Can we take care of the world while taking care of our finances?

IONA BAIN

You don’t need to go all hippie to care about ethical finance…

SCOTS are being asked to consider the moral implications of their financial decisions as part of a national drive to encourage ethical saving and investing.

Religious leaders, entrepreneurs and financial advisers are supporting Good Money Week, which kicks off tomorrow, in the hope it will bolster their efforts to create a more virtuous financial system in Scotland.

The Church of Scotland is galvanising its ministers to preach about the initiative, having held a high-powered conference in Glasgow earlier this month to raise awareness.

Scott Murray, director of Edinburgh-based Virtuo Wealth, said: “The public debate about ethical finance is finally filtering down towards the retail market. Consumers routinely ask whether they should buy fair trade chocolate, so why not do the same with their Isa?”

Julian Parrott, partner at advisory firm Ethical Futures in Edinburgh, said the campaign’s change of name from Ethical Investment Week heralds a greater awareness of banking, insurance and saving options for conscientious consumers.

He added: “There is also a nascent market in social impact investment as well as community and peer-to-peer investments, particularly with a focus on environmental projects.”

Indeed, investors can now support worthy businesses directly through Crowdcube, a crowd-funding site which has just set up its first office in Scotland.

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Filed under Banking, Consumer Affairs, Ethical Finance, Pensions & Retirement, Personal Finance, Savings Accounts

Dealing with social pressures to spend: a few suggestions

Iona Bain

Picture the scene: it’s Friday night and your friends want to go out to a bar or a fancy new restaurant.  But you’re not sure if you can afford it – perhaps you’ve been splashing out a bit too much lately, you’re saving up for a big purchase or you’re just feeling a bit skint. What do you do? More importantly, what do you say to your friends?

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Here’s another variation on the theme: your pals want to go and see a film, a new play or a big gig. You’re up for it in theory but you’re not sure that the cost is worth it. Do you find a way to pay for it? Where do you draw the line?

There are several reasons why we are compelled to say ‘yes’ to every exciting invitation when we’re young. Firstly, we work hard so we want to play hard. Many events genuinely appeal to us and we know that we’d have a great time. You love that band, you’ve dying to see that film, you need to let your hair down.

It can be tricky for us to budget well, save and generally track down the cash for all the things we genuinely want and need. So the situation gets more complicated – and critical – when some social invitations are more of an unknown quantity. Do we really want to go to that restaurant that our friend loves? Is that nightclub really all it’s cracked up to be?

Yet we feel compelled to say ‘yes’ even when the social event is being chosen for us. In an ideal world, we would be controlling where we go, what we do and how much money we spend. In the real world, many of our friends make up our minds for us – and we go along with the plan to avoid a boring night at home.

So how do we keep up with our friends without breaking the bank? Vivi Friedgut, founder of Blackbullion, suggests that we find ways to dip in and out of nights out and costly activities. She also says that we can propose cheaper alternatives on occasion to ease the pressure.

Here are Vivi’s three suggestions – how many can you come up?

Take the reigns – Plan a low cost or free event e.g. go to the movies on a discount night or free gig or museum day

Work out what you can do – rather than ignoring an invitation to go out or do something, see if you can join a portion of the night. e.g. say you will only join for dessert

Share the cost – Invite everyone to come over and bring something e.g. for the footy instead of the pub or Sunday dinner instead of a takeaway

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Filed under Leisure, Moneysaving tips, Personal Finance, Shopping

The Credit Score of Fate

By Helen Lawless

The concept of a credit rating, some arbitrary number decided by some strange algorithm, having sway over your financial fate – it’s rather alarming, isn’t it?
Well, I’ve got news for you – young people need to be on the ball when it comes to their credit rating, especially in the post-crisis era when lenders are going to new lengths to appear responsible. Don’t worry though – armed, with a little information, it doesn’t have to be so ominous.

SUPPORTED BY MYCREDITMONITOR.CO.UK

So what is a credit rating anyway? Why does it matter? At some point in your twenties, you’re going to need to borrow money, and your credit rating is a measure used by lenders to decide whether you’re a sound investment. In other words, they want to know how likely it is that you’ll repay your debts – and your credit rating helps them to weigh up the chances.

Credit ratings combine information about you, your employment or future prospects thereof, what you submit in your application and most pertinently your credit history (when you’ve taken out money before, and if/when you paid it back) to indicated your credit worthiness in a single figure. The higher, the better.

At one time, credit ratings were only relevant to large loans, like mortgages, but now they are taken into consideration when banks give out private student loans, by home and car insurance companies when they offer policies, by landlords when they decide how much rent to charge, and even by mobile phone networks when they decide whether to offer you a contract. That means a credit rating has the potential to significantly affect a young person’s financial – one might even say their personal – well-being. Here are a few ways to build up a sound credit rating:

1. Don’t apply for multiple loans simultaneously if you can help it. Space your applications out as much as possible – otherwise, this can raise a red flag. On a similar note, close any bank accounts you don’t use, as this can also trouble lenders.

2. You want to appear steady and reliable. For example, lenders like a long employment history so mention all your previous paid jobs. A stable locale is also beneficial, which is why lenders tend to prefer people who own rather than rent their homes. So put down a landline phone number if you have one (you can usually get a landline pretty cheaply in a bundle with your home internet). Having been with the same bank for a while will also make you seem like you’re likely to stick around. Remember to double check your loan applications for errors; re-read the thing until you’re sick of it!

3. Don’t just pay back your bills in full, but be as timely as possible. Find a way to remind yourself in advance when your payments are due.

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Essentially credit can either be a virtuous or vicious cycle: if you pay back your bills in plenty of time and err on the side of caution, rather than extravagance, lenders will offer you a better deal next time. When you’re young, you haven’t had many opportunities to prove your reliability, but if you manage your credit prudently over time, you will seem less high-risk. Here are a few tips to keep your credit sheet looking clean:

1. Make sure there are no mistakes in your credit report. Make sure all your contact details, employment history and credit history are accurate. Similarly, make sure you also keep all your information with your bank, local council, national insurance and the electoral roll up to date.

2. Be careful about entering into loans with other people: if you’re seen to be “financially associated” with someone else, their credit score is your credit score, and they may not have been as thoughtful as you have.

3. If you need to build your score quickly for a larger loan, consider a pre-paid credit-builder card: after 12 months or so of successful repayments on a hiked interest rate, your credit score will have dramatically improved.

So control your credit score – don’t let it control you!

THIS POST HAS BEEN KINDLY SUPPORTED BY MYCREDITMONITOR.CO.UK – AND LOOK OUT FOR MORE FROM HELEN ON THE BLOG…

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Filed under Consumer Affairs, Credit, Debt, Loans, Personal Finance

Help is at hand for students who are fudgeting their budgeting…

You may have seen my recent feature on FOMO-affected students who are overspending to keep up with the Joneses (or should that be  the Kardashians?!)…You may be a student who is struggling to keep that urge to splurge under the control, or you might know a fresher who could do with a reality check.
Help is at hand. Check out these stats from Jonathan Chesterman, advice manager at debt charity Stepchange – he also has some constructive advice on how to stay within a student budget…

JONATHAN CHESTERMAN

It’s easy to see why some students struggle financially, as they have less opportunity to generate income – 57 per cent of the students we advised last year stated reduced or irregular income or unemployment as the trigger for their debt problems.

For many, this will be the first time that they have been offered access to credit, and we do see problems with traditional forms of debt. 75 per cent of the students who called our Helpline in 2013 had overdraft debt, at an average of £1,509, and 54 per cent had credit card debt, averaging at £3,657.

Students should also be aware of the risks of high-cost forms of credit, such as payday loans and store cards, which can quickly spiral out of control due to the high levels of interest and charges. Of the students who contacted us with payday loan debt last year, the average amount owed was £1,069 – most students receive a maintenance loan of just £1,390 to cover living costs for their entire first term at university.

Starting university may be the first time that many young people have had to create and stick to a budget, and it can be made more difficult by the fact that maintenance loans, grants and bursaries tend to be paid in lump sums. We would advise students to work out their income as a monthly figure. Next, work out your monthly outgoing costs, remembering to include everything like accommodation, travel, food shopping and socialising. Be realistic about the amount you can afford to spend in each area.

If you find you have more money going out than coming in, try and cut down on the amount you spend where you can. Always pay priority bills like rent, TV licence and utility bills first – these are the things that have the biggest consequences if you don’t pay them. Last year, 29 per cent of the students we spoke to were in rent arrears.

If you feel like you have the time and it won’t negatively affect your studies, then you may wish to look for a part-time or holiday job to supplement your income. You can earn up to £9,440 before you start to pay tax.

If you’re still in a budget deficit and think you might have a debt problem, the most important thing is not to struggle alone. Seek free, confidential advice from an organisation like StepChange Debt Charity, who can help to work out the best way to deal with your debts (0800 138 1111, www.stepchange.org)

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Filed under Debt, Leisure, Loans, Payday loans, Personal Finance, Student Finance

Runaway debt: It’s the new norm for university students now

BY IONA BAIN

The Independent

Featured in The Independent

StepChange, the debt charity, has revealed that students who called its helpline in 2013 had racked up average debts of £7,818

Pic: Lorne Campbell/Guzelian

Peer pressure and the so-called “fomo” phenomenon is driving students into unnecessary debt as half of all undergraduates run out of money before the end of the month, research has shown.

Financial education firm Blackbullion said nearly a third of students blame “unexpected expenses” for the shortfall in their finances, while 38 per cent admit they splash out more often than expected.

The Money Charity has already warned that some students in England may need as much as £750 a month to pay for their accommodation, even after receiving the maximum funding available through maintenance loans. This could leave the average English student based in London with just £449 to live on each month, while that figure drops to £350 if they live outside the capital – the equivalent of an adult on a £21,000 salary paying more than £1,000 a month in rent and bills per month.

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20 Tips From 20 Pensions Experts – How To Retire With A Good Pension: In association with Dam Good Pensions

By dam good pensions with iona bain

We would all love to have a DAM good pension when we retire, but how do we go about getting that pension pot we can be happy with? Well, here at DAM we decided the best way to find out would be to ask the experts. And that we did…

We asked some of the leading pension journalists, bloggers and industry-insiders to give one tip each for how to retire with a good pension and here are their nuggets of wisdom below…

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“Pay your national insurance contributions, work hard and save into a workplace pension as much as you can. The rest is up to your provider and the markets!”

Henry Tapper, The Pensions Plowman, @henryhtapper

“Contribute, contribute, contribute. Whatever you’re paying towards your pension, it’s probably not enough. As a rough guide; remember those generous, final-salary based pensions your parents had? They ended up costing about a third of their salaries – a lot more than the current 8% minimum.”

Mark Cobley, Pensions Editor at Financial News, @fanfaronade

“Spend less, save more. The wealthy pensioner is the average man who focused on saving 10% of what he earned every day for a long time.”

Robert Gardner, Co-CEO of Redington, @robertjgardner

“Start saving for your pension as early as possible. The extra years of contributing can make a huge difference to your final pension pot, even if your investing has a few hiccups along the way.”

John Fitzsimons, Editor of LoveMoney.com, @johnthejourno

“It’s a false economy not to pay for independent financial advice. Seek a trusted, reliable IFA with superior retirement planning knowledge to advise you on contributions, provider and, when the time comes, how to draw your retirement income.”

Gill Wadsworth, Freelance Financial Journalist, @gillwadsworth

“Start early and make sure that you increase your pension contribution with every pay rise that you get.”

The largest piggybank on the block

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Helen Morrissey, Editor of Retirement Planner, @pensionshelen

“Find out the maximum matching contribution your employer will put in to your pension pot, and then save at that level. Investment returns are just the side show, what really makes the difference over the long term are the contributions.”

Sam Brodbeck, Assistant Editor at Engaged Investor & Pensions Insight, @pensionssam

“Get to grips with your company pension. Check how much you’re paying in – are you happy with where your money is being invested? Most people in a money purchase company scheme are in the ‘default’ fund, but this may be too cautious for some and many schemes offer a selection of funds.”

Rupert Jones, Deputy Editor of The Guardian’s Money pages, @rupert_jones

“Keep active, eat your greens and enjoy what you do. Working longer through your life will guarantee a better pension.”

Alistair McQueen, Pensions & Investments Policy Manager at Aviva, @pensionsmcqueen

“To retire with a good pension, one must be realistic above all else – How much will be needed in retirement and how much must be saved, and over what period of time, to achieve that? In short, what does ‘good’ look like for the individual and what steps are they taking to realise their goal?

Simon Kew, Director of Pensions at Jackal Advisory, @pensionsjackal

“To get a good pension, work for the Civil Service or local government! Otherwise get a good pensions adviser!”

David Trenner, Technical Director at Intelligent Pensions, @davidtrenner1

“Set financial goals for a range of time horizons. Saving for retirement doesn’t happen in isolation. One needs to balance short and medium term retirement objectives with the need to save for one’s retirement.”

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Stephen Huppert, Partner at Deloitte Australia, @stephenhuppert 

“If what you are saving is not hurting it’s likely that you will be disappointed with the outcome.”

Robert Reid, Readers Editor at Money Marketing, @reidremoney

“Start a pension before you think you need to!”

Tim Boles, CEO of Equilibrium Pensions Limited, @timcboles

“Start early and take advantage of compounding. Also, make good use of higher rate tax relief if you’re able, as it’s looking like this benefit might be taken away soon.”

Matthew Bird, Investment Enthusiast and Blogger, @mattbird55

“My one tip would be that whilst it is understandable for all the media headlines about pensions to lead to confusion or scepticism about them, not to let that lead to apathy or inaction about your own retirement planning, as that can be the most costly mistake of all. As the saying goes, time is money!”

Phil Netherwood, Owner of Advice About Money, @adviceaddsvalue

“Don’t limit yourself to pensions. An Isa can be an equally effective – and arguably more flexible – way of building up a decent income to support you in retirement.”

Cherry Reynard, Freelance Financial Journalist, @creynard0654

“Be realistic, if you want to spend a third of your life at leisure, you’ll have to save like crazy whilst you’re working.”

Patrick Bloomfield, Partner and Actuary at Hymans Robertson, @patrickpensions

“Start making contributions as young as possible & contribute as much as you can, even if that means starting low & increasing over time.”

Fiona Cowie, Director of Essential HR, @hrandreward

“Start early, save more when you get a pay rise and cut out the daily cappuccinos – every little helps!”

Stephanie Hawthorne, Editor at Pensions World, @pensionsworld

And here are a couple of bonus tips (Because we love to overdeliver)!

“Don’t intend to save for your future, start doing it now. And remember, your house is your home, not an investment portfolio.”

Pádraig Floyd, Financial Journalist, @gogetemfloyd

“Don’t put it off till tomorrow. This means taking immediate control of your finances so you know exactly what money is coming in and what money is going out. Understand the fundamental importance of discipline in money management, and exercise it every week when your pay packet comes in. Being aware of your budget, sticking to it without fail and setting aside money for tomorrow will reap huge rewards.”

Iona Bain, Financial Journalist at Young Money Blog, @ionayoungmoney

- See more at: http://www.damgoodpensions.com/blog/20-tips-from-pension-experts-retire-with-good-pension/#sthash.uc2T34Ud.dpuf

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Playing family fortunes

In her latest column for fa, iona bain looks at why families are happy to let their wealth cascade down the generations

One of the most significant outcomes in the lottery of life has to be the family we are born into. A savvy and attentive parent – all the better if there are two – can give an instant, highly potent advantage in this world. Throw in a couple of wise, wealthy grandparents and you have well and truly lucked out.

Dream parents and grandparents do not just offer up role models for solid money management – they also support us until we can support ourselves. In other words, they make good with the dosh when we really need it, even as we progress into adulthood.

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I do not know how many of my 20-something friends could have stayed afloat, let alone started to fulfil their potential and lay the foundations for a bright future, if their families had not thrown them a financial lifeline or two. We are all aware of the conundrum facing first-time buyers, many of whom cannot save for a mighty deposit because they are tethered to grossly high rent. We know the job market has not been kind to graduates and school leavers since the recession took hold. It hardly needs stating that starter wages are not commensurate with the cost of living once taxes, bills and tuition fee debt is accounted for.

Little wonder that many members of the older generation do what they can to ensure these hurdles do not floor the talented young people that they know and love. An acquaintance of mine paid a modest amount of rent to stay at home for four years, only to be presented with all the cash she ever paid (plus a bit extra from her parents) on her 26th birthday. Imagine her surprise and delight when she was told she could get her first home deposit with all the money she had saved. Another young guy is pulling out all the stops to find a job that pays him more than the dole and is renting a grotty flat in my hometown of Edinburgh – he would be forced to live on £9 a week after bills and housing costs were it not for financial support from his grandparents.

We are not talking about mollycoddling or handouts for spoilt brats here; the majority of young consumers want to be self-sufficient more than anything else. We feel an uneasy combination of gratitude and guilt when family members promise to help us through university, give us their old car or loan money on terms and conditions that could fit onto a postage stamp.

But, to be fair, we did not choose to be born and certainly not into this economic era in which young people have really drawn the short straw. Is it too much to expect some financial assistance as we find our way through this mess? Besides, the former universities minister, David Willetts, is right to point out in his book, The Pinch, how a supportive approach is in the babyboomers’ own interests. He even mentions a popular US bumper sticker that says: “Be nice to your kids – they will choose your nursing home.”

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Special report: Will Scotland be better off going solo? PART II

IONA BAIN

In the concluding part of this special report on Scottish independence, the Young Money Blog looks at the potential implications of a yes vote for Scotland’s pensioners – current AND future (yep, that includes us young folks!)

Burning questions about pensions in an independent ­Scotland have yet to be answered on what is proving to be a crucial battleground on the eve of the referendum.

Scotland Independence Scottish Flag Nail Art

These aren’t my hands, in case you were wondering…

In a survey by Glasgow-based Martin Aitken Financial Services, 60 per cent of 170 clients said their greatest concern, out of all the issues surrounding Scottish independence, was the “personal financial implications” and the future of the state pension.

The Scottish Government has not elaborated on the tax incentives it would introduce to encourage long-term saving.

Nor has it confirmed it will copy the Coalition Government by allowing Scots to have unfettered access to their pensions at minimal tax rates.

The policy, announced in this year’s Budget, has already boosted nationwide levels of retirement saving even before its introduction next April, according to research published by the consultancy LCP last month.

The SNP has also yet to offer free guidance for every worker reaching retirement, another of the Treasury’s much-discussed pension reforms.

But it has vowed to improve free advice at retirement as part of its Financial Capability programme, and to work with Scottish companies to develop alternatives to the much-maligned annuity.

In the event of a Yes vote, the Scottish Government has promised a new range of regulators to help protect private pension buyers and employees who will continue to be automatically enrolled into workplace pensions.

These would include Scottish versions of the Pensions Regulator, the Financial Ombudsman and the Financial Conduct Authority. It says 27 independent EU countries have their own regulators.

The Pension Protection Fund, however, may or may not be replicated north of the border.

Stairway Edinburgh, Scotland

Decisions on how to cover risks faced by Scottish pension holders could be fraught with difficulty, the National Association of Pension Funds (NAPF) argues.

In a paper published earlier this year, it stated: “There is uncertainty in the short term about which schemes would be overseen by which body, what would happen to Scottish schemes that have already entered the UK pension protection fund in the short term, and how any schemes in the PPF that may be identified as cross-border following independence will be separated.”

The NAPF claims that unpicking the current regulatory and compensation structure “would be extremely difficult and would require careful management over a long period of time,” leading to substantial costs.

“Ultimately, these costs may have to be passed on to pension-scheme members, eroding the value of their pension savings.”

Furthermore, a Scottish equivalent of NEST, the state-backed pension scheme for employers of any size, may not give users value for money, the Institute of Chartered Accountants in Scotland has suggested.

This is because the country’s smaller number of pension savers will still be required to pay “fixed costs relating to the initial set-up and continuing operation” of such a scheme.

Investment giant Blackrock would prefer a new currency for an independent Scotland but has warned of “added complexities” should pension schemes have to accept contributions in two separate currencies.

Scotland.  Iona it's beautiful and I wonder if is still there a wonderful bakery shop selling very good bread.

Alasdair MacDougall, director of Martin Aitken Financial Services, said uncertainty was the principal cause of the negative findings in the client survey.

“That causes major problems if people think there is no plan B when it comes to a currency union – and there is a real risk that migration of financial brains and institutions down south could have a significant impact on the quality of financial services up here.”

Another issue for occupational pension scheme members in defined benefit schemes comes in the form of an unexpected U-turn from the European Commission. Cross-border pension schemes will still be required to be fully funded at all times after the EU decided against scrapping the current regulations earlier this year.

Joanne Segars of the NAPF said: “The European Commission had been expected to relax these special cross-border requirements, but it has disappointed many observers by leaving this part of the pensions directive unreformed.

“The knock-on effect of this is that schemes with members both north and south of the Border would become much more expensive to run if Scotland were to vote for independence.”

The Scottish Government says: “In terms of rights and accrued entitlements to private pensions, there will be no changes on independence.”

It adds: “Scotland and the UK will work with the EU to put in place the measures needed to deliver a smooth transition to fully funded pensions.”

There is more certainty on state pensions in an independent Scotland. SNP ministers would maintain the “triple lock” reform initiated by their Westminster counterparts last year, guaranteeing a state pension rise in line with earnings or inflation, or at the rate of 2.5 per cent, whichever is greatest.

An independent Scotland will also give a higher flat-rate pension than the UK, £160, by 2016/17 and continue to offer savings credit.

But there is still no word on what the state pension age would be. The level has been raised to 66 from 2020 and 67 from 2036 by the UK Treasury, making much-needed savings.

ORIGINALLY PUBLISHED IN THE HERALD SEPTEMBER 2014, COPYRIGHT IONA BAIN ©

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Special report: Will Scotland be better off by going solo? PART I

IONA BAIN

in the first of a two part series, the young money blog scrutinises the financial ramifications of a yes vote in the independence referendum – today, we look at taxes and savings before moving onto pensions later this week

Uncertainty over the personal-finance ramifications of an independent Scotland is keeping some individuals and small-business owners awake at night, a Glasgow advisory firm has claimed in the run-up to the referendum vote…this special report looks at the financial ramifications of a yes vote

As questions arise about future access to tax privileges and products currently available UK-wide, a survey by Martin Aitken Financial Services found two thirds of 170 clients expressing worries over their finances in a future Scottish state.

Edinburgh Castle, Edinburgh, Scotland

The Glasgow-based tax and advisory firm said nearly 65 per cent of clients and contacts interviewed said worries over higher business and personal taxes were “keeping them awake at night” in the run-up to the ­referendum. More than 70 per cent of clients polled in the survey said they were concerned about their personal wealth in an independent Scotland.

The SNP has long pledged to use devolved tax powers, granted by the Treasury regardless of the referendum’s outcome, to suit the nation’s needs. The Yes campaign says: “For the first time ever there will be a guarantee that taxes will be set by a government that has the support of the people of Scotland.”

Alasdair MacDougall, director of Martin Aitken, commented: “People, businesses and markets can deal with bad news but what they do not like is uncertainty.

“A number of our clients live and work in England as well as Scotland, and many have put a moratorium on any business north of the Border at present. For instance, investment clients in London who may have previously had commercial-property interests in Scotland are buying nothing here at the moment.”

The snapshot comes as experts disagree about whether Scots could pick and choose jurisdictions to house their savings nest eggs. Fund supermarket Hargreaves Lansdown has previously argued that savers could exploit different tax environments in the UK and Scotland by weighing up which one has “preferential investment terms” compared to the other.

Scotland Flag Christmas Tree Ornaments

The Scottish government has said it would allow cross-border financial transactions to take place. However, National Savings and Investments, the Treasury-backed provider of the popular Premium Bonds and savings certificates, has confirmed that Scottish customers would not be able to take out any new products post-independence unless they hold an English bank account.

Even if Scottish customers met that criteria, NS&I could still turn them away; it shut down 2,700 US savings accounts this summer after an American tax clampdown made administration costs “disproportionate”. The independence White Paper said the creation of a Scottish NS&I would not be an “early priority” in a low-interest-rate environment.

Some Scottish savers may not mourn the loss of flimsy returns on NS&I accounts and the low odds of winning the Premium Bond’s £1 million jackpot. But all could miss out on the UK’s recently-improved Isa allowance of £15,000 in tax years to come, said David Welsh, tax and trust solicitor at Turcan Connell in Edinburgh. “Given that the Isa allowance is designed to shield savings from income tax and capital gains tax, savers could only live in official UK tax territory to benefit.”

Jeffrey Mushens, technical director at the Tax Incentivised Savings Association, said: “The government has said it would honour existing tax-free products held by Scots post-independence but only UK residents are eligible for Isas, so would the Scots be treated any differently? EU law does not permit preferential treatment in this way.”

Jubilee interior

Mr Mushens also argued that a Scottish government may have difficulty in identifying those who have taken out Isas with English firms, as HM Revenue and Customs would not hand over “sensitive information” about taxpayers that easily.

He added: “An alternative ­Scottish HMRC would have to be established if it wishes to support tax-free savings allowances and set up a “Sisa”. But it will take a long time to build the systems – a proposed timeframe of 18 months post-independence is delusional.”

English residents in Scotland and cross-border workers could also face a squeeze on their personal tax allowance in the event of independence. The Treasury is consulting on plans, originally proposed in this year’s Budget, to restrict the personal allowance ­- currently £10,000 for all those born after 1948 – for non-UK residents if a significant proportion of their income is derived “overseas”.

Ronnie Ludwig, tax expert at Saffrey Champness in Edinburgh, said: “There could also be an impact for expat citizens who have chosen to live abroad, such as retirees. Unless a very high percentage of their income is derived from the UK, they could be caught in the net. They may find themselves having to rearrange their affairs in response to the new measures.”

Mr Welsh said: “This is where the issue of tax residency would become complicated. If, for example, your family home is in Berwick but you work in Edinburgh – not an uncommon scenario – then it becomes uncertain as to which tax treatment you would receive.

“The situation is similar to Northern Ireland and the Republic of Ireland, with many living on one side and working on the other. Each of the separate jurisdictions would have to look at residency rules to determine where your main home is and whether you are resident there.”

ORIGINALLY PUBLISHED IN THE HERALD SEPTEMBER 2014, COPYRIGHT IONA BAIN ©

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Thirty unless it’s super dirty: my tip for the #Thriftyfamily campaign

IONA BAIN

As part of Scottish Friendly’s #Thriftyfamily campaign, I’ve been asked to share some of my choicest moneysaving tips – we’re going to focus on a super easy way to cut energy bills, plus five other helpful strategies

Laundry porn for the girls…

smeg washing machine - smeg you so smart, putting the sink with the washing machine, and so pretty is pastel too

And here’s one for the guys…

This is littarly the coolest washing machine EVER! #neon #want

These are some of the coolest washing machines ever. But (ironically) my post today is all hot hot hot…specifically, why do they make washing machines with ridiculously hot settings?

You know what I’m talking about: a 90 degree setting for all you people who must also have a time machine that takes you back to the 70s – when people worked down coal mines.

Unless you happen to be working or living in particularly dirty conditions, it is so not necessary to wash your clothes on such a high heat.

Why not make it your ambition to wash all clothes and linen on a 30 degree wash over the next month? You can save quite a bit on your utility bills and be an ecological hero to boot.

After all, keeping our homes cosy this winter will get a lot harder once the inevitable round of energy price hikes kicks in. The average family has seen costs of gas and electricity go up by 6 per cent, a chilling rise that’s driven many to switch off the heating altogether.

But don’t resort to drastic action if you can help it. As well as turning down your washing machine, here are 5 sensible ways to cut those soaring bills.

1  It’s pointless to have the central heating blasting away when nobody is at home. Make sure your timer only switches itself on when you need it to.  But always keep some heating on if you’re away from home in winter – burst pipes will be far more costly in the long run.

2  When you are in the house, turn down your thermostat one degree – keeping the temperature below 20 degrees can chop £55 off your heating bills a year. Pop on a cardigan or jumper if the temperature isn’t warm enough. Heating accounts for nearly half of all our energy costs so layer up to save a few pounds.   

3  You may have missed the boat on previous offers of free insulation from big energy companies. But it could be still be worth investing in. At a cost of £300, it should pay for itself in two years, since loft insulation slices about £175 off bills and cavity wall insulation another £125.

4  Put reflector panels behind your radiators. These silver sheets radiate heat back into your rooms and could shave 20% off your bills a year.

5  If you love a hot bath, make it a weekly, not daily, treat – and a five-minute shower would save you up to £20 a year on bills. Splash out on an energy-efficient showerhead – these are cheap to buy, yet save you around £75 a year.

And here’s one more extra tip for good measure:

IF THE WEATHER IS STILL FAIR, MAKE THE MOST OF IT!

Why don’t you share your money saving tips and be in with a chance of winning £100? Check out Scottish Friendly for more details and the latest money saving tips from Louie Spence!

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