Beating the 1% Rate

ukdebtadvisor    20/02/2010 10:25:29

If you're a saver, then you might find yourself a little hard done by of late. Interest rates have plummeted to all time lows and it’s had a knock on effect to what banks can offer you. It's not uncommon to have a saver with a measly payout of just 1% AER, but it is still possible to get better. The key thing to saving is considering all of your options – a small 1% might not seem like a lot, but if you have a large sum than it can really make a difference. If you're looking to get a savings plan together that beats the measly 1% rate, then here's two ways of doing it.

Investing

It's no secret that it's been a very bumpy ride on the stock markets since the credit crunch began back in August 2007, and they have rarely been on the up since. However, with the recession as good as over, and availability of credit seeping back into the economy, it's likely that the stock market will see some growth during 2010. You probably won't want to put all of your cash into shares, as it's possible their value will go down and you won't be able to free up the cash, but should you want to invest, then around 50% of your cash should used as a maximum. If you don't have more than £1,000, then it's probably best not to bother and wait until you have a larger sum accrued. The key thing to remember about investing is that it's for the long term – don't go thinking you’re a market trader without some serious amounts of experience and expertise, which you will probably never accrue unless you work in finance!

ISAs

If you're intending on saving small amounts of cash, or you want to invest in shares and you don't have a large cash deposit, then an ISA is nearly always the best option. ISAs are tax free, so all interest gained goes straight to you. If you're looking for a stocks and shares ISA, take a look at Legal & General. Here are your options with ISAs.

Saving Cash – Maximum deposit of £3,600 in a financial year

When you're looking to save cash, then the best rates are likely to be from ISAs, as you won't have to pay tax on your interest. However, the maximum you can place in cash into an ISA during any one tax year is £3,600. You can also invest in shares/equities if you choose.

Investing in shares with an ISA

You can invest up to a total of £7,200 per tax year in shares with an ISA. £7,200 is the maximum you can invest combining cash and shares, so if you deposited £3,600 into a Cash ISA, you'd only have £3,600 to spend on shares, should you wish. If you didn't deposit any money in cash, then you'd be able to invest the full £7,200.

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5 Successful Techniques to Get Rid of Credit Card Debt

ukdebtadvisor    20/03/2009 13:04:27

Has your credit card debt become unmanageable? If yes, what should you do? How can you free yourself from debt and utilize that money for other requirements, investments or savings? Following are some easy techniques that you can apply without the consultation of a costly financial advisor.

Step 1: Discontinue your credit cards 
The most effective technique to minimize your credit card debt is to discontinue your cards altogether. It is not essential to bear more than one credit card, therefore select the card that has the minimum interest rate and discontinue the others. This card must be used for emergency purposes. You can keep this card with you but don’t use it too often. One good advice is to label the card: for emergencies only.

Step 2: Transfer your balances   
When you carry more than one credit card, you can transfer the balances from a card that has a higher APR to a card with less APR. This would reduce the amount of money you are paying for the interest and help you become debt free sooner.

Step 3: Snowball your credit card debts
Make a list of your credit card debts and write down the monthly payments against each of them. Pay back the lowest amount in the beginning. Then utilize the funds to begin repaying the second lowest amount. Go on doing this until you are debt free.  

Step 4: Make a priority of your debt repayments
One of the most useful means to repay your debts is to eliminate the debt that has the highest rate of interest. This can help you save an even higher amount than that of snowballing. If the calculation is confusing, don't get dejected. Take the help of a debt reduction calculator. Simply key in your figures and get the outcomes easily.

Step 5: Think about Consolidation
If you are a homeowner, you might wish to consolidate your credit card debts through a home equity loan. Because a home equity loan is a form of secured loan (your house can be seized if you default), the interest rate offered to you would be lesser than your credit cards. Payment of a cheaper rate of interest is beneficial at all times. Moreover, the interest paid for your home equity loan is tax deductible that is not applicable for credit cards.

By adopting these techniques, you can manage and get rid of your credit card debts fully.

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Why are credit card rates on the rise?

ukdebtadvisor    16/01/2009 18:08:20

More of you have got in touch to say that despite official interest rates coming down, some of your credit card rates are actually going up.

After Robin Ralia complained about his Amex card, we had a flurry of messages from viewers wondering why they have been targeted.

Sue McGie reports that interest on her Sainsbury's Visa card has gone up 5% to 18.95%. And Anthony James has been been hit by a 6.5% hike from HBOS, pushing his rate up to 21%.

What's going on? It's partly that individuals are being picked off by credit card providers. And it's partly that average rates have been on the up as well.

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Mortgage rescue plan is extended

ukdebtadvisor    16/01/2009 18:06:29

A scheme aimed at stopping thousands of vulnerable people losing their homes is being extended across England.

Not-for-profit housing associations will buy homes from people struggling to pay their mortgage and then allow them to continue living there.

The government says the £200m scheme could help up to 6,000 households which might otherwise face repossession.

Northern Ireland, Wales and Scotland have, or soon will have, their own initiatives in place.

The English scheme is one of several initiatives launched or expanded to help homeowners in the downturn.

The programme was devised last year by the National Housing Federation, which represents England's housing associations, and the Council of Mortgage Lenders.

It was already in place across 80 local authorities in England, but will be rolled out across the country from Friday.

Scotland has had a similar scheme since 2003, from which more than 700 households have already benefited.

The Scottish government has said it plans to extend its existing mortgage-to-rent scheme, as well as developing a new mortgage-to-equity programme, which will help some owners keep full possession of their homes while substantially reducing their debt.

Wales also has a mortgage rescue scheme in place, involving housing associations registered with the Welsh Assembly government.

Northern Ireland's department for social development has issued a consultation document on setting up such a scheme, but has still to launch it formally.

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House sales 'continuing to fall'

ukdebtadvisor    16/01/2009 18:04:27

Property sales fell even further in December, according to the latest survey from the Royal Institution of Chartered Surveyors (Rics).

The average number of sales per estate agency fell during the three months to December to 10.1, down from the 10.6 sales level reported a month ago.

Rics said this was the lowest level since its survey started in 1978.

Separately, the government's own house price survey said prices in the UK had fallen by 8.6% in the year to November.

It showed that the fall in prices accelerated during the autumn, taking the price of the average UK home down to £199,732.

The survey is published by the Department for Communities and Local Government (DCLG), and is based on a sample of 50,000 completed house purchases each month.

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