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.
Budget – the bits you may have missed
The Chancellor’s decision to raise the personal allowance and higher rate tax threshold in the Budget grabbed all the headlines, but – as ever – the Budget small print makes an interesting read!
In 2020 the first Child Trust Funds will start maturing, so the government is going to consult on what will happen to the millions of pounds saved in them. Child Trust Funds were introduced for children born from September 2002, but then abolished for new customers in 2011. But many parents still have them.
Your child can’t take the money out before their 18th birthday, but you can transfer money in a Child Trust Fund to a Junior ISA, if you want to. Why would you? Well, if you have money in a stocks and shares Child Trust Fund, you could probably get a better deal (namely, pay lower charges) if you moved it to a Junior ISA. If it’s a cash Child Trust Fund, you may be able to get a better interest rate.
Fancy a flutter on Premium Bonds? If you’ve fancied buying Premium Bonds from NS&I but have been put off by the £100 minimum, there’s some good news. The Chancellor announced that the minimum amount you have to buy will fall to £25. This change will come in by the end of March next year (I’m sure there’s something else fairly major happening then…?).
Also in the Budget, the Help to Buy equity loan will run until 2023. It had been due to end two years earlier. At the moment, there are two limits on how much you can use the loan to buy a property – one for the London and another for the rest England. In the future, there will be regional price caps based on the price of an average first-time buyer’s property.
SAVVY TIP: The Help to Buy equity loan works by letting you borrow up to 20% of the cost of a newly-built property, from the government. You don’t pay any interest for the first five years, but you pay back the percentage of the property’s value you borrowed. So, if you borrowed 20% of the property and it cost £250,000 when you bought it but £300,000 when you paid back the Help to Buy loan, you’d repay 20% of £300,000, not £250,000.
Why you need a digital directory
Have you got a digital directory? Well, most people don’t, so don’t worry if you’ve never heard of it! It’s basically a list of your online accounts. If you’re wondering why you’d need one, it’s to make life easier for those who have to sort out your finances after you’ve gone.
If you have a will, it’s your executors who’ll do this job – either a family member (or two) or a solicitor. If you don’t have a will, it will normally be someone from your family.
Sorting out someone’s legal and financial affairs after they’ve died can be difficult enough. But trying to track down online accounts when there may be little or no paperwork is harder still.
A digital directory should include the names of the companies you have online accounts with (whether that’s a bank or building society, social media or things like PayPal and Skype). But it doesn’t need much more detail than that.
Don’t write down any passwords (obviously!) and you don’t even have to include account numbers. Once you’ve drawn up your digital directory, just make sure you tell your executors or family where it is.
Train ticket discounts
A new railcard for millennials will be on sale before the end of the year. It was trialled earlier this year after being announced in the Budget last year. After some delays (well, it is a railcard after all!), it will go on sale in the next few months.
It will cost £30 and will give people aged between 26 and 30 a third off most rail fares, except during the morning rush hour. At the moment, those aged 16 – 25 can buy a railcard to give them money off fares, but once you reach 26, you can’t use it.
The new millennial railcard will be digital, so you’ll have to download it to your smartphone via the Railcard app. The good news is that if your phone runs out of battery, you can load it onto someone else’s phone, but there won’t be a paper version of the card.
But, if you’re no longer in your 30s, what rail discounts are available to you? First off, there’s a ‘family and friends’ railcard, which also costs £30 for a year. That gives a group of you (up to four adults and four children aged between five and 15) a third off the price of adult tickets and up to 60% off the cost of children’s tickets.
If you regularly travel with your partner or a mate, the ‘two together’ railcard gives you a third off the cost of most rail fares. It also costs £30 for a year.
Once you reach 60 you qualify for a senior railcard, There’s also a disabled person’s railcard, costing £20 a year. With all the railcards, there’s either a minimum fare or no discount during morning peak time.
SAVVY TIP: You can normally buy these railcards for three years instead of one, which works out cheaper. Senior, student and family railcards cost £70 for three years, compared to the full price of three one-year cards of £90. The disabled person’s railcard costs £54 for three years.
Gender pay gap falls – a bit
The gender pay gap for full-time workers is at its lowest level, at 8.6%. That means that a woman who works full time earns 8.6% less per hour – on average – than a man. It’s not to be confused with equal pay, which is a legal requirement to pay women and men the same rate if they do the same job or a job of similar value.
The gender pay gap arises when companies have far more men than women in senior or high paying roles, or because work that women often do (such as caring and hospitality) tend to be low paid.
If you look at the overall gender pay gap, based on what full time and part-time workers earn, women earn almost 18% less per hour than men, on average. But the gender pay gap headline figure doesn’t really tell the full story.
The gender pay gap is almost non-existent for employees in their 20s and 30s. But once women reach 40, the it increases quite sharply, reaching 23% for women in their 40s and 26% for women in their 50s.
Over £20 billion in lost pensions
New research shows that over 1.5 million pension pots worth around £20 billion, worth around £13,000 each, are ‘lost’. That means they’re pensions that haven’t been claimed and their rightful owner has either forgotten about them or can’t be traced.
With people swapping jobs more frequently, it can be easy to forget to update all your previous employers if you move home. Although some pension schemes communicate by email, many still rely on the post for annual statements and other important information about your pension.
If you do lose track of a pension, there’s a free government service called ‘Find Pension Contact Details’ that can help you track it down. You can use it for both workplace and personal pensions. It won’t actually find the money for you, but – as the name implies – it will give you up-to-date contact details for your pension scheme so you can find out what you can claim.
Don’t just type ‘lost pension’ into Google because you may end up on the website of companies you have to pay to use.