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.
Why it pays to be a kid
While many of us are struggling to get more than 1.5% on an easy access account, you can earn twice that if you’re aged under 16 (and even up to 6% if you pick the top-paying account).
Research by the savings website Savingschampion.co.uk found that the average rate on children’s easy access accounts has stayed pretty constant at around 2.68% since 2011, whereas the average rate on an equivalent adult’s account has fallen from over 2.2% to 1.34%.
What’s more, children can earn interest tax-free, because they get a personal allowance in the same way that adults do. That means that unless a child earns more than £10,600 a year (in the current tax year), they can ask to get interest from their savings paid without the tax being taken off.
SAVVY TIP: In case you’re a parent who’s thinking of putting loads of money into your child’s account to get tax-free interest, be aware that HM Revenue and Customs’ rules mean that you can only pay in enough to generate £100 a year (per parent) tax free. Assuming an interest rate of 2.68% (the average for an easy access child’s account), you could each pay in up to around £3,500 a year.
Fancy doing the chancellor’s job?
Less than two weeks after the election, the chancellor, George Osborne, confirmed that there will be an extra summer Budget on July 8th, and this week the government launched a survey to find out what we’d like to see in the Budget. It’s not a wind up or a spoof (I did check it wasn’t a spam email!).
If you’d like to submit your ideas, you have until June 5th to do this. You can fill in a survey or – if you prefer – email your ideas to firstname.lastname@example.org
Deflation – good or bad news?
Prices are falling. It’s official. Not some advert for a sale but government statistics that show that inflation, as measured by the consumer prices index (CPI) was -0.1% in the year to April.
If you’re a shopper, falling prices are a good thing – surely – as your money will go further? But, there have been a lot of headlines this week about why deflation can be bad news.
My view? I’m not an economist, but it seems that the main reason we’ve got negative inflation (strictly speaking it’s only really deflation if it lasts for some time) is due to the fall in the price petrol/diesel and food. And those prices are likely to rise again in the future – probably sooner than we’d like!
Those who argue that deflation is bad for the economy say that it puts people off spending because they wait for prices to fall further. But, in the short term at least, I’m not so sure. You can’t put off filling up your petrol tank or doing the weekly food shop because prices are falling!
Most economists expect inflation to increase again later this year, when prices will – once more – start to rise.
Letting fees become clearer
From next Wednesday, letting agents will have to display the fees they charge to landlords and tenants clearly. The change in the rules is part of the Consumer Rights Act, which is coming into force on May 27th. This is good news as there have been a number of complaints about agents who aren’t upfront about their charges.
Letting agents will have to display these fees in their offices and on their websites. In Scotland, letting agents can’t charge tenants a fee for registering with them or for letting them see a list of properties (although this is not illegal in England or Wales).
Agents will also have to say whether or not they’re members of an ombudsman scheme and, if so, which scheme they’ve signed up to.
Dying Matters week
I know that none of us wants to think about dying, but it’s much better to plan ahead than to leave it for your partner or family to sort everything out. This week it’s ‘Dying Matters’ week, which aims to raise awareness of the importance of sorting out your finances and talking to your family about things like the kind of funeral you’d like and what should happen to any pets you have after you’ve died. Here are my six top tips to make sure you’re prepared:
- If you don’t already have a will, it’s a really good idea to get one. I know it’s a bit grim to think about your own death, but having a will is the only way you can decide who gets what after you’ve gone.
- If you have a will but it’s years old, check it to make sure it’s up to date. It’s particularly important if you’ve got married (or remarried), got divorced or had children since it was written. A will gives you the chance to appoint guardians for your children should both parents die.
- Plan ahead if you own pets. Quite a few animal charities will let you leave them your pet in your will. You’re normally encouraged to make a donation for this (to cover the costs of looking after it in the short term) and the charity will normally try and rehome your pet.
- Think about the kind of funeral you’d like. If you’d rather be cremated than buried, it’s much better that you tell your family than that they have to work out what you’d like for themselves. You can write down your preferences, but it’s a good idea to keep this document separate from your will as your will may not be read until after your funeral.
- Don’t forget online accounts. If you have lots of social media or online accounts, it may be difficult for your relatives to close them down. But if you’d prefer to engage with your Twitter followers or Facebook friends after you’ve died, there are several platforms that let you send a last message (not sure if that idea’s great or grim!).
- Always destroy any old wills you have and tell those who need to know that you’ve made a new one and where it is. That way there’s less likely to be any disputes.