Personal Finance Stuff » Savings

Retirement incomes are at a five year low says Prudential

Alan — Fri, 13 Jan 2012 13:19:20 +0000

UK insurance giant Prudential have revealed that those retiring in 2012 can expect to live on an annual income of £15,500, which is £1000 less, or 6% lower, than those who started their retirement in 2011. These figures come courtesy of Prudential’s Unique Class of 2012 research, which provides a financial insight into the financial expectations of Brits who are planning to retire within the next 12 months.

The results of this annual survey, which Prudential first carried out in 2008, show that the expected annual incomes for the retired have dropped by over 16% in the last 5 years. The retirees in the Class of 2008 could look forward to a total annual income, which included state, private and company pensions, of around £18,6000. That is £3100 a year more than those retiring this year will have.

In a sign of the on-going financial challenges facing those due to retire in 2012, one in five will get by on an expected annual income of less than £10,000. Meanwhile, around the country there is a regional disparity of more than £5,000 in expected retirement income. Londoners have the highest average expected incomes of £17,900, while those in Yorkshire and Humberside have the lowest at £12,800.

Fewer than two in five (37 per cent) of the Class of 2012 say that they have saved enough to secure a comfortable retirement.

Men are more optimistic about their retirement than women, with 45 per cent of men confident they will be financially comfortable compared with 31 per cent of women. However, nearly one in five (18 per cent) of those planning to retire in 2012 have no idea of the level of income they will need in order to live comfortably.

Vince Smith-Hughes, Prudential’s retirement income expert, said: “The current economic climate has created the perfect storm for people in the run up to retirement. The impact of the credit crunch, banking crisis, recession, and concerns over the Eurozone, has been reflected in the fact that expected retirement income levels have hit a five-year-low.”

“It is concerning that expected retirement incomes are going down, while pensioner expenditure is going up. However, there are some practical steps that workers and imminent retirees can take to ensure a more comfortable retirement. For those who are still working, it has never been a more important time to save into a pension. The longer that savings are invested in a retirement pot, the greater the opportunity they will have to grow.”

“However, even those due to retire this year could make their retirement funds generate better incomes. Consulting a professional financial adviser can help savers to make more informed pension saving and retirement income decisions.”

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Tips for saving money on driving expenses

Alan — Wed, 28 Sep 2011 09:00:38 +0000

Driving is becoming an increasingly expensive way to get around and people find that one of the major expenses is the annual car insurance premium. Most people will find that even if they are the perfect driver with a clean record that the price of insurance still goes up. Next year women are going to be facing even more expensive insurance as discrimination laws are going to make it illegal for women to get cheaper insurance because of their gender. Fortunately there are plenty of ways to lower the cost of your driving insurance; this article is going to look at some of the most effective methods.

First off it is a good idea to be aware that renewing your insurance with the same company does not mean it will be the cheapest option. It is a common assumption that if you go for an ‘auto renew’ option then you will be given a lower quote the next year. This is not necessarily so and drivers may find they can save hundred of pounds by switching insurer.

Gocompare.com is a website that allows you to compare the cost of insurers. John Miles, from the website has said, “My advice would be to take a look at the quote your current insurer gives you then get online to see if you can find a better deal. If you are switching, make sure you check you current policy and give then enough notice so that you don’t have to pay any cancellation fees.”

Our next tip would be to volunteer to pay a higher excess. Most insurers work on the method that if you have a lower excess payment – the amount you pay before your insurance covers the accident – the higher the premium.

For new drivers insurance costs can often be several times the cost of their car and this is because new drivers are, statistically, more likely to cause an accident. If you want to pay a lesser premium you may want to consider sharing your parents car, this way you become a ‘named driver’ on their policy, which is a much cheaper option. Do not think you can fool the insurers by saying your parents are the main driver on your car as this is illegal.

Another popular option for reducing insurance is for new drivers to take ‘Pass Plus’ lessons. This could once drop premiums for new drivers, but the AA says this is no longer the case. For older drivers this can reduce your premiums.

For those who cannot afford to pay for the entire years premium at one time consider using a 0% credit card rather than the monthly option offered by the insurer. You must be disciplined though and pay off the balance before the end of the 0% period, or you will face increasing debts.

If you are caught speeding you will find that the cost of the fine will only be a small part of the financial pain. The insurance companies know you have committed an offence and your insurance will jump spectacularly.

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Renewable energy from homemade energy systems

Alan — Thu, 04 Aug 2011 02:42:50 +0000

More and more people all over the world are deciding to turn to energy systems that are homemade and produce renewable energy such as wind and solar power in order to save on their utility bills. These are great sources of energy and will save the user a great deal of money over the long term and give them a source of power if the big blackout ever occurs.

Solar panels can either be purchased or homemade and if they are homemade a substantial amount of money can be saved. Each panel can cost up to £600 but if they are homemade with a guide that instructs the user step by step the total cost would be approximately £180.

By using these types of renewable energy systems like solar energy it can help to make the air and environment much cleaner. It also reduces substantially the cost of electricity bills each month. Plus if homemade systems produce more electricity that the user uses during the month, then the excess can be sold back to the grid company.

There are thousands of households around the country that have eliminated their entire utility bills with their renewable energy systems. Many instructions are available on line and offer step by step instructions that once downloaded can be used to build your own system.

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All is not even in the country’s saving habits

Alan — Wed, 25 May 2011 08:31:08 +0000

Recent savings research shows that south west London residents from the borough of Richmond have £30,000 in average savings while in Aberdeen they have an average of £26,000. There are other areas such as Edinburgh and Putney that have residents with savings of £20,000 or more according to the report from Halifax.

The South East and Greater London have 31 out of the top 50 postal codes with higher balances that any others. Moneynet rep Andrew Hagger said it is not surprising to see in the more affluent neighbors of the UK the accounts with the higher balances. The hope is that no matter where customers live, they still shop around looking for the best rates and that they make use of the ISA allowance.

With such high inflation and low interests rate is will be interesting to see the balances of the bank accounts a year from now to see if the savings have been depleted in order to maintain a certain level of living standards. The most recent spike in the cost of living means those higher rate taxpayers must find a savings account that will pay 7.5% to really receive a return after you take into account inflation and taxes.

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Northern Rock ISA

Alan — Thu, 02 Dec 2010 06:18:38 +0000

An ISA (individual savings account) is simply that: a savings account on which you do not have to pay tax on the interest your money earns, currently to £5,100 in one year. Possibly the best rates on the market at present are offered by Northern Rock with three new issues of fixed rate cash ISA’s. The accounts are available now, with a minimum deposit of £500, at fixed rates over a period of one, three or five years.

The fixed rate issues are 150, 151 and 152. Issue 150 offers 3.05% tax-free for one year, fixed to 15 January 2012. Issue 151 offers 3.5% fixed for three years to January 2014, and issue 152 offers 4.10% fixed for five years to January 2016.

New accounts can be opened through the post or through your nearest branch office. If you choose the post, you can download and print an application or fill out the application online, then print and post it with the required deposit to the Head Office. You can also transfer a cash ISA from another provider to Northern Rock.

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Save Up from Northern Rock

Alan — Wed, 24 Nov 2010 06:41:41 +0000

Northern Rock is introducing new savings plans for depositors who want to have the ability to access their funds without losing the benefits of yield from interest.

Save Up is a postal savings account that lets the depositor have access to his or her funds notice and fee free one time per month. Access after that first time in any given month will cost you. If you keep your account beyond a year, you are guaranteed an interest rate no lower than the Bank of England base up to the end of June 2013.

Transfers and deposits of up to £2 million per depositor can be deposited into a Save Up account and you can begin with as little as a £1 deposit. Interest can be deposited to your Save Up account or put into a different account. You have the option of choosing yearly interest payments (31 December) or interest payments at the end of every month. Your Save Up account can be managed by telephone or post.

The other Northern Rock savings account is the Rainy Day Saver. This is also a one year account but affords the same interest guarantee as the Save Up plan should you go beyond a year with the account.

Rainy Day Saver is a 120-notice plan. Transfers or withdrawals cannot be made without 120-day prior notice. A £5000 minimum is required with the Rainy Day Saver plan. If your account falls below the minimum, your interest rate will drop with it to just 0.1 per cent until it returns to the £5000 minimum.

Transfers and deposits of as much as £2 million can be put into the Rainy Day Saver account. Interest payments can be deposited to your Rainy Day Save plan or deposited to another account and can be made on the final day of each month or deposited yearly on 30 June.

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Irish banks problems concern 2 million in UK

Alan — Sun, 21 Nov 2010 07:20:50 +0000

Irish banks are in serious financial trouble and so could the more than 2 million UK consumers who save with them. Ireland’s three largest banks, Bank of Ireland, Allied Irish Bank, and Anglo Irish Bank are holding billions of pounds of UK money.

If the EU will not provide a bail out, some of these three Irish banks could balance on the edge of insolvency. If you have money in any of these banks it is important to know how much of it is protected and how much you might be able to rescue.

Because of its strong affiliation with the UK Post Office and its UK subsidiary, savers with The Bank of Ireland have some protection under the Financial Services Compensation Scheme. The UK based scheme protects up to £50,000 per saver. So, savers holding a joint account would benefit for as much as £100,000. This scheme, however, protects just a single plan. Therefore, if you have two different accounts with the Bank of Ireland, you would have protection for just one, up to £50,000.

If you have money in any of the other Irish banks, you would have no other choice than to claim under the Irish Compensation Scheme, and that gets sticky. Only certain types of accounts are protected under the Irish Scheme. Most instant access accounts should be covered to 100.000 Euros, while long-term deposits might not be covered at all.

If you are considering switching your funds from an Irish bank to a UK bank, talk to a financial professional to find out just how much risk your savings are currently under.

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Saving being dipped into at £100 each month

Alan — Sat, 06 Nov 2010 21:55:18 +0000

Savings are falling at an average of £100 each month, according to a recent report. Britons are dipping into their savings accounts to help with everyday expenses and things like buying for back to school.

Price increases on items like food, gas, and the other general expenses of living in combination with stalled growth and wages are sucking family bank accounts dry.

According to the statistics, over 33 per cent of households draw money to pay for living expenses, 11 per cent draw it for their kiddies, and another 31 per cent draw to fund holidays. It was also found that 20 per cent of British households draw from savings to pay back personal loans and debt.

As a people, we are strongly determined to clear our debt, but personal and family savings are being drained to do this and simply meet the cost of living. Many households are in danger of draining everything they have built up over the years.

The average worker has the equivalent of 40 days pay in available cash during a period when it takes an average of six months to replace a lost job.

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Energy saving tips for the house

admin — Thu, 24 Jun 2010 13:26:53 +0000

The Electrical Contractors’ Association (ECA) has published its Energy Saving Guide. The guide includes a series of money and energy saving ideas which, it is claimed, could potentially can save households £400 a year.

Here are the four simple steps put forward for energy saving by the ECA:

1. Install energy saving light bulbs – These are cheap and easy to install and can save up to £100 a year.
2. Set your thermostat correctly – Setting the thermostat between 18 and 21 degrees centigrade can save up to £65 per year.
3. Install and use heating and hot water boiler controls – This can minimize wastage, for example by only heating water at times when it is needed most (morning and evening) – this can take £100 a year off your annual heating bill.
4. Upgrade your boiler – After the initial investment, changing from a G-rated system to a condensing boiler could save £128 annually.
So those steps add up to about £400.

In additional, there are other energy saving tips which can save you money:

Additional savings can be made with these top-tips:

• Remember to switch-off – Leaving appliances on stand-by means they’re still using electricity so turn them off at the plug when not in use.
• Turn the light off – Encourage everyone to switch-off the lights when leaving a room; both simple and effective. Alternatively, you could always choose to install motion sensor lights.
• Consider updating appliances – Older, less efficient appliances could be costing you double in electricity charges so choose a model that has the European Union Energy Label or the European Eco-label to make sure you’re not paying over the odds. www.cus.net
• Make the switch – Choosing an A-rated model will be more economical to run and better for the environment.
• Choose your tumble-dryer carefully – Making sure to choose a high energy rated model. A Which? survey compared an A and C grade dryer and found the C grade cost £67.38 more per year to run.
• Fully load the machine – Both dishwashers and washing machines are more efficient when operating with a full load. A Which? survey found most modern dishwashers actually use less water than washing-up by hand.

For more information and to download the ECA’s guide to energy-saving, please visit: www.eca.co.uk

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Northern Rock removes 100 percent guarantee

Alan — Sat, 29 May 2010 08:45:49 +0000

As of 1700 BST 24 May, the 100 percent guarantee on funds in Northern Rock bank has been removed. Those with accounts at the bank will have their funds guaranteed up to a maximum of £50,000 per person, just like all the other banking institutions in the U.K that are regulated by the FSA.

The guarantee of 100% insurance was brought in by the government as a means of reassuring the public and preventing a run on the bank when Northern Rock collapsed in 2007. It was always intended as a temporary measure, and now that the bank has limited its guarantee some members will probably choose to move their accounts to other places where they may get a better rate of return.

Gary Hoffman, Chief Executive of Northern Rock, said that the 100% guarantee would remain in place after May 24 on accounts with fixed rates, opened while the guarantee was still in place, that have not reached the end of their term – in some cases more than two years. For example, if you opened a five-year fixed rate account in 2008; all funds will still be guaranteed until 2013.

The bank is still under government ownership at present, but it has been decided that Northern Rock is in much better financial shape and the additional guarantee is no longer needed. Mr. Hoffman noted that this is a positive indication and that the bank is now returning to “a level playing field.” Northern Rock will now be offering the same level of protection as all the other banking institutions not backed by the government.

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