Annuities - What are Annuities? Savings

Annuities - What are Annuities?

An annuity is a type of insurance policy that provides a guaranteed income for life when you retire in exchange for a lump sum. When you reach retirement age you will need to convert the capital that has built up in your personal pension policy for an annuity plan, which will provide you with regular income for the rest of your life. Where do I buy an annuity? You can buy your annuity from a number of providers and doesn’t have to be with the company you had your pension plan with. The amount of income you receive depends on the size of the pension fund and the annuity rate.  Annuity rates vary between providers and due to a sharp...
A Beginners' Guide to Savings Accounts Savings

A Beginners' Guide to Savings Accounts

Savings accounts are a wonderful way of putting money aside for the future, and are designed specifically for that purpose. Many people use savings account as a way of helping themselves afford a house or holiday in the future, while many treat the money in these accounts as ‘emergency funds’. What are the different types of savings accounts? There are numerous types of savings accounts, and it’s important to identify which is the most suitable for you. Easy-access accounts Add to or withdraw from your savings whenever you wish Interest rates may be low, introductory rates may drop As the name suggests, easy-access...
Premium Bonds Savings

Premium Bonds

Premium bonds are a product offered by the government through NS&I (National Savings & Investments). The essence of the product is that you put your money in a savings account and rather than earn interest on the savings account you are placed in a draw to win between £25 and £1million tax-free. The draws for winning the money take place monthly. Think of this like lottery tickets: Every £1 you put in the account gives you one ticket (or one bond). The minimum amount of money you can hold in premium bonds is £100 and the maximum is £50,000. Is my money safe? Your money is completely safe. The value of your premium...
Fixed Rate Bonds Savings

Fixed Rate Bonds

Fixed rate bonds 'fix' the interest. Unlike a standard bond, a fixed rate bond is a contract to repay borrowed money with interest set at a fixed rate over a specified time period. The interest rate is known as ‘the coupon rate’ and is paid at specific dates throughout the year, before the bond reaches maturity, and the initial investment is repaid. Is a fixed rate bond a high risk investment? The fixed rate bond is seen as a much lower risk investment, as it is not susceptible to fluctuations in interest rates. Having said that, when inflation is taken into consideration, it can be noted that the actual value of the bond can...
What are Bonds? Savings

What are Bonds?

A bond is a formal contract to repay borrowed money with interest with a floating rate of interest. It is in essence, a certificate stating that the owner has lent money to a borrower, which will be returned at a specific date. Bonds, like shares, can be bought and sold but unlike shares, they guarantee a percentage return, agreed at the point of investing. How often do I receive interest? A bondholder will receive regular interest – usually half yearly or annually. Unlike with investment tied to Stocks and Shares, which can often sound exciting, the term ‘Bonds’ is somewhat archaic and as such can put a lot of people off...
Transferring an ISA Savings

Transferring an ISA

Only some ISA accounts will allow transfers It is possible to transfer money from one ISA account to another if the ISA provider allows it, however this is a process that you must complete via the provider (usually a bank or building society). Do not remove your money from an old ISA and think that you can pay it into your new ISA. If you do this you will lose all tax-free benefits on the money. In order to make the transfer correctly you must ask your new provider for exact details of how to carry out the transactions. For most providers this will involve filling out a form and returning it to the provider. Can I open a brand...
Types of ISA Savings

Types of ISA

ISAs have a minimum age limit of 16 or 18 There are 4 main types of ISA - cash ISA, Stocks and Shares ISA, TESSA and enviromental ISAs. An Individual Savings Account is an account designed for the purpose of investments and savings with a higher interest and lower tax rate of those of a standard savings account. Savings are not subject to income tax or capital gains tax whilst in the account or upon withdrawal and so are often peoples first consideration when looking to start saving. There are currently a number of different types of ISA available to people in the UK. Cash ISA (mini ISA) This functions very similar to an...
What is an ISA? Savings

What is an ISA?

ISAs are a tax-free savings method A cash ISA is a cash savings account that allows savers to benefit from tax free interest whereas an ISA is a tax-free way of saving cash or investing in stocks and shares. ISAs are very similar to normal savings accounts and anyone aged 16 or over can open an ISA. What’s the difference between a cash ISA and a regular savings account? With an ISA you don’t pay tax on the interest earned With a cash ISA you can invest a maximum of £5,340 per tax year (April – April) If you withdraw cash from your tax ISA you can’t put it back without the amount being deducted from your maximum...
High Interest Savings Accounts Savings

High Interest Savings Accounts

High interest savings accounts often have a minimum period you have to lock your cash in for. When choosing a savings account it is very tempting to be persuaded by headline grabbing interest rates to park your money. However some high interest rates savings accounts come loaded with temporary interest hikes to lure new customers in and slapped down after a short period of time. In addition they come with a plethora of restrictions. What should I look out for when it comes to my high interest savings account? In order to get the best return on your money it is crucial to consider several factors before choosing a high interest...
Regular Saver Accounts Savings

Regular Saver Accounts

Regular Saver accounts often provide a higher interest rate than top savings accounts. A Regular Saver account is for those in a position to put money away on a regular basis, hence the name. Regular Saver accounts offer very good interest rates, but often impose restrictions such as limiting the amount of the withdrawals you can make and forcing you to make a deposit every month. The interest rates are high, primarily as an incentive to get you to save with a specific bank. Often, after an introductory period, your money is transferred to a basic saving account at which time it is often beneficial to look elsewhere. When to use...
Savings Accounts Savings

Savings Accounts

There are 4 main types of savings with high inflation and low interest rates it makes sense to seek out the best deals on your savings. Those who have not kept their finger on the pulse and switch accounts could well be losing money as the interest rates fall below the inflation rate. With so many savings accounts on offer it can be a minefield when choosing where to place your hard earned cash. Understanding the basics of savings accounts can help you choose the right savings account for you. What types of savings are available? Savings accounts fall into four broad categories: ISAs This is a tax free way of saving money. If...
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