Where to put Your Money Besides a Savings Account

Filed in Debt | Personal Finance Leave a comment

Savings accounts continue to offer low rates of interest, leaving many people wondering whether they are even worth bothering with. Ever since the current low-interest environment bit, savers have been looking at alternative ways to get more from their money. Things may be on the way up, but even headline-making best-buy accounts are only offering a couple of percent.

While savings accounts are pretty much unbeatable when it comes to keeping your money secure, there are some alternatives you might want to consider, whether you have a lot or a little to put aside.

Extra Mortgage or Loan Repayments

This might not seem like the most attractive choice at first, because it means giving up all access to the money you put aside. However, it will usually leave you better off overall than putting your money into savings. Think of your finances like a balance sheet. On one side you have money and assets in your possession, on the other side you have debts. Subtract debts from what you have to get your net worth. Both debts and savings grow over time due to interest rates, and your debts probably grow faster because interest rates are almost certainly higher. By removing a chunk of debt instead of adding a chunk of savings, you are having the same initial effect on your overall “worth,” and having a bigger impact over time because it will reduce the growth of those debts and lead them to be paid off sooner. Even paying a little extra can make a big difference if done regularly over time. Of course, you should still only consider this if you are sure you won’t need that money in the future.

Peer-to-Peer (P2P) Lending

Those with a lot of money are investing in properties to get more out of their money, and those who are clued up on the stock market or have access to professional advice (these also tend to be those with a lot to save) might turn to stocks. Peer-to-peer (P2P) lending, which sees you provide money for a person or business who wants to take out a loan, is another investment option, but this time it is equally open and equally useful for those with small savings and those with large amounts. While all investments carry risks and this is what rightly puts off those who could afford to invest but can’t afford to lose, P2P is very much one of the safer options. It has been rated as not much more risky than a bank, and many of the online platforms offering this service have been designed to make the experience as close as possible to managing a traditional savings account. Various fixed terms are available from a few months to a few years, and the interest rates far exceed anything the banks are offering.

, , , , , ,

Easy Everyday Cost-Cutting Tactics

Filed in Personal Finance Leave a comment

No matter how much you cut costs, there will obviously always be plenty of things that you need to buy. There are also times when it is worth spending more for better-quality, and times when you just want to treat yourself because you can afford it and feel you deserve it.

There is nothing wrong with any of these expenses, but it’s nice to keep their total cost down as far as possible. In particular, it’s nice when you can get exactly what you need (or what you were paying for anyway), but pay noticeably less than you were expecting to.

Cashback Websites

Some time ago now, “affiliate schemes” started to catch on among online retailers. Through these schemes, if another website (the affiliate) sends customers their way and those customers make a purchase, the affiliate gets a cut of the money. The idea is simply to gain more customers.

Cashback websites take advantage of these schemes, splitting their commission with you or even giving it all to you and relying on ad revenue. That way, you get to save money while shopping with major online retailers, just by using the cashback website’s affiliate link instead of heading directly to the store you want to buy from. Savings on most day-to-day purchases will be pennies or a couple of pounds (which can still mount up over time), but on big things like car insurance and broadband contracts the savings can be big.

Switching Suppliers

Regularly switching suppliers of energy, phone/broadband, insurance and so on has become one of the most oft-quoted pieces of money-saving advice. There is extremely good reason for this, because savings can be massive. For example, it recently emerged that a very large percentage of customers are overpaying for energy, mainly by around £160-£235 a year, simply through failing to switch.

In particular, make sure you don’t switch once and then become complacent, pleased with yourself for finding the best deal. Prices often go up as soon as a contract runs out, and even if the cost is going to stay the same markets are constantly changing and the best deals are almost inevitably those for new customers. As a rule, you should start looking for a new provider as soon as the contract with your old one runs out if you want to be sure you are getting the best deal. There are a couple of considerations to make besides price, however. Make sure you are being quoted for a like-for-like service, or the quotes may simply not be comparable. It could also be worth checking out independent reviews to make sure the company won’t provide substandard service.

, , , , ,

Get the Most From a New Credit Card

Filed in Business | Debt | Personal Finance Leave a comment

Taking out a new credit card requires careful decision-making. It is important to choose the right card, and find the best deal for which you are eligible and the most appropriate for your circumstances. However, by looking beyond the card itself, it is possible to get a little bit more out of applying for a card.

Rewards

Many credit cards come with rewards, gifts, and incentives. With rewards cards, you may be offered a cashback deal on money spent with the card, a free welcome gift such as a gift card for a major retailer, or reward points towards a retailer loyalty scheme. Even if you have found a card that seems perfect quite quickly and easily, it is worth seeing if another provider can offer similar terms along with a reward. That way, you still get a card that suits your needs, but you get something extra as well.

Cashback Sites

Even if the card that suits you best is not a reward card, it may be possible to get something extra from taking it out. You just have to go through a third party instead of directly to the provider. Cashback websites offer you cashback on online shopping and on certain other things like signing up for accounts with some websites. A number of credit card providers are also accessible through cashback sites. Basically, the cashback site gets a commission from the lender for bringing them your custom, and they then pass on cash to you. In the case of credit cards, you make your application for the card in exactly the same way as usual, except you first go through the cashback site. If your application is approved, you get paid money.

Striking a Balance

The only drawback to these rewards is that it is surprisingly easy to get drawn into a card that is less appropriate for your needs, and this can wipe out the benefits of the extras on offer and leave you worse off. It is easy to think that a monthly fee or a higher interest rate will still leave you in profit because of a cashback deal, only to find out the hard way that the two sums don’t match up in quite the way you thought. By either choosing a reward card or signing up for the same card through a cashback site it is likely you will be better off, but make sure to think carefully before switching to a card that is different from what you originally planned.

, , , , , ,

How to Maximise Pension Income

Filed in Personal Finance Leave a comment

There are a number of different types of pension schemes available to you; however they are commonly seen in the use of three main schemes. These are called ‘Occupational pensions’ (otherwise known as company pensions), ‘Personal pensions’ and lastly ‘Stakeholder pensions’.

Types of Pensions

An Occupational pension lets you save for your retirement through the use of your employer. To put it simply, each pay day, the pension scheme automatically puts a percentage slice of your earnings into that pension scheme. In addition to this, the government will also be putting extra money into your occupational pension for you. The money that you receive from your pension scheme is your source of income to live on once you retire. However, if you would prefer, an Occupational pension scheme can also be used as a way of taking out a lump sum once you retire, which is actually given to you tax free.

Another pension that is available to use is a Personal pension. Personal pensions are best suited for those who are either out of employment or in self-employment. Additionally, this type of pension scheme can be used when you are employed but ineligible for an automatic enrolment into an occupational pension. A personal pension works through making payments into your pension fund on a regular basis. When you retire, you are funded from your pension through the use of your investments into stocks and shares.  By doing this, you aim to increase your money through the correct use of investments and shares. The main drawback of these types of schemes is that you don’t actually know the amount of money you have in there once you retire; it is all based on how well your investments have done. If you have invested badly, then you could face having a pension which is nowhere near the value of what you expected.

Finally, you’ve got stakeholder pensions. This type of pension is a lot like a personal pension, only this comes with no added deadlines and no extra costs if you miss any payments into your Stakeholder scheme. If you need flexibility regarding your pension, then likelihood is a stakeholder pension would probably be best for you. As mentioned there are no penalties or charges for missing payments and you can even switch to another pension scheme without incurring any charges.

Pension Credit Payments

Pension credit is a type of income-related benefit that is paid directly into your account on top of your current pension. Unlike many other sources of income; those entitled do not pay any tax on the benefit. Typically there are two types of pension credit; guarantee credit and savings credit. Guarantee credit ensures that your income is topped up to a minimum level (currently £145.40 for individuals and £222.05 for couples). Savings credit is designed for those who have a small amount of savings or an income that is higher than the basic state pension. As a pensioner, you may not receive notification that you are eligible for pension credit meaning it is your job to use one of the pension credit calculators and check your eligibility.

ISAs

One option that’s growing in popularity amongst retirement savers is ISAs. Many choose to pay into them as opposed to a pension fund due to their ease of access, simplicity and flexibility. They work on the basis that if you need cash you can get it, if you want to put money in; you can.

One way of benefiting from the flexibility of ISAs and the tax relief of pension schemes is to spread your savings. This means that (if needed) you have access to the necessary funds from the ISA and are also getting the tax benefits from your pension scheme.

Saving Money as a Pensioner

Despite the various negatives, there are in fact a number of financial advantages to being a pensioner – not least the money saving opportunities available to you.

In the leisure industry, ticket prices for pensioners regarding things such as the theatre and cinema are cut down sometimes to as much as 20%, meaning that a weekly movie watch can actually seem affordable. Additionally, memberships for the elderly in terms of the gym or other health spa facilities are equally discounted.

Along with the leisure industry, the travel sector for pensioners also has its bonuses. Once you become a pensioner, public travel is suddenly a far better alternative than driving your car. When you turn over the age of 60, you are entitled to a free bus pass; free travel when and wherever. However, if you are not a fan of bus travel, again once you turn 60 you can apply for a senior rail pass, which gives you a third off all rail fares. The same even applies for some airlines, giving senior people ticket discounts, therefore even making your flights more cost friendly.

Finally, the health sector can be an enormous price plus for pensioners. If you are one of the many over 60’s that needs to wear glasses, then not only are you for major discounts on lenses, but with your pensioner status you are even entitled to free eye tests. Along with free eye tests, you are also eligible for free prescriptions. However, the main positive that you would receive from the health sector as a pensioner is income support for you or your partner if you fall ill. This would cover the cost of travel to and from hospital with a little extra, to make the process that much easier.

 

This article has been written by Jason Scott on behalf of UK Credit Limited. For more top finance guides visit their blog at www.guarantorloansonline.co.uk/Blog.

, , , , , ,

Effective Tips When Haggling With Lenders

Filed in Personal Finance Leave a comment

Haggling is the most effective way to at least reduce the rates of your mortgage or loan from a lender. However, a borrower needs to know a few things to ensure that they are haggling at the “right moment”. Timing, facts and research is very important when it comes to haggling with lenders and here are a few other things you should remember.

1. Credit Scores

Nothing says your authority to haggle other than your credit scores, especially if you have a score that’s over 630 and reaching 680. Most lenders will provide you with additional payment protection benefits, but if you can, you can have your rates lowered instead of having the added payment protection. Work on your credit scores first before you decide to haggle.

2. Shopping Around

You understand that your lender is not the only lender that’s around in your area. You can meet with other brokers and ask them about the rates of their respective lenders. Having at least three or four rates on hand, you can compare them and see one that has potential to lower their rates. You can use these as ammunition for your lenders.

3. Arguments

Engage with an argument with your lender regarding the rates they offer you. Allow them to explain first why they have such rates before rebutting their argument. You can tell them that other lenders have lower rates for the same kind of mortgage or financing for the same item you identified.

4. Compromise

If your lender agrees conditionally to lower the rates for a certain detail to be removed, try to see if you need what they have to take away from the deal. For example, if you believe that you could forego two “goodwill” adjustments that they offer with the standard rates, then have a go at it. Assess first which ones you need and which ones could you live without.

Recent Posts:

Deciding on Getting an Instant Cash Loan

Debt Relief: Declaring Personal Bankruptcy

Day Trading: The Essentials You Need to Know

, , , , , , ,

TOP