Tuesday, February 28, 2006

What is a Tracker Mortgage?

A Tracker Mortgage “tracks” (follows) the Bank of England Base Rate (BoEBR) usually plus a certain figure eg 0.5%.

At the moment the BoEBR is 4.5%, so you will pay 5% interest.

If the BoEBR falls to 4.0%, you pay 4.5%
If it rises to 5% you pay 5%.

How about a discounted tracker mortgage?

This is where for 2-5 years the interest rate will be a small fraction above the BoEBR.

After it will revert to a higher figure, usually the Standard Variable Rate (SVR, around 6.5% currently).

Note the caveats at the bottom of the page!

Tim Almond: DVDs & Money Off Coupons

IT Software consultant Tim Almond has suggested some really good consumer tips by email.

Find the best deal on a DVD across the world
Just make sure you are geared up for multiregion.

Search for coupons. Next time you are thinking of going to an online retailer.....Google for "storename +coupon". Sometimes, you can find something that can save £10 or £20 off an item.

He's also got a Swindon Dining Guide, for those of us lucky to live in the area

What is a Fixed Interest Mortgage?

A Fixed Interest Mortgage guarantees the mortgage interest rate for typically 2,3,5 years.

Currently (28/2/06) most rates are between 4.5 and 5%.

Attractions of Fixed Rate Mortgages

1 You know your mortgage repayments for 2,3,5 years
2 The rate won’t go up.
3 Good rates are available.

Disadvantages of Fixed Rate Mortgages

1 Normally pay a fee of £400-500.
2 Don’t benefit if rates go down.
3 Repayment goes up dramatically after the fixed period ends.
4 You’re caught in a constant cycle of remortgaging to get the benefits.
5 There are severe penalties for switching mortgage during the term.

Like any serious financial commitment it is recommended you take proper advice. Please note the caveats at the foot of the page.

Monday, February 27, 2006

Kent Robbery: Money Laundering

Every time there is a major bank robbery, there is speculation how the money will be laundered.

The culprits of the recent bank robbery in Kent have already tried to place some of the money in the Portman Building Society. The staff alerted the police when a large amount of cash was deposited.

What the robbers are trying to do is give the money a legitimate source. This can be done by buying investments & surrendering the money early. The money is then routed through a complicated route of other financial institutions.

When make contact with a financial institution or adviser for the first time, you have to give 2 forms of identity. The reason….Money Laundering legislation.

Sunday, February 26, 2006

Has Martin Lewis Jumped the Shark?


I had a full & frank discussion with Martin .
No prisoners taken.

I asked him about his relationship with certain financial organisations. He took the bait & went ballistic but we kissed & made up. A fan of his posted at 2am in the morning that I was despicable. All for being an Independent Financial Adviser who does not have any links with any financial providers!!

Strangely enough he didn't mention his book. Schoolboy error.

Thing I don't understand is how 2 very nice ladies I met recently in their late 20s said they really liked him!!

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Saturday, February 25, 2006

Well done Scotland. Sportsmanship

Well done to Scotland for beating England at Rugby 18-12.
I am Scottish & my mother has red hair!

England played well & were magnaminous in defeat.
The sportsmanship & comradery in Rugby put football to shame.

Note: Football is my first love.

Money People 1: The Pub Bore

You are in the pub & you hear a loud voice, always male, he's sounding off about mortgages, home insurance or something similar. (Think Al Murray's Pub Landlord on the other side of the bar).

He is surrounded by a group of friends who don't say anything.

You know not to approach or make eye contact.

Other favourite topics:

1 Jose Mourinho: "Arrogant, but you've got to hand it to the man"
2 Tony Blair: "Liked him when he started....."

Friday, February 24, 2006

What is an Interest Only Mortgage?

An interest only mortgage is where you pay only the interest on the loan. You do not pay off any of the amount owed (the capital)

With the more traditional repayment mortgage you pay off the amount owed at the same time.

Interest only mortgages are cheaper than repayment ones. However you are supposed to have some kind of investment vehicle (an ISA or pension, previously an endowment) into which you pay money and at the end of the mortgage term this pays of the original amount borrowed.

If the investment vehicle does not accumulate enough to pay off the loan there is a shortfall. This is what has happened with many endowment mortgages. You have to make up the shortfall.

Some first time buyers are talked into getting an Interest Only mortgage as a way of getting on the property ladder. The problem is they are not putting money aside in an investment. Plus they are not accumulating any equity in the property.

Not recommended for most people.

Thursday, February 23, 2006

Save £2 500 on your Mortgage says Telegraph

3.5 million home buyers are paying £6 billion a year too much for their mortgages. 30% of borrowers are borrowing at their bank/building societies Standard Variable Rate (SVR) according to the Daily Telegraph.

For the biggest lender (Halifax) the SVR is 6.5%, while there are lots of deals @ 4.5 % for fixed or discounted interest mortages.

Eg a £100,000 mortgage.
Annual interest on SVR @ 6.5%= £6 500 per year
Annual Interest on @ 4.5% =£4 500 per year

To pay for this you must earn an extra £2,560 a year gross (£3,300 higher rate tax)
Who benefits? Not you.
Add to this that you could also be paying to much for your Home & Mortage Insurance.

Switching to a cheaper mortgage could be the best financial decision you’ll make this year.

Tags: save, money, mortgages, remortgages, , ,
Related: Mortgages Homepage, What is....home insurance?

Monday, February 20, 2006

What's in your wallet?

1X Alliance & Leicester Debit Card. Current Account pays 5% AER interest plus 0% overdraft for a year

1X A&L Credit Card: need to get rid of…..said 0% balance transfers for 6 months…checked & they request a 2% fee….

1X Cahoot Debit Card. Current account pays 4% AER.

1X Intelligent Finance Credit Card: 0% on balances & transfers for 9 months

1X Mint Credit card. 0.05% cashback on purchases (also originally 9 months 0% on balances & Transfers)

100s of business cards from networking events

Some stamps from Hungary!

Please add your own lists in the comments

Sunday, February 19, 2006

Identity Fraud: Misplaced Hysteria?

Consumer Organisation Which? says policies insuring against identity fraud are not worthwhile. Policies cost around £7 a month. They work by making regular credit checks for patterns of unexpected borrowing.

The Daily Telegraph recommends taking the following action

• Shred personal documents – then bin them.
• Cancel unused credit cards. You can check your credit rating if you are unsure
• Don’t give personal infomation to anyone, however legitimate they may seem, without first confirming who they are and why they want the information
• Check your credit file regularly to see what information is held about you
• Check your financial statements; experts say few people regularly look at their current account and credit card statements to check transactions

Saturday, February 18, 2006


There is a Personal Finance Blogs Aggregator PFBlogs. It's mainly American focussed but worth a browse. It pulls together lots of bloggers writing on personal financial issues.

BTW have readers come across any other good UK finance blogs?

Friday, February 17, 2006

Health Warning on Advice Free Financial Products

Many financial providers are offering products via the phone & internet without advice. However you are ineligible for compensation if you buy a financial product without advice and it is unsuitable.

Eg Do you know the difference between Terminal Illness Cover & Critical Illness Cover? The difference could be very costly.

Liberal Democrat spokesman Vince Cable said: "I would like to see a health warning on web sites, leaflets and documents. It should state the situation very clearly and ask potential customers if they are aware that they will be ineligible for compensation if they have not sought financial advice.

Wednesday, February 15, 2006

The Cost of Smoking

Rob at Money Watch looks at the cost of smoking.
Not only is the habit pricey, it raises the cost of financial products such as life and income protection insurance.

£100,000 of life cover,over a 20 year term,
Male non-smoker age 38 next birthday
cheapest monthly premium=£10.40.
For a smoker, the cheapest premium £19.49.
Nearly 2X!!

Tuesday, February 14, 2006

Wedding Gifts from the Taxman

Where one partner in a marriage or civil partnerships is not in full time employment or paying less tax this can be used to the couple’s advantage.

Savings can be put in the name of the person of non-taxpayer or the person paying a lower tax rate, the result less tax is paid.

Assets (property, shares) can also transferred between partners without paying Capital Gains Tax (CGT)

Additionally a non-tax payer can get hefty tax relief by putting money into a Stakeholder pension. The maximum contribution £2 808 (net) becomes £3 600 after tax relief

Technorati Tags: , , , ,
Related: Money Seems to be the Hardest Word, Wedding Costs & Insurance,
Credit Cards: Unhappy Marriage
, Marital Bliss & Inheritance Tax

Marital Bliss & Inheritance Tax

There is an upside to all the expense when you get married or enter a civil partnership.

Your relatives are able to help you out with tax free cash. Parents can give £5000, grandparents £2 500, other friends/relatives £1 000 free from inheritance tax.

Monday, February 13, 2006

Credit Cards....An Unhappy Marriage

Nearly a third of people lie to their partners about their credit card spending the FSA (Financial Services Authority) reports.

This could be important if your partner builds up a record of unpaid bills, your own credit file is impaired as your history is effectively tied to theirs.

Sunday, February 12, 2006

Cost of a Wedding....& Insurance

A typical Wedding costs £17 000 according to Alliance & Leicester. What happens if the wedding is cancelled and you still have to pay out for it? Most people would prefer not to think about it.

Fortunately, Wedding Insurance costs between £50-£100.
Thanks to the Daily Telegraph

Saturday, February 11, 2006

Couples: Most Difficult Subject to Discuss is...Money

For 75% of couples, the hardest thing to discuss in their relationship is….money, an FSA (Financial Services Authority) survey reports.

This is the start of a week of articles on the financial implications of relationships.

Monday, February 06, 2006

Credit Cards: 0% Balance Transfers…..Be careful

Using 0% Balance transfers on Credit Cards has become popular in recent years. Credit card lenders have realised this & have introduced a subtle new charge.

Lenders such as Egg & MBNA have introduced a 2% arrangement fee…..with a minimum of £50.

Eg you transfer £1000, with the fee of £50….
The arrangement fee is actually 5%
With £500, it’s 10%......

Sunday, February 05, 2006

What is Inheritance Tax? (IHT)

A report by Scottish Widows Bank has revealed that 1/3 of families face potential Inheritance Tax (IHT) liabilities.

So what is IHT?

When a person dies & they don’t have a husband or wife to pass on their assets to, the person who inherits the money becomes liable. When one member of an elderly married couple dies, the assets become the property of their partner. However when the partner dies, their children are often faced with a sizeable tax bill.

What assets are taxable? What is the estate?

For tax purposes the assets of the deceased person are called their estate.
This includes everything owned in the dead person’s name or jointly owned.

Why is it important?
If the the estate is over £275 000 (2005-2006 tax year), then anything over that is taxed at 40%

Eg £1million pounds of assets.
Then 1 000 000 -275 000= £725 000 is liable for tax
Tax=725 000 X40%=290 000

Clearly with current levels of house prices it is an important issue

What should I do about Inheritance Tax?

1 Consider the possibility of IHT
2 Consult a professional (IFA, tax consultant)
3 Take Action

In the next instalment, we’ll look at what action can be taken.
To be continued

Thursday, February 02, 2006

Cheaper International Calls

This weekend you may be calling family or friends abroad.
Martin Lewis has an ingenious
Call Checker on his site.

You select the country, landline or mobile & you get a comparison chart.

Tags: ,, ,
Free Calls VoIP, Free Landline Calls, Call Mobiles 1p per min

Wednesday, February 01, 2006

10 Ways to Get Richer in 2006

1 Remortgage your House
Reduce your Home Insurance
3 Get a Better Current Account
Pay Less for Fuel bills (£420)
Save Money on Phone Calls
6 Beat the Taxman (7 Tips)
7 Get a Better ISA
Slash your Credit Card Bill
9 Get independent advice
10 Haggle

The good thing is you don't need to change jobs....

Free Calls: VoIP

There is a guaranteed way to make voice calls for free. It is VoIP (Voice over Internet Protocal).

What is VoIP?
Talking through a headset connected to your PC to another person also connected to a headset & PC.

Is it really free? Yes

How do I get it? Most of the Instant Messaging Services have a service. You download the a programme such as
Skype, Google Talk, MSN Messenger , Yahoo Messenger, AOL Instant Messenger

The person you are talking to must have the same service
The providers also offer a way to call landlines/mobiles for a fee.

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Free Landline Calls, Mobile calls 1p per Min