Sarah Pennells is a personal finance journalist and the face behind SavvyWoman.co.uk. We think she does a great job at explaining financial subjects in a very clear and accessible manner. You can find her column below where she writes about the latest financial news, and helps you get more from your money.
Help to buy ISA
The help to buy ISA goes on sale this week – the tax-free account that’s designed to help first time buyers save a deposit. Here’s are ten things you need to know about help to buy ISAs:
- You can pay in up to £200 a month, and you can pay in an extra £1,000 when you first open it. If you don’t pay in £200 one month, you can’t carry that over until the next month. The maximum you can save is £12,000.
- You only take out one help to buy ISA. It’s not like with a cash ISA where you can take out a different one every year – although you can transfer your help to buy ISA to a different bank or building society to get a better rate of interest.
- You have to be aged 16 or over and a first time buyer (namely, you can’t have owned a home previously or own one now). You can’t take out a help to buy ISA jointly, but two people buying a house together can have a one each.
- For every £200 you pay in, the government gives you an extra £50 at the end of the term. If you pay in the maximum of £12,000 the government will give you £3,000.
- You must pay in a minimum of £1,600 to get a bonus at all. If you save less than £1,600 and close your account, you won’t get a bonus from the government.
- You can take out a help to buy ISA with whichever bank or building society you want to (it doesn’t have to be the bank you have your current account with) and you don’t have to take out a mortgage with the bank you have your help to buy ISA with.
- You’ll only get the bonus when you buy a property. Your solicitor applies for the bonus and it’s paid direct to your mortgage lender.
- You can use it to buy a property costing up to £250,000 outside London or up to £450,000 in London.
- You can’t have an ordinary cash ISA in the same tax year as a help to buy ISA. If you have a cash ISA that you’ve either taken out or paid into since April 5th this year, you can transfer up to £1,200 of the money you paid in this year to your help to buy ISA. If you have paid in more than £1,200 since April you’ll have to transfer the rest into a stocks and shares ISA or an ordinary savings account.
- You can take money out of your help to buy ISA before you find a home, but you can’t put it back in again.
Help with water bills
New figures from Ofwat, the water regulator, show that more people are struggling to pay their water bills, and many are unaware of schemes designed to help them.
Ofwat’s report shows that over one in ten people (11%) spend more than 5% of their income on water and sewerage bills. It also says that the debt advice charity National Debtline has seen a 10% rise in the number of people who are contacting it because they’re in arrears with their water bill.
Fewer than one in ten (9%) of people know about schemes like WaterSure and Welsh Water Assist – which can help people on a low income with their water bill.
SAVVY TIP: If you’re struggling with your water bill, contact your water company. It may be able to put you on a social tariff. If you don’t get anywhere, contact Citizens Advice or a debt advice charity for help. It’s worth knowing that water companies can’t cut you off if you can’t pay your bill (although different rules apply if you’re a business).
What kind of Christmas shopper are you?
Do you leave your Christmas shopping until the last minute or has it all been bought and wrapped since the summer? New research shows that a third of us (34%) are organised shoppers, while 14% describe ourselves as panic buyers.
One in ten are self-confessed Scrooges – not spending money on presents at Christmas, while one in 20 leave it to their partner. A further 20% either shop online or in the sales. If you’ve not yet started your Christmas shopping, here are my five top tips:
- Don’t assume the discounts the shops shout about the loudest are the best! The biggest bargains are often available on Christmas day or just after. If you’re not going to see your friend or relative until after Christmas, you may as well wait.
- Get your Christmas decorations out before you head to the shops so you can check to see what you already have. You’ll probably find you have more than you remember!
- Use loyalty points, voucher codes and special deals to make your money go further.
- Sign up for newsletters with your favourite retailer (you can always unsubscribe after Christmas) as you may get extra discounts and access to sales before anyone else.
- Pay by credit card if you can (but don’t use this as an excuse to splash out!). That way there’s some protection if the shop goes bust or if the goods don’t arrive or aren’t as described and the shop doesn’t want to know.
Let the tax man put your in the Christmas party mood!
If you’re going to your works Christmas party and wondering why your employer hasn’t laid on more than a couple of screw-top bottles of wine and bags of crisps, for once it’s may not be because of the tax man!
HM Revenue and Customs rules say that employers can spend up to £150 on parties (for each employee, not in total!) and it won’t incur any tax. The £150 is the maximum they can spend during the tax year, not just at Christmas.
The figure of £150 includes transport (and accommodation, if that’s offered) as well as food and drink. So, on second thoughts, if your Christmas party is in a swanky venue, £150 each might not go very far!