiting, and with certain measures have proved effective in the battle against counterfeit notes. Now it is fairly easy to spot a counterfeit note as long as you have a UV pen.

 However, the battle against counterfeit coins has been somewhat unsuccessful. There are an estimated 45 million counterfeit one pound coins in circulation. This is set to change, as in 2017 the government is planning to introduce a new counterfeit proof one pound coin.

 The coin apparently is set to be designed based on the shape of the old 3d coin (three penny) coin. This was a 12 sided coin that was in circulation between 1937 and 1971, before coinage went decimal.

 The Bank of England believes that this coin will be effective in reducing the estimated 3% of one pound coins that are counterfeit The news is even making it into the yearly budget. Chancellor George Osborne tweeted a picture of the one pound coin next to the budget box before he delivered the annual plan, saying that: "Today I will deliver a Budget for a resilient economy - starting with a resilient pound coin."

Of course, Kiran Trivedi readers, this isn’t going to affect your personal finances in the short term; however it will in the long term. As 2017 approaches, you are going to need to know how this will work, so keep your eyes open and your ear to the ground.

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Yorkshire Building Society: Were You Wrongly Charged?

Yorkshire Building Society Group has announced plans to refund customers who were wrongly charged for not keeping abreast of their mortgage payments? What are the specifics and could this affect you?

News sources up and down the country have reported that building society and lender Yorkshire Building Society Group has released plan to refund approximately 34,000 of its customers who it estimates were wrongly charged for keeping up with their monthly mortgage payments.

Legally companies are only allowed to place charges on their customers who are in two months of arrears or more, however it has emerged that thousands of customers belonging to the Yorkshire, Chelsea and Barnsley Building Societies had a charge placed onto their bill the moment they missed their first payment.

Following the leak of this news, the FCA (Financial Conduct Authority) conducted an 18 month investigation into the matter and concluded that the building societies in question had put in place procedures that were ill equipped to deal with the issue.

Subsequently this means that the three branches of the Building Society Group in question are now required to provide compensation to those customers who were affected. This means that 33,900 customers will be receiving a payment of £247.

Furthermore the Building Society Group has agreed to provide compensation to every borrower who faced a charge since January 2009, in order to make sure that everyone who deserves compensation gets it quickly.

It’s also important to note that those people who are with the Building Society Group and had accord mortgages with them are also affected; they could be in line to receive compensation.

So how will you know if this affects you, KiranTrivedi readers? Well the bank is planning to send out automated phone calls to all those entitled, so keep an ear out for the phone. If you believe that you are entitled but haven’t received a call, get in touch with them.

This teaches us something about how to handle personal finances. If you’re charged unfairly, there are rules to protect you. Don’t just sit there and take it, lodge a complaint with the FCA and get what you deserve. 

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How Can You Use the Internet to Make Money?

At this time of year personal finances can be a little tight so it’s always useful to have a little more money on hand. What better way than to raise it yourself with the internet? So how can you use the internet to make money?

It  must to clear to all  you Kiran Trivedi readers why having a little extra money will  help you with your personal finances. It’ll mean that you don’t have to budget as hard and that you’ll have a little spare cash to actually be able to spend on yourself.

However the reality is that most people don’t even know how to start making money. They think about having garage sales but they’re so outdated that it’s hard to make any real money off of them anymore. This is why you should be so glad that you have the internet.

There are so many ways that you can use the internet to make money. Why not trying selling your old stuff on EBay? All you have to do is set up an EBay account, put your items up and people will bid for them. You’d be surprised how much people will be willing to pay for your old junk.

Or why not try buying the more expensive items you need on Amazon. Amazon is retail site where you can get massive discounts on laptops, IPads, books, DVD’s and a whole host of other things. This way you can put the money you save towards your personal finances.

Another site you can try to save money is Groupon. Groupon is a site that works in partnership with retails stores, hotel chains, major brands etc. to provide deals and discounts. You never know what you are going to find there, you can discounts on everything from a Starbucks coffee to a weekend break. This way you can treat yourself for less.

It’s also important to have accounts on social media sites such as Facebook and Twitter. This is because these sites have communities on them where people share their experiences of how they’ve found great deals and cheaper products in big supermarkets such as Tesco and Morrison’s. It always pays to be informed and you never know what you might find.

The internet is a great tool that you can use to make some real money. Make sure that you use it; your personal finances will be all the better for it. 

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Are Fuel Firms Ripping you off?

MP’s have come out this month in saying that they believe that fuel firms are ripping everybody off. Naturally this caught my attention and I wanted to find out, are fuel firms really ripping us all off?

I came across the news in the BBC and with the headline ‘MPs: Cash Payers are being ‘ripped off’ by energy firms’ naturally my interest was piqued. I decided to take a closer look and was surprised when the article provided a compelling argument.

Specifically MPs have accused energy bills of fleecing customers who choose not to pay their bills by direct debit. Government figures provide stark evidence that suggests that those who pay their energy bill by cash or cheque pay an extra £114 a year.

MPs this time are being quick to act on behalf of their constituents and 200 of them have now signed a House of Commons motion requesting that the energy sector regulator Ofgem conduct an enquiry into the matter.

The BBC’s Radio Five Live spoke to Conservative backbencher Robert Halfon on the matter. He said that "Energy companies have been ripping the consumer off - have been fleecing the consumer- particularly the poor and pensioners, with their stealth tax for some time." Halfon then suggested that he would like to see a cap of £2 a month (£24 per year) on charges, similar to those used by BT.

Whether any change will be made, we don’t know yet. However we have to deal with the reality. If you are paying your energy bills by cash or cheque you could be paying up to £114 a year. This is money that could be boosting your budget in much better places. So how can you deal with it?

First off, if you can, go on direct debit. There’s a reason why it’s cheaper and there’s no point holding out and wasting money on your energy bills if you absolutely don’t have to.

However there are other ways of dealing with the issue. You can look to use your energy more efficient; turn of lights when you’re not using them, only boil the water you need etc. as you are using less energy which will lower the bill. Or you can get energy efficiency measures such as a combi-boiler installed as they also cut down the energy bill.

The energy companies may be overcharging, but until a change of policy Kiran Trivedi readers, it’s just something you’re going to have to deal with.  This doesn’t mean you should let them take you for a ride though.

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The Housing Markets Booming; What Does it Mean for You?

This month has seen the release of two separate pieces of data which highlight just how strong the UK housing market recovery has become. What does this mean for you?

Did any of you Kiran Trivedi readers try to enter the housing market during the recession? It was a nightmare; you couldn’t sell your house because prices were too low and you couldn’t buy one because banks were reluctant to approve mortgages.

However this month has seen the release of data that proves this is no longer the case, the housing market is finally recovering and this really means something for your personal finances if you are looking to enter this once risky market.

First off Nationwide released figures this month that proved that house prices increased by a rate of 0.7% in January of 2014. Furthermore nationwide reported that from the same time last year, the rate had in fact gone up 8.8%.

Specifically the building society revealed that according to its data, it measured the average UK house price at £176,491. This was based on Nationwide’s own mortgage data. Robert Gardiner, chief economist at Nationwide commented to the BBC that this indicates that house prices are returning to “more normal” levels.

This news was accompanied by a report suggesting that mortgage approval rates saw a massive leap in 2013. Data released by the Bank of England suggests that approved house purchases rose by a rate of 20%.

This means that 734,969 mortgages were approved in 2013, up from 612,654. Mark Harris, chief executive of mortgage broker SPF Private Clients weighted in on these figures, as reported by the BBC.

He said that “we expect this to continue this year as Help to Buy [government-backed mortgage scheme] gets into its stride and lending appetite remains strong, with most lenders aiming to do more lending than they did last year."

So what does this mean for your personal finances? On their own both pieces of news would have little impact. Rising house prices without the ability to pay them are useless to everyone and mortgage approval going up wouldn’t mean much if you’re still forced to sell your old home for a loss.

However together they indicate that it may be time to enter the housing market. Not only will you be able to once again make a profit on your old home, you’ll be able to use that to lock in a mortgage to buy a new one.

In this case it’s clear that everybody wins. It looks like if you’re thinking about getting into the housing market, 2014 just might be the time.

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A Deadline You Need to Take Note Of

Every so often there comes along a new government rule in finance that we all have to take note of. The latest one is that we all have to swap out our fifty pound notes.

Don’t sound the alarm just yet, Kiran Trivedi readers, it doesn’t mean all your 50 pound notes (if we’re lucky enough to have them), just the old style ones with the face of Sir John Houblon on the front. This note was first introduced into circulation in 1994.

This old style of fifty pound note is being withdrawn from circulation by the Bank of England. They will be accepted as legal tender until 30^th April this year, and then retailers and some banks, by law have the right to refuse the note after this deadline has expired.

This is actually quite a common practise when it comes to legal tender. More generally, coins after a certain amount of time in circulation and melted down and notes are burned.

It’s a system that has been put in place to prevent the money from being used illegally. Notes are usually withdrawn from circulation as a whole if they have become obsolete due to new technologies in the money industry.

The particular banknote in question is the fifty pound note depicting the face of Sir John Houblon, the Bank of England’s first ever governor. It is set to be replaced by a note featuring Matthew Boulton and James Watt.; a pair famous for manufacturing coins that are hard to counterfeit. This new note entered circulation in 2011.  

The rules are as thus. Anybody who has this note has up to 30^th April to do so. Up to this date they can have any amount they want exchanged at any bank and receive the full value in exchange. After 30^th April, the rules will change.

Some British banks, notably Barclays, NatWest, RBS, Ulster Bank and the Post Office have agreed to keep on exchanging the notes until 30^th October this year. However there will be a limit of £200 worth per transaction. After this date, only the Bank of England itself will have the authority to exchange notes; by law it always has the authority to exchange notes that are no longer legal tender.

So it goes like this. Exchange those notes as quickly as possible; to do so after 30^th April will only cause you more stress that you don’t need. 

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