Are you charged to get hold of your cash?

As if it isn't bad enough that the banks rake in millions of pounds in profit every day, a few years ago the major high street banks started charging you to withdraw cash from their ATM (Automatic Teller Machines).

Five years ago virtually all UK cash machines were free, but more than one in every three machines now charge. Overall, there are more than 50,000 ATMs in the UK, an estimated 19,000 of which charge.

Consumer groups are worried that this trend could destroy the Link network that was established to allow the public to withdraw money from any cash machine in the country for free.

A committee of MPs will tommorrow grill leading banks and companies which operate fee-charging cash machines.

At a previous meeting, consumer groups told MPs that the charges levied were "grossly disproportionate" and hit people on low incomes hardest, as these people are more likely to make smaller, more frequent withdrawals.

What can you do?

1. Use your own banks ATM machines. Whilst this isn't always easy this remains the best method of avoiding the charges.

2. Withdraw larger ammounts of money each time. This way you don't get charged as much per withdrawl.

3. Use a teller. Strange as it may sound using a teller is cheaper than using the ATM machine so if you can, step inside and get the teller to hand over some money (note not recommending you rob said bank!)

4. Keep in regular contact with your bank so that you are aware of any changes in the terms of your contract.

Until next time,

BW

Protect your pounds from Prudence

Chancellor Gordon Brown will have to raise taxes by £11bn to pay for his spending plans, the Institute for Fiscal Studies said today. With the long arm of Mr Brown stretching further and further into your purses now is the time to put your savings into the only place that is free from his prying eyes.

Step forward the ISA

The Independent Savings Account (ISA) is a a tax-free scheme designed by the government to encourage people to save money. Under the rules of the Isa one person can invest up to a maximum of £7,000 in any tax year (which run from April to April), completely free of tax.

There are three main components of offer - cash, shares and insurance - and exactly how that £7,000 is broken down is up to the individual concerned.

Maxi Isa

A maxi Isa allows investors to put the maximum £7,000 into shares if required, but it can also be broken down to allow up to £3,000 to go into cash savings and £1,000 into insurance.

Mini Isa

A mini Isa enables investors to split up their money. You can have a mini for all three parts of your Isa (either with the same provider or three different ones). The limits are £3,000 in cash, £3,000 in shares and £1,000 in insurance. But you don't have to buy three minis - you can just have the one or two if you want.

No single investor can buy both a mini and a maxi Isa in the same tax year.

Cash or shares?

Importantly, a cash Isa allows savers to put away their money to accrue interest just like it would in an ordinary bank or building society account, but with the advantage if being tax-free.

A shares Isa will invest in the stock market, so although any gains the money makes will not be taxed, the capital will also be exposed to the ups and downs associated with stocks.

Cash Isas can be a useful place to put money in order to gain interest, avoid tax and have easy access at relatively short notice. Shares Isas should, like all stock market investments, be considered a long term investment.

Until next time,

BW

Child Saving Accounts

You have children? Read on.....
The buzz word this week has been saving, particularly child saving accounts. As announced in the April 2003 budget - this week has seen the launch of the government saving incentive for parents - the Child Trust Fund or CTF. If you have missed the hype, they are going to send out checks to parents who claim Child Benefit for £250 for any child born since September 2002. This is to open a child savings account. The rules are that parents, family and friends can add to the account up to a total of £1200 per year and the government will also add to the fund when the child is 7. If the total savings allowance is invested - not even including interest earned - you're looking at over £20000 in just savings by the age of 18. At a very conservative interest rate of 3.5% - you are getting up to near £25000.
Plenty of products are flooding the market - when I get a chance to review them - I'll be adding links for you to get saving for the kids. In the meantime - get an account opened and start putting something away for when your cheque arrives - earn interest on the savings from today (although you will have to transfer when you get your cheque) !!! Check out the best buys this week, click here.
Babs

Can you afford not to save?

A recent survey by the Independent Finacial Advice Promotion (no idea who they are either but they sound important) suggested that seven out of ten UK adults cannot afford to save any more money than they currently do.

To me this seems a worrying trend, especially given the circumstances in which our current generation find ourselves. Let me explain.

Prune Juice

Now, the guy in the pic might look like a bit of a nut but he is in fact Aubrey De Gray, a genetist from Cambridge University. His recent research has led him to believe that humans can eventually live to 1,000 years of age. He explains how below:

Ageing is a physical phenomenon happening to our bodies, so at some point in the future, as medicine becomes more and more powerful, we will inevitably be able to address ageing just as effectively as we address many diseases today.

When we get these therapies, we will no longer all get frail and decrepit and dependent as we get older, and eventually succumb to the innumerable ghastly progressive diseases of old age.

We will still die, of course - from crossing the road carelessly, being bitten by snakes, catching a new flu variant etcetera - but not in the drawn-out way in which most of us die at present.

So, will this happen in time for some people alive today? Probably. Since these therapies repair accumulated damage, they are applicable to people in middle age or older who have a fair amount of that damage.

I think the first person to live to 1,000 might be 60 already.

So, before you all rush out to sell your shares in Saga lets see what this could mean to you and your future. There are two real possibilities here.

1. Firstly Mr de Grey could indeed be a few slices short of a full loaf and his prophecies of eternal youth may be misguided but the notion that we will indeed live longer in the future seems inevitable. Even if we live an extra 5-10 years on average this will need to be paid for. Are your current savings going to cover you?
2. Alternatively the venerable professor could be spot on in which case we can look forward to a population expolosion and scenes of apocolypse on a grand scale as we clamour for the remaining land on this humble rock we call home.

So, next time you're out ransacking the shops pay some thought to the future and ask whether your future self will really appreciate that gold plated loo paper?

Until next time,

BW

When not to shop

With the Christmas spending spree behind you no doubt your credit card bills are looking quite frightening. So its important that when you do your shopping now you don't fall into some of the traps the shops lay in store for you. I've done some research and come up with a few tips to stop you spending more than you intended.

1. Never Shop on an empty stomach

This first rule is quite a common one so I thought I'd test it out last weekend. Babs sent me off to the shops complete with a full English breakfast nestling in my stomach and I was like a wirling dirvish, whizzing around the aisles like Dale Winton on speed. Marvelous stuff.

The following day I descended onto Tescos without so much as a slice of bread to send me on my way. Without being too melodramatic, it was torture. These guys know what they're doing alright, sending that wonderful fresh bread smell wafting throughout the store. I came back with cakes and muffins galore. She was not impressed!

I left the shop feeling quite ashamed at my lack of will power, as though I'd some inoperable character flaw, but having done some research into this sort of thing some of the tricks the supermarkets employ to trap poor saps like myself is downright dirty. I've mentioned the principal trick to galvanise the stomach but there are many more to massage the mind. Hence the next tip is:

2. Never Shop with an empty head

This one is especially import as you need to keep your wits about you. Enter any store at this time of year and your senses will be barraged. The warm gust of air as you enter the store, the bright lights, the smells and the sounds all exist to send you into a spin. Supermarkets will put so called 'distress goods' at the entrance, such as newspapers and cigarettes. Fashion shops promote this seasons new look.

Once past the entrance you'll be in the most expensive part of the shop. Shops often use a technique called triangular balance in this area. It works on the simple premise that you look at the middle of a display first. Hence the most expensive items are always displayed in the middle. Be aware of this technique and you can find plenty of bargains.

Likewise in a supermarket the high profit items will be placed at eye level as this is where most people naturally look. If you want a bargain look around but don't buy on impulse as you'll be buying exactly what they want you to buy.

The end of aisles are also used to sell high profit products and shops are designed so you pass as many 'end aisles' as possible. Be wary of products here and don't fall into the stores trap.

Another sneaky trick used in electrical stores is with the pricing. Most prices end in .99p but some will end in .95p or .98p. This is code for the staff to know which items are nearing the end of season. If you ask for assistance no doubt these will be the items the loyal staff will 'recommend'.

A final tip often used by supermarkets is to place the bread and milk at the back of the shop, thus you have to walk past the high profit items, such as clothes and electricals, to get there.

Hopefully these clues will help you when you next go shopping.

And the key to shopping safely?

Don't go when you're hungry and keep your wits about you!

Until next time.

BW

Tax doesn't have to be taxing

With the income tax deadline fast approaching and the government rolling out its slightly patronising adverts I thought I'd have a look at the taxation system and the means the government uses of collecting its dues from us.

Whilst we've been promised a lean, mean taxing machine come April, in the form of a streamlined 4 page self assessment form, this year continues to put the majority of us through the torture of the 12 page behemoth.

If you're reading this and havn't filled in your form yet you better get your skates on. Last year £400 million was 'donated' to the treasury in fines for late submission.

If the Revenue has not received your return, and the tax that you owe, by midnight on January 31, you are subject to an automatic £100 penalty. If you have not paid your tax by the end of February, you are subject to a 5 per cent surcharge on the tax outstanding, while those who have still not paid their tax by the end of July face a second 5 per cent surcharge, plus another £100 penalty. All the while, interest is accruing on the tax due. For persistent late payers, the Revenue reserves the particularly nasty £60-a-day penalty.

With these threats hanging over you now is the time to get your forms filled in.

How can you fill in your self assessment forms?

You can fill in your self assessment form either online or via paper form. If you want to do it online then you need to register pretty sharpish. The inland revenue will then send you a pin number in the post (and you know how long that can take!). If you go down this route however it is worth it as the online forms calculate things for you, making the process significantly easier.

If you want to fill the forms in manually they can be downloaded from the inland revenue website or you can call their orderline at 0845 9000 404 and get them sent to you.

Filling in your self assessment form

Now to the arduous task of filling in the blasted thing. Start with the supplementary pages, which are coded by colour — for example, red for land and property, pink for employment. Next, go to the main part of the return and start making calculations.

If you're a clod like me I'd suggest you fill them in with pencil first, just to be on the safe side. Make sure that you include only information that is relevant to the tax year at hand — now April 6, 2003 to April 5, 2004 — and do not include non-taxable income, such as interest payments from Isas.

Don't worry too much if you're form remains largely empty. Employees generally have to fill in around 40 boxes. The self-employed fill in around 80 by comparison.

Help is at hand

If you're having a hard time filling it in (and no one will blame you!!) then the inland revenue provide a help line for you. If you want to call one of the charming revenue staff you can find your local branch via the revenue website. Remember you are only to use this information for help with your tax form and are not to throw eggs at the blighters.

If you find that after your calculations you're going to be a bit short then the revenue recommend you call them and they will treat your case on its individual merits. Either that or burn you at the stake.

Good luck and god speed

BW

Use Internet banking to make the banks work for you

For decades the banks have been allowed to give you shamefully low rates of interest. You put your life savings with a bank, for them to invest and make their record profits, and get interest rates in the region of 0.1% per year in return.

With inflation in the UK of between 1 and 2% your money is actually going down in value by over 1% a year, just because you're with a bank paying such poor rates of interest!

Internet banking to the rescue

Riding in on its white horse is the saviour of us all - the Internet bank. Internet banking was started sometime last century by the sillily named Egg. They promised to give you a better interest rate on your savings because they didn't have the costs associated with running a high street branch.

Now there are oodles of banks offering services over the Internet. Most of the Internet bank accounts available pay competitive interest rates, so you don't lose out to inflation and your money can actually gain in value, a bargain I think you'll agree.

Alliance & Leicester are paying new customers a whopping 5.5% interest on their current account. This rate is guaranteed until December 2005 so you can make a tidy sum. You even get £20 from the good folk at A&L to spend at your discretion.

The catch (has to be a catch doesn't there - grrr) is that this rate is only valid for the first £2,500 in your account. Every penny over £2,500 is only given 0.1% interest - miserly buggers.

The other catch (this ones not such a biggie) is that you have to be 21 or over and (ok two catches) you have to pay in £1,000 a month. This shouldn't be to big a problem, you simply pay in your salary each week/month and bobs your uncle.

If these catches catch you out then you will enjoy our nifty little current account table. The table provides you with a list of the latest current accounts, together with the interest rates paid and a few other important bits and bobs.

So now is the time to stop dallying. Stop the big highstreet banks coining in record profits of several million pounds a day and start making them give you a fair return for your money. If we catch you stuffing your fivers in the mattress Babs and I will be around to give you a preverbial kick up the bum!

BW

HSBC January Sale

Hi
I noticed this while cruising the net this afternoon and thought it quite ingenious. The HSBC bank are having a January sale on products!!

In the sale they have included a range of products including the HSBC online current account which offers 14.8% standard APR and a Free Overdraft for 9 months!! and the HSBC personal loan featuring rates cut by 20% - borrow £10,000 to £25,000, from 7.1% to 7.9%.

See for yourself click here for the loan deal and for the current account click here, worth a look from the 'Worlds Local Bank'.

Who are HSBC?
Headquartered in London, HSBC is one of the largest banking and financial services organisations in the world. HSBC's international network comprises about 10,000 offices in 76 countries and territories in Europe, the Asia-Pacific region, the Americas, the Middle East and Africa. Through an international network linked by advanced technology, including a rapidly growing e-commerce capability, HSBC provides a comprehensive range of financial services: personal financial services; commercial banking; corporate, investment banking and markets; private banking; and other activities.

Babs

The Climate Change Premium

This winter has seen the effects of climate change upon our lives grow ever stronger. On boxing day a tsunami struck with devestating force on South Asia. In the past few days heavy rainfall has caused floods across much of Great Britain.

The insurance industry is bearing the brunt of these events and is placing the risk of their occurence squarly on the shoulders of you, the premium holder. In 2003 Munich Re, a German based company that insures insurers put the combined cost to the industry of global warming related disasters at $60 billion.

Swiss Re, another re-insurer warned last year that the costs of natural disasters, aggravated by global warming, threatened to spiral out of control, forcing the human race into a catastrophe of its own making.

Perhaps even more alarming is that, on average, just 25% of Britons has contents insurance to cover them against such events as flooding and storms. Most buildings insurance plans don't cover any loss of posessions so as much as 6 million homes are at risk. Are you one of them?

So this is serious business. What does it mean to you and your premiums?

The Environment Agency is working with the Association of British Insurers (ABI) to make sure that the insurance industry continues to provide cover for you, even if you live in an area with a risk of flooding. This seems only fair, especially as recent reports suggest that it will be harder to not live in a flood risk area within a decade!

Whilst the Environment Agency has no role in determining insurance cover they are providing the latest information to the ABI so they can assess the real danger of flooding for your property.

They have developed the following document to help answer your questions on what the recent floods can mean to you and your premiums:

Finance Choices Guide

Can you afford to be without contents insurance?

Latest figures suggest that 5 million people and 2 million properties live in risk of flooding in the UK. The Environment Agency Website allows you to check your risk by entering your postcode.

If you live in a high risk area then you might find useful our guide to the best providers of contents insurance.

Until next time,

BW

Welcome to Finance Choices

We are Barbara Gordon and Bruce Wayne and we have started Finance Choices to try and help decipher the confusing world of finance.

For years we have struggled to understand the jargon used by the financial industry so we thought it about time we did something about that.

Hence Finance Choices was born. We will write a daily article on financial matters:

- Mondays will be our opinion on the latest financial stories (written by Bruce)
- Tuesdays I'll review interesting or funky new products and financial services
- Wednesdays will be a guide to the best buys in finance, including an update of movers in interest rates and deals. (written by me)
- Thursdays Bruce will provide you with some great money saving tips
- Fridays I will review some of the financial service providers

We hope it will be as much fun for you as it will be for us.

Babs and Bruce
xx