Moneyfacts.co.uk

When is 20 pence not 20 pence?

RichardE — Fri, 03 Jul 2009 13:36:00 GMT

The humble 20 pence piece hit the big time this week when it was unexpectedly upgraded from the loose change box under the bed to the most studied and sought after coin in the realm.

Caption: Martha was ready to hit the shops with her 20p pocket money

It would appear that the Royal Mint has made a blunder by striking a batch of 20 pence coins minus the year of issue (2008). The exact number that slipped through the net is not certain – which is odd to say the least, unless of course this is a form of quantitative easing via the back door?

Estimates suggest around 100,000 coins were struck and bearing in mind the UK population is around 66 million, the chances of getting one are slim – but some lucky people are sure to be pleasantly surprised.

What do you do with a coin if you find one? You could of course offer it back to the Royal Mint, who is hoping a £50 enticement will suffice – or you could visit an auction site or specialist coin collecting market, or alternatively you could keep it, very safe and hope that the value increases over a number of years.

Bearing in mind the last time this sort of thing happened was 1672 and that it is unlikely to happen again for many years, if at all, one of these coins could become a wonderful little nest egg.

Which begs the question, what will the Royal Mint do with any it buys back? Will it destroy them, or will it be boxing them and reselling them to excited and numerous coin collectors worldwide

Richard Eagling is Editor of Investment Life & Pensions Moneyfacts

Time to wise up

LeeT — Fri, 26 Jun 2009 10:49:00 GMT

Unless you’re one of the lucky ones, the retirement you face may be anything but the one you imagined and deserved.

Image: Ollie realised that there was little point getting older and not getting wiser

With things only set to get worse as we move forward what can you do to improve your financial returns in retirement?

More potential retirees will be working longer than originally planned but delaying retirement doesn't have to be as disastrous as it seems. By working longer and putting off taking benefits from your pension, it should provide a higher level of income when you eventually start drawing it. What's more, if you continue to pay contributions into your pension fund during these extra working years, you could significantly boost the value of your scheme.

If like many your pension is heavily invested in the stock market, its value has probably dropped off significantly. Although no one knows what's going to happen to share prices in the future most experts believe that they will begin to climb; a strong argument for delaying retirement to allow the value of your pension to recover.

The annuity option is also taken by many in retirement, with the annuity rates paid obviously higher for older people to compensate for paying out income over a shorter period. As well as your age, annuity rates are also based on prevailing interest rates and the yields on gilts and corporate bonds. As we could be in for a period of higher inflation and interest rates, holding off before buying an annuity may be to your advantage if annuity rates rise.

It makes sense to think about deferring your basic state pension too. You can take the missed income as a cash lump sum (plus interest of at least 2% above the base rate), or as a higher weekly income later on which is based on how long you wait before claiming your pension.

Pensioners are entitled to a range of financial assistance, from certain tax allowances and welfare benefits, to energy costs, all of which are not being claimed by enough people. Those not expecting a full basic State Pension are able to improve their State Pension by paying up to six years of voluntary National Insurance contributions for years going back to 1975. Consideration can also be given to an equity release mortgage, which can boost incomes. Although it will also eat into the inheritance you can leave to your children, Are there any measures that could be introduced to alleviate the pension crisis? Perhaps unspent pension pots could be left to any heirs on the proviso that the pot could only be used to fund a pension, at least that way retirement provision would be continually improved, with both personal and public finances benefiting.

The choice for many is clear; retire and have very little money and a glum existence, or work part-time and have a better lifestyle. As the gap between public and private sector provision grows, a form of pension apartheid is upon us. Things will remain tough for pensioners for a while to come, but hopefully I have shown there are ways to combat this. If MPs and Sir Fred Goodwin can both bow to pressure and relax their pension demands anything is possible!

Lee Tillcock, Editor of Moneyfacts.

Personal finance shouldn’t be extracurricular

JamesH — Tue, 23 Jun 2009 12:49:00 GMT

Last week, the Citizens Advice Bureau (CAB) announced that more than 62,000 people declared themselves bankrupt last year, an increase of almost 10,000 compared to 2005.

Image: Jack had to take it upon himself to brush up on his personal finance skills

While those figures are representative of all age groups, the body says that the increase is likely to be at least in part to people aged 30 and under relying on credit cards, loans and store cards to fund extravagant lifestyles.

The scale of the problem certainly seems to be worsening; the CAB says it is getting increasingly worried about the number of young people that are going to them for help with the debts they have built up. Over 50,000 under 25s visited a CAB centre in England and Wales in 2008 and 2009, while further research found that a staggering quarter of 16 to 24 year olds have suffered mental health issues because of the state of their finances.

The reasons cited for this worrying trend are depressingly familiar. Young women are racking up debt like it’s going out of fashion because, ironically, they just have to be bang on trend – if Coleen or Cheryl has it, so must they. Young men seem to be no better; never mind that the car, bike or gadget is inordinately unaffordable, the attitude for some has become buy now, pay later. The reality, however, is that they will never be able to pay, instead falling into bankruptcy.

There are programmes out there that help young people who find themselves in this situation, and they should be applauded. But isn’t it about time that more emphasis was put on educating people from a young age on the pitfalls of frivolous spending? Should they not be taught that heavy debt puts a significant burden on both their financial and social wellbeing? Surely by teaching children in first and secondary schools about sound financial choices and the pitfalls of debt, the number of young people being declared bankrupt in years to come has more chance of falling.

At present, the national curriculum encompasses a personal, social, health and economic education module, with one of the aims being to provide students with financial capability. Now, forgetting the fact that the financial aspect takes up just a quarter of the programme, it is actually considered a non-statutory module of study at all four key stages. A child could quite conceivably go through their entire school life without being taught so much as how to use a debit card.

Are subjects such as design and technology and citizenship really considered to be more important than personal finance? And if so, why? Pupils leaving school and entering the world of work or further education should have at least some idea of personal banking, income tax, how to budget effectively, how to service small levels of debt effectively and so on. By the same token, the long-term effects of building up unmanageable debt levels and ultimately, bankruptcy, should be made crystal clear. Making personal finance a statutory part of the national curriculum is the only way this could conceivably be done effectively.

At a time when poor credit history means that your chances of securing anything from a mortgage right down to a phone contract will be hindered for years to come, we are doing the younger generation a disservice by letting them walk blindly into a world of debt.

James Henderson, Reporter, Moneyfacts Group

Time to take cover

RichardE — Fri, 19 Jun 2009 09:32:00 GMT

Cristiano Ronaldo may be worth £80 million in the eyes of Real Madrid, but the average Dad is worth around £23,000 a year to a British family in terms of the work they do around the home.

Image: Charlie pondered the need to protect the family whilst making their favourite meal

Legal & General’s “Value of a Dad” survey has highlighted the significant, and often overlooked, cost of replacing the domestic chores carried out by doting Dads. According to the research men spend 53 hours a week on household work and childcare. Almost half of this time (21.5 hours) is spent on looking after the kids, 9.5 hours on housekeeping, 7.5 hours on cleaning and 6 hours on cooking.

Yet, despite the huge contribution that Dads are making to the running of the household they are in serious danger of undoing all their hard work by neglecting one key responsibility: protecting their loved ones in the event of their death or serious illness.

Just 63% of Dads have life insurance in place, 33% have critical illness cover and 27% have income protection. Family income benefit, which pays out a regular tax-free payment in the event of death, is the least popular form of protection of all, with just 23% of Dads holding this type of policy.

This low protection uptake is particularly disappointing given the fact that many products are now offering better value for money than ever before. For instance, whilst motor insurance premiums have doubled over the last 12 years, life insurance premiums have dropped by a massive 40%.

The average premium for a 35 year old male non-smoker taking out £100,000 of level term assurance is just £10.28 per month, equivalent to around 35 pence a day. For many people the cost of purchasing life insurance should no longer be a valid excuse. At the very least you should have enough life insurance to cover any outstanding debts such as your mortgage or personal loans.

Many insurers will also allow you to add critical illness cover to your life insurance which will pay out a lump sum on the diagnosis of certain specified illnesses. The number of illnesses covered has continued to increase and in some cases insurers will automatically include cover for your children at no additional cost.

Father’s Day provides us with an opportunity to show our appreciation for all the hard work that Dads do. But it should also serve as a powerful reminder of the need for Dads to protect their family against financial hardship. The value of a Dad around the house may be £23,000 but the peace of mind of knowing that adequate protection is in place is priceless. Take a look at our life insurance best buys to check the latest rates on offer.

Richard Eagling is Editor of Investment Life & Pensions Moneyfacts

Cash in the attic?

TimL — Tue, 16 Jun 2009 09:57:00 GMT

Unless you’ve been on Mars, you’ll know property values have slumped over the last 18 months or so and as a result the housing market virtually ground to a halt in that time too.

Image: Dennis was desperate to move to a bigger kennel, but nobody wanted his old one

So in a buyers market such as now, sellers itching to move are desperate to make their property the one that stands out from the crowd.

However, a quick hoover around and making sure the pots and pans are washed up is unlikely to cut the mustard when buyers are in the box seat.

Fortunately, a new report from Nationwide has revealed the things about your home that could make a difference when a prospective purchaser turns up on your doorstep.

Certain characteristics are likely to make a home relatively more attractive and increase its value to boot; equally, there are a few things that can lop a few pounds off its price too.

Top of the list, unsurprisingly, remains location, although unless you live in a caravan, it’s unlikely you’ll be able to do much to alter it.

More feasible to most is extending your home, with a 10% increase in floor space thought to add almost 5% to the value of a typical house.

What is more, the larger the property, the more people are willing to pay for extra room, with a similar size increase in the floor space of a detached house adding almost 7% to its price.

Add a decent sized bedroom to your property and not only is it likely to increase your home’s desirability, but on average it can add around 11% to its price too.

In a similar vein, getting DIY SOS to pop round and convert your loft to create an extra bedroom and bathroom can add up to 20% in value.

Likely to be cheaper, and certainly less intrusive than having a TV crew in your living room, would be to install central heating. Considered now to be the norm, homes without it are often sold at a price around 9% lower compared with an otherwise identical property. Meanwhile, rising energy costs and a nation’s increasingly green conscience has seen double glazing alongside cavity wall and loft insulation become an ever more sellable feature of a property. So if you’re one of the many waiting for the housing market to wake from its slumber, there’s probably never been a better time to dust down the toolkit and find out if DIY really is as simple as Handy Andy will have us all believe

Tim Leonard, Senior Reporter, Moneyfacts Group

Not everything out of the back of a van is bad!

SylviaW — Thu, 11 Jun 2009 14:23:00 GMT

Yet more names are about to be lost from the high street, Santander is removing familiar names such as Abbey, Alliance & Leicester and Bradford & Bingley and replacing them with the name of a town in Spain called - Santander.

Left: Oliver and his friends were sure the new mobile bank stopped near here

Whilst at the other end of the spectrum, Norwich Union, a financial giant named after the city of its inception has changed its name to Aviva?? Lloyds has announced the Cheltenham & Gloucester will no longer have a presence on the high street and of course there is the long running saga of the Post Office and its village branch closures.

But a recent advertising campaign has caught my eye which seems to buck this trend of change or closure. NatWest is promoting banking that drives to your village high street and serves you from the back of a van. What a fantastic idea. It has all the hallmarks of times gone by: personal service, regular service, and I bet that if there is a queue, it is friendly and orderly, none of the foot tapping, sighing, watch checking impatience that many bank queues produce.

But can it stand the test of time? I remember as a child, all sorts of vans selling wares to the housewife; veg, bread, pop, books, fish & chips, but these days, you hardly see a milk float, so is it time to be launching van-banking, and will it ever be able to compete with internet banking?

Sadly, I think not, the truth is whilst it is nice to have a branch to pop into and talk to a real person, even better to have them drive up to see you, there is an amount of inconvenience involved on the part of the customer. You have to make the trip or you have to be available at a set time – unlike online banking. Some people may say it’s impersonal, but I don’t know many people who are happy to tell strangers their financial affairs. In fact having worked in a bank, I can say quite honestly, some people are more likely to tell you of their marital affairs than their financial ones, so impersonal may not be such an issue.

The beauty of high street banking is familiarity: take that away and what have you got left? Being a creature of habit, the benefit of online banking for me is that it is impersonal, and therefore least likely to change. There is also the added benefit that I can imagine the online bank to be staffed with people the same age as me, with the same life experiences, an illusion easily shattered by the reality of walking into a bank, regardless of its name or if it has wheels or not.

The price is right

LeeT — Mon, 08 Jun 2009 08:20:00 GMT

When not discussing the health of Susan Boyle, last night’s winner of the Apprentice, or the dubious virtues of the new Big Brother contestants, the current state of the housing market remains the primary topic of debate throughout households across the country.

Above: Percy knew that it would take more than the smell of fresh coffee and baking bread to sell his home

With reports stating that public confidence in the housing market is slowly building and poor buyer sentiment is receding, house prices remain close to long term affordability, and interest rates are likely to remain low for the foreseeable future, how can we provide impetus to help the market?

My recent forays into the property market have provided me with a personal insight into its various machinations. Whilst my qualification wasn’t gained in economics, I do profess to having gained a degree of common sense that qualifies me to suggest a few ideas to keep the buying and selling process moving.

As a very basic summary of the property market over the past six months, there have been quite a lot of sellers, a large number of interested buyers, but very few sales taking place. The tightening of lending criteria has obviously played a huge part in this, and a change in the general attitude of buyers and sellers is required to boost sales.

Trying to attain the perfect deal causes stresses and frustrations. As a general rule of thumb, irrespective of whether you are the vendor or the purchaser, always remember that you won't get the best price on your property deal. It is almost inevitable that you will not buy at the bottom of the market, or sell at the top of the market. We cannot all get the best price.

Sellers who simply cannot wait for prices to rise again must reduce their prices to a level at which they think their property will actually sell. Buyers will still try to haggle, but because the house is priced correctly, vendors should stand their ground as prospective buyers will continue to call. There is of course the danger that agents are under-pricing your home for a quick sale. Again, trust your own judgement.

Confidence and the power of perception play a large part in dictating the direction house prices move. Buyers waiting for the bottom of the market are playing a risky game as once a consensus is reached, buyers will rush in once more. Far better to consider making a best guess on the eventual market bottom and start making offers based around that figure.

A realistic and competitively priced house will help everybody involved in any individual sale and purchase, as well the market in general. The likelihood of having a mortgage approved increases if the asking price is slightly lower and more reasonable; lenders are well aware how inflated some house prices are.

Whilst the points raised are achievable they do require a change in human nature, as those involved in the housing market must be satisfied simply to do better than average, and get something of a bargain. Satisfaction will keep the market moving but provide disappointment for those expecting to get much more from the get-rich-quick property game. If the natural urge always to bag the best possible deal can be controlled, then the one good thing to come out of the recession will be an end to house price mania, and the start of a healthier relationship towards property

Lee Tillcock, Editor of Moneyfacts

Feeling let down…?

JamesH — Tue, 02 Jun 2009 15:53:00 GMT

While house prices have declined markedly over the past 18 months, they have still yet to reach an affordable level, for low earners or single households in particular.

Above: Olive the orangutan was perplexed at the price of her credit check

With the median wage (the amount which 50 per cent of people are adjudged to earn more and 50 per cent less) recently estimated to be £20,000, where does that leave those of us without partners or low earning couples who don’t fancy their first step on the property ladder resembling a squat?

The answer is probably the rental market and all the joys it brings, namely the inflated charges that tenants are obliged to pay out to letting agents. The Citizen’s Advice Bureau (CAB) shed some well overdue light on this practice recently, highlighting the need for change and regulation.

Entitled ‘Let down’ the report detailed how 94 per cent of letting agents in the UK impose additional charges to customers. This discounts tenancy deposits and rents, with some adding up to seven additional fees for various duties. These include: a deposit administration fee, a reference check charge, an administration fee, a check-in inventory charge, a check out inventory charge, a tenancy renewal fee and a non-refundable holding deposit.

A reference check charge? If that’s any more than the cost of a stamp or a phone call to confirm the supplied details then something is clearly not right there either. It continues; a check-in and check-out inventory charge? I must have missed the point when letting agents began to mistake themselves for airport terminal staff.

Joking aside (the woman with two children in the report who paid out over £800 in fees, only to get nothing in return, certainly won’t be laughing), the CAB is dead right to ask Government to expand its recently announced plans to include a ban on these additional charges that have been labelled as simply the routine business of letting an managing property.

Fees charged for credit checks are also an issue that have to be addressed. If consumers are being charged anything from £10 to £275 for this service (non-refundable whatever the outcome, of course) then decisive action is needed. How about a system whereby a consumer can buy an up to date, personal credit report from a trusted source which is forwarded on to the relevant letting agent? Not ideal perhaps, but some real dialogue is needed to help would-be renters out.

Nobody is looking for a free ride; people realise that the process of securing a rental property is costly. Damage deposits, rent in advance and the like are fair game and expected. What isn’t on or right are hyper inflated charges for services that should be part of the service. For that reason, we should support the calls from the CAB for tighter regulation – let’s hope the Government is listening.

James Henderson, Reporter, Moneyfacts Group

Should you fix it? You might be nuts not to….

TimL — Wed, 27 May 2009 08:38:00 GMT

Some of you with certain types of mortgage will undoubtedly have been feeling a little smug and a lot richer as the Bank of England has merrily slashed base rate to almost nothing.

Left: Having paid peanuts in mortgage repayments for ages, Woody didn’t like having to stump up some real cash when interest rates started to go up

The extremely fortunate few who took out tracker loans linked to base rate around two or three years ago are likely to be paying peanuts in mortgage repayments at present, or even nothing at all.

Meanwhile, some of you whose fixed rate deal came to an end over the last six to eight months and decided to remain on your lender's standard variable rate (SVR) might also have been laughing.

However, despite few signs from the Bank of England that the base rate will increase any time soon, now is not the time to get complacent.

The next move in the rate, when it does come, is almost certain to be up, meaning that repayments for those of you on tracker mortgages or on SVR will begin to rise too.

As a result, it could be the case that a fixed rate mortgage might well be an option now worth exploring.

Although the rates on fixed products are unlikely to be as low as those you're paying on your tracker at the moment, it might be in your best interest to bite the bullet and effectively pay more in the short term to make a gain in the long term.

Indeed, our own research suggests that the cost of fixed rate mortgage might already have reached the bottom and is now on the rise, so time could be of the essence.

Keeping hold of your tracker until the base rate starts rising could be the difference between you getting a decent fixed rate now and having to settle for one which is considerably higher in the future.

Also worth considering is that some trackers in the market offer the option to switch to a fixed rate at a future date, often without penalty.

These so called drop lock mortgages could prove invaluable right now, so it's worth checking the finer details of your policy to see if this something you can do.

Timing the switch perfectly for maximum effect is unlikely to be easy, but get it somewhere close to right and you're likely to reap the financial benefits in the future.

Tim Leonard, Senior Reporter, Moneyfacts Group

Gaining value, not equality

LeeT — Fri, 22 May 2009 14:09:00 GMT

You may not have noticed it, as this has been quite a busy time in Westminster, but the new Equality Bill, set to become law in 2010, is to put an end to age and gender bias, including in the sale of financial products.

Above:Hands up all those who think they are getting the best rate?

Banks and building societies may be prevented from treating some customers more favourably than others, including offering accounts aimed at older savers. Regardless of age the Bill does raise issues over gaining value for your savings.

The 50+/silver saver accounts should recognise that older people have saving needs and requirements that often focus on simplicity, reliability and regularity of payment. Accounts designed specifically for older savers do not always offer rates higher than other accounts in the market. Best deals are not necessarily those claiming to be the most appropriate, with rates on these accounts on the whole lower than the best instant online savings accounts available to all.

The Government recently increased the ISA limit for those over 50 earlier than the rest of the population, slightly at odds with their legislative policy. The Bill has been described as unworkable, misleading and gobbledygook, which surely makes it a certainty then. Given the current difficulties with politics, upsetting those most likely to vote would previously have been unwise. Alienating the whole electorate however, may be a cunning plan to ensure no one even bothers to vote.

Whilst the Government is keen to discuss the issue of age at a national level, in my humble opinion, there is a more pressing need for the spotlight to focus on the opposite end of the age spectrum. When not discussing MP's expenses, this week's news headlines have been filled with the details of a new family unit consisting of a Mummy, Daddy and wee one, all aged 15 or under. Are they all able to access children's accounts, never mind child benefit and child trust fund allowances?

The vast majority of the UK's eight million pensioners rely on savings or share-based income during their retirement. Compounding this, the Institute for Fiscal Studies estimates that due to the continued high annual inflation in food and domestic energy costs the poorest pensioners over the age of 80 are facing an inflation rate of 6.7%‚ compared with the official rate of inflation of 3%.

The facts are clear. Now more than ever savers need to shop around to get the best deal for their money, with the ideal place to start. With any rate rise unlikely until next year, this is a good time to ensure you are keeping any savings in the right account.

Lee Tillcock, Editor of Moneyfacts

Move to tighten mortgage lending

SylviaW — Tue, 19 May 2009 13:33:00 GMT

It appears that now the horse has well and truly bolted, financial policy and regulatory groups would like to nail the stable door shut against high salary multiple, 100 per cent and self certified mortgages.

Left:When Bess overheard the trainers talking about a level playing field she laughed so much she nearly broke the stable door

It is right and proper that failed systems are corrected but what will a tightening of lending criteria mean to the mortgage market?

Regulators are looking to bring back the bank managing styles of the old, careful, steady handed managers that were well known and highly respected locally. But is this possible in today's market?

Bank managers in the 1960s and 1970s were not under pressure to hit targets and those of us around at the time lived in a ‘local' world, unlike the target driven global world we find ourselves in today.

Branches are no longer looking over their shoulder at the bank down the street instead they are competing against internet banks and banks on a national and even international scale.

Generally in the 60s and 70s a combination of a deposit and set income multiples meant that even first time buyers were able to get on the housing ladder. To be fair, house prices were lower then making it easier to save for a deposit and get within the available lower salary multiples.

Will that be the same tomorrow or will the size of the deposit needed exclude many people? If a consequence of stricter lending is that the housing market could be adversely affected because people can't afford to buy, will it ultimately mean that the stable door will actually need to be left ajar to high multiples? Or will shared equity schemes and schemes for key-workers become the norm?

I suppose an alternative theory could be that the proposed lending constraints, together with the current correction in house prices, will produce even lower property valuations in the foreseeable future and it is this which will help people onto the housing ladder.

Either way, it will be interesting to see how tomorrow's banking system combines responsible lending with the need for profit.

Sylvia Waycot, Publisher - Moneyfacts Group

Kid’s aspirations are becoming more grown up…shame their savings returns aren’t

RichardE — Fri, 15 May 2009 10:24:00 GMT

What did you want to be when you grew up? A fireman, a ballerina, an astronaut?

Left: You’re fired: After some pitiful returns, Alan Junior decided to sack his child trust fund manager

It’s a question that we were all asked at some stage of our childhood, although if you are anything like me, things may not have gone exactly to plan ever since. I seem to recall a crazy notion that I wanted to be an archaeologist. Although I’ve no real recollection where this idea stemmed from, I have always suspected it was a combination of an unhealthy appetite for digging holes in my parent’s back garden and an obsession with Indiana Jones!

However, judging by recent research from The Children’s Mutual, today’s kids are far more serious in terms of their career aspirations. Its survey of five and six year olds found that teacher, doctor and vet were the most popular career choices. With the exception of becoming a TV/cartoon character (unfortunately the survey didn’t specify whether we are talking Superman or SpongeBob SquarePants here), the list of top ten career aspirations appears to be pretty sensible.

The research makes the sound point that achieving these aspirations will not come cheap. Six of the top ten career choices all require higher education and training, leaving parents to dig deep into their pockets in order to help their children achieve their aspirations. According to the report the cost of a three-year degree course is currently £42,000, but could rise to over £56,000 by the time these youngsters are ready for university.

Many parents with children born on or after 1 September 2002 will be pinning their hopes on the Government’s child trust fund scheme producing a significant nest egg. Sadly, the returns so far have been less than impressive. Four years since the scheme was launched, parents are understandably angry that the average stakeholder child trust fund (the Government’s preferred option) is worth less than the total contributions paid in. It is also easily surpassed by the average cash child trust fund even though interest rates have been falling!

However, there is hope on the horizon, with signs that the recent stock market rally could finally boost returns. Since the beginning of the new tax year the average stakeholder child trust fund account has increased by 8% suggesting that it could yet be worth enough for more than a round of drinks and a packet of peanuts when the first accounts mature in 2020!

Even so, parents should review the performance of their stakeholder child trust fund on a regular basis to ensure that it is delivering the goods. Similarly, if you have opted for the safety of a cash child trust fund instead, check out whether you are still getting the best interest rate on the market.

In the meantime, it would appear that some children are already one step ahead of the game. Rather than relying on their child trust fund, an increasing number have decided to head for one of the few occupations where the streets are paved with gold and further education is unlikely to matter.

Yes, you guessed it; becoming a professional footballer was the biggest mover in the list of children’s aspirations; rising three places from seventh to fourth. Now that’s what I call thinking on your feet!

Richard Eagling, Editor, Investment Life & Pensions Moneyfacts

Switch the balance of power

JamesH — Tue, 12 May 2009 15:18:00 GMT

We've all heard the saying that if something sounds too good to be true then it probably is, so it could be argued the prospect of paying no interest on debt we've run up on our credit cards fits nicely into that category.

Above:On removing his head from the sand, Oli the ostrich was keen to secure a zero per cent deal.

However, a great many consumers are missing a trick by paying banks and building societies colossal amounts in unneeded interest.

As a nation we are predicted to pay £9 billion in unnecessary credit card repayments in 2009, with less than one in four of us utilising one of a number of zero per cent deals on the market.

And despite the fact that almost half of us have carried around debt on our cards for over a year, just one in five have any plans to transfer this balance to a zero per cent card.

There will be people out there happy to pay the minimum amount required each month, but at a time when all but the very richest of us should be looking to clean up our finances, it is worth looking at what is on offer.

I should know; until recently my thinking was the same. I viewed my monthly credit card payment as a minor but necessary irritation, a bit like my membership for the gym, which I frequent about as much as MPs stay at their second homes.

However, having been cajoled into action by my colleagues, it became apparent that at my current rate it would take more than a decade to pay off my debt! That's more than ten years to pay off a small sum (less than £500) on a card that has not been used in a year.

Furthermore, the total paid back would easily exceed £1,000 - more than double the card's limit. I'm all for helping out our lenders in this time of great need, but that is ridiculous.

By switching the existing balance to a zero per cent offer and doubling the paltry amount I was paying a month, I can now look forward to clearing the balance in less than 18 months, provided I resist using it for purchases. That's not to say these cards are for everyone; if your intention is to continue spending then a better option might be transferring your existing balance to a card that offers a low rate for your existing balance as well as future purchases.

Consumers should also beware of rate hikes after the initial offer period has finished, although there is nothing to stop you applying a balance transfer to another lender's zero per cent card.

The typical charge of 3% of the balance on transfer is also worth consideration. Even a small chunk of £5,000, for instance, will have an impact.

However, if you are confident you can pay off your balance within the period when zero per cent is on offer (set up a direct debit or standing order that ensures this - this also lessens the chance of defaulting on payment) then these cards are worth a look.

The key is viewing them as a means to clear, rather than accrue, debt.

James Henderson is a reporter at Moneyfacts Group

Enough of the doom and gloom, let’s look on the bright side...

TimL — Fri, 08 May 2009 13:33:00 GMT

After a year and a half of financial meltdown and economic turmoil, you'd be forgiven if your glass seems more half empty than half full.

Left:A punch up and a black eye meant Snoopy regretted spending the savings on his mortgage repayments on a night out

Nobody can deny that the rest of 2009 will be tough, but dig a little deeper beneath the surface or apply a bit of lateral thinking and you'll soon realise that things are maybe not as bad they seem.

Stock markets have seen billions, if not trillions, wiped off their value in the last year or so, but there are signs that things are beginning to take a turn for the better. Opportunities abound for the savvy investor, while the FTSE 100 enjoyed its best month in six years during April, climbing more than 8%.

In fact, having risen more than 20% since recent lows in March, a bull market has officially begun. Past performance is, of course, not a guide to the future, and there could still be some rough patches ahead. However, it looks like the FTSE could be on its way back.

While the headlines recently screamed, "worst fall in the economy since World War Two", it's safe to assume that not all business is contracting; on the contrary, for some firms, now is likely to be their time.

For instance, if a meal at a fancy restaurant might seem a little extravagant at the moment, the local takeaway is more than likely getting your custom instead.

And while the recession has seen a number of well known chains disappear from the high street in recent months, for you, the humble consumer, it means there could be bargains to be had.

Shops desperate to get you through their door will be cutting prices, while the fact that we're in a period of deflation in layman's terms means that the price of goods and services is falling. Your hard earned cash is going to go further.

Deflation is good news for savers too. Even though interest rates are at a record low, if the cost of everything is dropping faster, then the real value of your savings will be rising.

Meanwhile borrowers, particularly those with tracker mortgage, are understandably enjoying the low interest rates, leaving most with some extra pounds in their pocket or perhaps even better the opportunity to cut short the length of their mortgage by overpaying.

Meanwhile, most signs increasingly suggest the end of the housing market slump may be in sight. When people start buying and selling houses, spending on everything tends to go up, bringing the road out of recession a huge step closer.

So it appears all might not be lost. While it seems every cloud does have a silver lining, if you're still decidedly downbeat then there's one more superficial reason I can give you for raising a smile.

The Met Office has confidently predicted we can look forward to a hot dry summer this year. If that doesn't give you a reason to be cheerful, then I dare say nothing will.

Tim Leonard is a Senior Reporter at Moneyfacts Group

Free divorce with every house – as long as it’s in Spain!

SylviaW — Fri, 01 May 2009 10:00:00 GMT

Over the last few months we have all read reams and reams on how the bottom has fallen out of the housing market.

Left:Paella, the cat, was most distressed to hear she was getting divorced as well as moving house

When this sort of thing happens, mortgage providers often start to be a little more creative with the ‘incentives' they offer to try to entice us back.

In Britain, this has taken the form of free valuations, free surveys, free council tax, free stamp duty or free (house buying) legal advice all of which is very useful, however, in Spain free offers have entered the realms of bizarre!

The housing market is so bad in parts of Spain (reports say it has dropped by 40%) that drastic action to turn it around is now being employed.

In the Huelva Province, if you buy a house worth the equivalent of £61,000, they throw in a free DIVORCE LAWYER.

I can't help wondering how they came upon this idea. Was it someone in marketing looking for an excuse to get divorced but who needed that ‘extra' incentive?

Was it just a bad translation of the British supermarket obsession with buy-one-get-one-free, which has ended up with one couple needing to buy two houses because they have taken advantage of the ‘special deal' with the first?

Or, was it a genuine attempt to keep two industries going as, apparently, getting divorced in Spain is prohibitively expensive so people aren't doing it.

My other question is, how on earth do you sell this to your partner, which one gets the lawyer and which one gets the house?

I wonder if there is a time limit on the use of the lawyer or if you can keep it on the back burner, for those days when your feel sorely tempted.

It would certainly make a change from the more traditional cry of ‘going back to mum'.

I understand it's easy to knock new ideas, but having thought this one through, it may be fine for the Spanish market but I hope it doesn't catch on here!

Sylvia Waycot, Publisher - Moneyfacts Group