Premium Bonds: How many Premium Bonds can you buy?

Premium Bonds are owned by around 22 million people who have saved more than £86 billion in them. Given the upcoming financial crash expected in the wake of the coronavirus pandemic, many are looking to buy as many bonds as possible. But how many Premium Bonds can you actually buy?

What are Premium Bonds?

Premium Bonds are a National Savings and Investments (NS&I) product where each £1 you invest is given a unique number.

All numbers are then put into a draw each month to win cash prizes.

For a chance to win a tax-free prize worth between £25 and £1m, you forfeit an interest rate.

This means the money you invest will not grow interest while invested, but you are in with a 24,500 to 1 chance of winning.

It is a lottery which means there is no guarantee you will win anything at all and your money is not protected from the reductive effects of inflation.

But NS&I is backed by the Treasury so your cash is safe.


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Who are Premium Bonds suitable for?

According to the NS&I, Premium Bonds are best suited to savers who:

  • Want the chance every month to win a £1 million jackpot and other tax-free prizes
  • Have £25 or more to invest
  • Want 100% security for their money
  • Want to make the most of tax-free investment opportunities
  • Want to buy them as a gift for a child under 16.

How do you buy Premium Bonds?

The minimum Premium Bonds investment must be at least £25 and in whole pounds.

You can buy Premium Bonds online using the NS&I website here and paying using a debit card.

You can also purchase Premium Bonds over the phone using the NS&1 phone line on 08085 007 007 which is open from 7am to 10pm each day.

You can also buy Premium Bonds by post, by completing an application form and sending it to the NS&I with a cheque payable,

You can find the application forms depending on who you are buying the Bonds for here.

Once you have purchased some Premium Bonds, you can set up a bank transfer or standing order to buy more bonds.

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How do you buy Premium Bonds for children?

You can buy bonds for yourself or for a child under 16 as a gift.

Until the child’s 16th birthday the parent or guardian nominated on the application looks after the Bonds, regardless of who buys them.

You can buy Premium Bonds for your own child or someone else’s child in any of the manners outlined above.

If buying for your own child, you will need to be registered first.

If you are buying for someone else’s child, only the nominated parent or guardian will be able to manage and cash in the Bonds.

How many Premium Bonds can you buy?

The maximum holding you can have with Premium Bonds is £50,000.

This means any numbers over £50,000 will be ineligible to win prizes.

If these numbers win prizes in error, NS&I has the right to reclaim the prize.

How to check if you have won a Premium Bond prize each month

Prize winners are typically notified in writing if they have won a prize, although the winner of the £1m jackpot is told in person.

You can check if you have any recent or missed prizes on the NS&I website here.

To check if you have an outstanding prize to claim by entering your bond holder’s number and selecting which month you wish to check.

There is also a free tracing service for keeping track of old bonds here.

You can opt to have your prizes paid directly into your bank account or automatically reinvested into more premium bonds.

Source: Read Full Article

Self-employed scheme warning: Extension called for as ‘efficient action is needed’

The Self-Employment Income Support Scheme (SEISS) was created by the government to provide financial assistance to those who work for themselves. The scheme provides similar levels of support provided by the furlough scheme for PAYE workers.


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While there has been no announcement yet, it is fairly probable that Rishi will extend SEISS if the context calls for it.

Recently, he extended the furlough scheme to October and when he originally launched the self-employment scheme it was highlighted that it will be extended if need be, as quoted from the chancellor of the exchequer: “The government will pay self-employed people, who have been adversely affected by the Coronavirus, a taxable grant worth 80 percent of their average monthly profits over the last three years, up to £2,500 a month.

“This scheme will be open for at least three months – and I will extend it for longer if necessary.”

Despite the likelihood of an extension, there may still be fear among the self-employed that the funding scheme will close as May comes to an end.

There have been plenty of reports and “murmurs” of a coming announcement and Ed Molyneux, the CEO of FreeAgent, has commented on how impactful this could be: “The clock is ticking but the government has yet to give any indication that it will extend the emergency scheme set up to help self-employed people by paying up to 80 percent of their earnings.

“As funding is due to expire at the end of the month, there could be a massive income drop ahead for small businesses and independent workers who rely on this scheme to keep them afloat.”

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While there are more employed workers in the UK, the impact of the self-employed cannot be understated.

In April, the ONS released figures which showed just how vital the self-employed are to the country’s economy:

  • At the end of 2019 there were more than five million self-employed workers in the UK
  • Self-employed people represent 15.3 percent of all employment in the UK, up from 12 percent in 2000
  • The self-employed support some of the UKs most vital industries, including construction, transportation, agricultural and related trades and media


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Worryingly, the same figures showed that 10 percent of the self-employed are aged 65 or over, compared with just three percent of employees.

This means that if the support scheme were to end, it could put some of the country’s most vulnerable people at risk (at least in terms of coronavirus risk).

Ed went on to comment on how important it is for people within this category to know where they stand: “Over 1.5 million people currently use this funding, so it is vitally important that they know what will happen in the weeks and months ahead.

“Small business owners are a catalyst for innovation in the UK, but in order to survive this period, they desperately need protection and support.

“While things are slowly heading towards a ‘new normality’, many small businesses are in no position to support themselves as they are either not operating fully, or cannot legally operate at all.

Because of the delicate situation, he concluded by calling on the government to not underestimate the consequences of inaction: “Efficient action is needed from the government at this time, and this must go hand in hand with clear communication.

“I urge the government to remember the delicate situation that many business owners are facing and not forsake a funding extension for any reason; the result could be catastrophic for our small business and freelance sector.”

Source: Read Full Article

Child Benefit: Built up NI credits can be transferred under these conditions – check now

Child benefit claimants will get National Insurance credits while they’re receiving the benefit. This will continue until the youngest child in the family turns 12.


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The credits will be automatically added to a National Insurance account when Child Benefit is claimed.

Claimants will not need to take any action to get the ball rolling.

To claim Child Benefit, a CH2 claim form will need to be completed and sent to the Child Benefit office.

The government encourages parents to apply for Child Benefit even if they don’t need the payments due to these National Insurance boosts.

National Insurance contributions are needed to receive state pension, with 10 years as a minimum needed to get any amount.

The full amount will require at least 35 years of contributions.

So long as 35 years of contributions are collated and the person meets all eligibility criteria, they’ll get £175.20 per week from their state pension.

It can be difficult for some people to reach the 35 year limit but in some instances, a person claiming Child Benefit within the household may be able to help with this.

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Child Benefit claimants with excess National Insurance credits will be able to transfer them to a partner so long as they aren’t working, are on a low income and are not paying their own contributions.

Transfer claims of this nature can be made on a yearly basis after the end of each tax year.

There is a specific government form (CF411A) that will need to be completed to do this.

It is also possible to transfer National Insurance credits to someone else within the family.


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People may transfer National Insurance credits to a:

  • Sibling
  • Grandparent or
  • Other direct family member

Transfers of this nature can occur if the person being transferred to takes care of the child in question for at least 20 hours a week.

Child Benefit payments themselves can be quite generous, potentially providing thousands of pounds a year in some instances.

People claiming for a single child will receive £21.05 per week.

Additional children will bring in an additional £13.95.

Originally, Child Benefit could be claimed from as soon as the child’s birth was registered but this has changed in recent months due to coronavirus.

It can now be applied for even if the claimant has not registered the birth as coronavirus has forced all General Register Offices to close.

Source: Read Full Article

State pension: Tens of thousands of women could be getting less than they’re entitled to

The paper from Sir Steve Webb, published today by pension consultants Lane Clark & Peacock, asks whether thousands of older women are missing out on some of their state pension entitlement. The issue appears to be particularly acute for older married women who may not realise that they had to put in a claim for a higher pension when their husband turned 65.


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However, it’s suggested that other married women may encounter problems, such as some widows and divorced women, and for the over 80s.

According to the research, in some cases, women affected could be owed backdated payments which run into thousands of pounds.

It’s estimated that the total amount owed could reach as much as £100million.

The issue affects a set of women covered by the “old” state pension system – meaning those who reached state pension age before April 6, 2016.

Under this system, married women could claim an enhanced rate of state pension when their husband reached the age of 65, in cases where they only had a small state pension entitlement in their own right.

The same rules applied to widows and divorced women.

At current rates, the pension that a married woman can claim based on her husband’s record of National Insurance contributions stands at £80.45 per week, although this is provided that their husband was receiving a full basic state pension.

This is 60 percent of the full basic state pension rate of £134.25.

Married women on low pensions should have been awarded this 60 percent rate automatically when their husband turned 65, since March 2008.

However, before that date, they needed to claim the uplift.

Data obtained in a Freedom of Information request submitted earlier this year by LCP partner Steve Webb to the Department for Work and Pensions (DWP) suggests that many tens of thousands of married women who would be eligible for this rate are not receiving it.

Sir Steve, a former Minister of State for Pensions, said that in the majority of cases it seems likely that this is because they have not actively claimed the uplift.

However, the pensions commentator said that in some cases it “will reflect the failure of DWP computers to automatically award the uplift”.

It’s understood that in situations where women needed to make a claim, should they do so belatedly, they can only backdate their claim for 12 months – meaning any uplift for the years prior to this is lost.


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In addition to gaps for married women, the paper identifies other groups who may be missing out. These include:

  • Thousands of widows who appear to be on very low state pensions, well short of the expected rate for a widow claiming on her late husband’s record;
  • Thousands of divorced women who should, in principle, be benefiting from the ability to ‘substitute’ the NI record of their ex-husband for the period up to the end of their marriage;
  • Thousands of women aged 80 or over who should in principle be entitled to an £80.45 pension on a non-contributory basis provided that they satisfy a simple residency test.

LCP says it’s difficult to put precise figures on the numbers missing out, but estimates that tens of thousands of women are being paid less in state pension than they’re entitled to.

To help married women identify if they may be entitled to an increase, LCP has launched an online calculator.

It allows women to enter details about their age and state pension receipt and that of their husband.

Sir Steve is now calling on the government to investigate this issue as a matter of urgency, and urging them to automatically uplift the pensions of those who are entitled.

The pensions commentator is also calling for a review of the 2008 rule change which means those who became entitled to a higher pension before that date can only now backdate a claim for 12 months.

The problem was initially highlighted following correspondence from readers of the website This is Money to its columnist Steve Webb.

Commenting, he said: “It is truly shocking that thousands of women are being short-changed on their state pensions.

“The system is highly complex and few will be aware of the special rules for married women, widows, divorced women and the over 80s.

“Yet each of these groups seems to be losing out in different ways.

“Whilst DWP is willing to put things right on a case-by-case basis when individuals get in touch, there is clearly a systematic problem here.

“It is time for the DWP to take this issue seriously and launch a full investigation into how so many women have been missing out for so long.”

A DWP spokesperson said: “We are aware of a number of cases where individuals have been underpaid state pension.

“We corrected our records and reimbursed those affected as soon as errors were identified.

“We are checking for further cases, and if any are found awards will also be reviewed and any arrears paid.”

Source: Read Full Article

Does a Lifetime ISA affect benefits? Changes to account rules have come into effect

The Lifetime ISA is an account which offers eligible savers the opportunity to deposit up to £4,000 per tax year in it. The government pays 25 percent on the savings, up to £1,000 per tax year.


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It may be that savers opt for this type of account in order to get their foot on the housing ladder.

Meanwhile, others may opt to open a Lifetime ISA in preparation for retirement.

It’s possible to hold cash or stocks and shares in a Lifetime ISA, or to have a combination of both.

In a bid to recover the government bonus received on original savings, withdrawal charges apply if the saver withdraws cash or assets for any other reason than one of three exceptions.

For example, a person can withdraw money from the account without fee if they’re:

  • Buying their first home
  • Aged 60 or over
  • Terminally ill, with less than 12 months to live.

Otherwise, they would need to pay a withdrawal charge if they took any amount out for any other reason – something which is known as an “unauthorised withdrawal”.

This has previously stood at 25 percent, however temporary changes have been introduced recently during the coronavirus crisis.

Currently, the charge is 20 percent.

It will revert to 25 percent on April 6, 2021.

The new withdrawal charge of 20 percent was announced by HM Treasury on May 1, 2020.


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However, the rule change will be backdated to March 6, 2020.

This means that if a person has been charged at the former rate of 25 percent since then, the difference will be paid back into their Lifetime ISA.

“Contact your Lifetime ISA provider if this does not happen,” the website states.

So, does having savings in a Lifetime ISA affect benefits eligibility?

Having savings of a certain amount may affect whether a person is able to claim some benefits payments, and this includes those in a Lifetime ISA.

In the case of Universal Credit for example – a payment which is replacing six legacy benefits – a claimant and their partner must have £16,000 or less in savings between them in order to be eligible.

This means that some who have saved money in a Lifetime ISA or other savings accounts over the years may not be able to claim the payment.

It’s possible to use an independent benefits calculator in order to check what benefits a person could get, and some may choose to use this if they’re not eligible for Universal Credit.

There are a number of these signposted on the website, with these being calculators hosted by Policy in Practice, entitledto and Turn2us.

Users of these tools will need a number of pieces of information, and this includes details about savings, income, outgoings and existing benefits and pensions – as well as council tax bills.

Source: Read Full Article

Santander warns online banking users to never reveal this information – not even to staff

The coronavirus crisis has brought much of the UK to a standstill, with stringent lockdown measures remaining in place, although there has been some slight easing in the rules in England recently. With the population being urged to stay at home as much as possible, many have made a number of lifestyle changes, and for some, this means an increased usage of the internet.


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From socialising to shopping, according to Santander UK, more than half (54 percent) of over 55s are using more online services since the start of the pandemic.

However, the number of over 55s who continue to shy away from using digital banking has remained the same, with almost one in five (16 percent) of those choosing not to use their bank’s digital services to manage their money.

Furthermore, 64 percent of those who have never banked digitally have shared their concerns about security.

It’s a trend which is reinforced by Santander’s own data.

The bank has seen more than 250 million logins online and mobile banking since the pandemic began.

However, over 55s have initially been slower than other age groups in trying digital banking in the same period.

The figures show there has been a 40 percent difference in uptake of the digital services between 35 to 54 year olds and the over 55s in the first two weeks after the pandemic was declared.

Chris Ainsley, Head of Fraud Strategy, Santander UK said: “It’s great to see that over 55s are trying out new digital services to help them overcome some of the challenges created by coronavirus and their use of our online chat service is really welcome.

“For those who feel confident and comfortable after experimenting with other online services, then now is a perfect time to put digital banking to the test.

“It’s secure, saves time and is a convenient way to manage your day-to-day finances, particularly during the pandemic.

“For those who don’t have access to the internet or who simply aren’t comfortable managing their money online, then we’re always happy to help over our phone lines or once it’s safe to do so again, in person in branch.”

With nearly one third (64 percent) of over 55s who don’t bank online blaming security concerns, compared to 42 percent of under 34s, Mr Ainsley has shared some top tips for securely managing money via digital banking.


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Among the tips are warnings about some behaviours which online bankers are urged to never do – such as enter online banking details after clicking on an email or text message, as it may be that this is a phishing or smishing attempt.

Another thing customers should never do is reveal some personal information passwords – and this includes sharing the One Time Passcode (OTP) which they will be given.

No shortcuts

“Don’t be lulled into entering your online banking details after clicking a link in an email or text message,” he said.

“If you’re logging in to online banking, type the full address into your web browser.”

Keep it a secret

“Never share your One Time Passcode (OTP) with anyone, not even Santander staff,” Mr Ainsley said.

Sharing isn’t always caring

While remembering a plethora of passwords can be tricky, the Head of Fraud Strategy at Santander UK warned against doing this when it comes to digital banking.

“Keep your login details safe at all times,” he said. “Avoid writing them down and don’t share them with anyone.”

Leave them out in the cold

“Received a call you weren’t expecting? Never let a cold caller talk you into giving them access to your device or downloading software.”

No shortcuts

“Don’t be lulled into entering your online banking details after clicking a link in an email or text message.

“If you’re logging in to online banking, type the full address into your web browser.”

Stay on top of it all

“Install the latest security updates to your system software as they become available.”

Over and out

“Using public WiFi? Make sure you fully log out of online and sign out of the mobile app once you’re done.”

Source: Read Full Article

Furlough pay: What happens to your pension pots if you are furloughed?

Furlough pay is given to members of the UK workforce where business has been significantly affected by the coronavirus pandemic. Sectors such as hospitality and retail came to a crashing halt when a lockdown was enforced, forcing these businesses to close their doors. But what exactly happens to your pension pots if you are furloughed?

The Chancellor of the Exchequer Rishi Sunak last week confirmed a quarter of the UK employment market are now receiving furlough pay.

This equates to a staggering 7.5 million workers whose jobs the Government hopes it has protected through the Coronavirus Job Retention Scheme.

The Government’s scheme sees businesses apply for grants to cover 80 percent of an employee’s salary up to £2,500 plus National Insurance and pension contributions.

However, some have raised concerns about how the Government’s furlough pay compares to their typical pension arrangements and the subsequent long-term impact on their pensions.


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Until the end of July, the Government will cover salaries up to £2,500 a month which is equivalent to the UK average annual salary of £30,000.

The scheme will also replace a three percent employer contribution into staff pension pots on earnings between £520 and £2,500 a month.

The Government’s furlough scheme will only match the usual employer contribution to three percent, even if this amount is usually higher.

Under current laws, UK employees aged older than 22 earning more than £10,000 a year are automatically opted into a workplace pension scheme.

This essentially means a portion of their salary is saved into a pension chosen by their company.

The Government and employers then top up these payments to incentivise employees to save for their pensions.

The current rules require employees to pay in five percent of their salary and their employers to pay in three percent.

The rules differ if you are on a defined benefit pension scheme which is also known as a final salary scheme and do not apply to those who are self-employed.

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Workers can opt-out of the auto-enrolment scheme.

However, they are often advised to continue to pay into pensions to guarantee their comfort in retirement.

The current State Pension amounts to just £9,110 a year and not everyone is eligible for the full State Pension amount.

Only those who have reached State Pension age and made the necessary National Insurance contributions throughout their lives can receive this payment.

Pension contributions will potentially be affected by the furlough period.

Financial experts advise continuing to pay into your pension if you can afford to do so.

Unless you continue paying at least the auto-enrolment minimum of 4 percent of salary into your pension, you will lose out on free Government cash topping this up to eight percent.

You should also avoid harming your chances of a comfortable retirement because of what might be a serious but short-lived setback to your finances.

Legally, employers are required to continue paying into a pension scheme for members of staff.

Some workers will previously have benefitted from their company paying above the Government’s statutory requirements.

Maike Currie, director for workplace investing at Fidelity International, said the Government will only fund the cost of the minimum legal employer contribution at three percent and employers have to cover the cost of any additional payments.

Employers struggling to meet these contribution amounts may opt to temporarily scale back payments.

But once an employer returns to work and is taken off furlough these payments should revert to their original amounts.

Any firm with more than 50 staff which desires to permanently reduce their pension contributions, is required to undertake a 60-day consultation process by the Pensions Regulator.

Source: Read Full Article

Estate agents open: Can I go to a house viewing now? What are the government guidelines?

The Government has said 450,000 people have been unable to progress their moving plans since the lockdown was enforced. Since March 23 all non-essential businesses have closed their doors to the public. Estate agents fell into this category and have been working remotely.

Many estate agents have been speaking to clients over the phone or on video calls rather than in person.

But this has now changed with the relaxing of the lockdown restrictions.

New rules put into action from Wednesday, May 13 have changed the way estate agents are interacting with clients.

The new regulations do not specifically refer to estate agents and moving home.

READ MORE- Moving house guidance: What are the guidelines, am I allowed to move?


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They include:

  • People are now permitted to undertake unlimited exercise outside their homes.
  • People can visit one person outside their household if they maintain social distancing.
  • Mandating the public wear face coverings in crowded places.
  • Members of the same household are allowed to undertake sports outside their home together.
  • Everyone who is unable to undertake their work from home should return to the workplace.
  • Pupils will return to school gradually with Reception, Year 1 and Year 6 returning from June 1.
  • Childminders can return to work as part of the Government’s plans to enable employees to return to the workplace.
  • Public transport should be avoided as much as possible, instead, people are advised to drive, walk or cycle as much as possible.
  • Pubs, restaurants and other hospitality business must remain closed until the beginning of July at the earliest.
  • Reopening non-essential shops including hairdressers and beauty salons will only be done.

Can I go to a house viewing now?

While the work of estate agents and moving home isn’t directly mentioned in this list, viewing properties can now be classified as a reasonable excuse to be outside your home.

Both buyers and renters are now permitted to attend property viewings.

The government has advised that home movers should conduct the majority of their searches online, but you will be able to meet up with an agent for a viewing.

Viewings will be arranged by appointment, and social distancing measures will apply throughout the entire meeting.

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Both viewers and estate agents must wash their hands as soon as they enter the property, and it is advised that you bring your own hand sanitiser.

Viewers and agents should wear a face mask where possible, and avoid touching surfaces in the property.

Current occupants should vacate the premises if they can, to minimise contact with other households.

After each viewing, property owners or tenants should clean the surfaces and door handles.

Access to hand-washing facilities should be granted, and separate towels or paper towels should be provided and either immediately washed or disposed of after the meeting.

Are estate agents’ officers open?

Estate agents offices are allowed to reopen. However, the government has asked companies to adhere to a set of workplace safety rules. Find them here.

Clients are only allowed in the office with an appointment, and estate agents must ask if anyone in their household is showing symptoms before accepting the appointment or arranging a viewing.

Agents should offer a virtual house viewing to start with, only suggesting an in-person viewing when the buyer or tenant is considering making an offer.

Open house viewings are not allowed, and agents cannot drive clients to appointments.

Source: Read Full Article

Pension: Advice for both retirees and those still working – withdrawal warning

Pension income is both crucial and fragile. They are designed to provide stable payments for a person’s later years but this doesn’t stop them being affected by short term problems. Coronavirus has created a dilemma for a whole host of financial assets but most will, understandably, be concerned about their retirement outlooks.


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There is plenty of advice on how to manage this period but the insight offered can often focus purely on one area, not taking into account different perspectives.

Thankfully Ian Gutteridge, a Director at Premier, provided plenty of advice for both individuals currently saving for retirement and those already retired.

His first set of advice is aimed towards people who are retired and may feel constrained by limited income and employment options.

The advice here mainly concerned withdrawing funds and the potential ramifications.

You are in retirement and looking to cash in funds to meet expenditure needs

Ian started off by warning against cashing in funds from already struggling assets: “Be careful about cashing in large amounts from investment funds that have suffered losses in recent weeks.

“Believe it or not, some individuals use the start of the tax year to withdraw funds from their pension to meet future income needs.

“Sadly, the timing in the current market is not great. If cash is required, can you:

  • “Take it from any cash funds that may exist within your Drawdown pension pot, rather than investment funds designed to achieve medium term capital growth?
  • “Take it from other forms of investment, such as personal savings?”

Some people may not even have the ability to make withdrawals and for people in this position, Ian calls for a certain degree of patience: “If there is no option but to withdraw funds from your investment funds within your Drawdown pension plan, look to make smaller withdrawals, perhaps to tide you over for a couple of months and then look to review the position in June 2020.”

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You are in retirement and want to change the shape and nature of income generated from your Drawdown pension plan

It’s a common trait in humans that when negativity strikes, we must react to counteract it.

In light of this, some retirees may want to alter how they manage their drawdown affairs but Ian highlights that extra income may not even be necessary in the current environment: “It might sound obvious to re-do a budget planner; but in the current climate, income needs may have reduced.

“With Covid-19 ‘lockdown’, we cannot do the things we previously took for granted. We travel less and we spend less on socialising. We may actually have lower income needs.”

While pension problems may be primarily an issue for the retired (or those approaching retirement) there are still many things that can concern those still working.

Ian’s following tips concern those who are pension savers who may be tempted to dip into their pensions early or alter their contributions.


  • Pension scam warning: How to protect your retirement fund

You are still working and saving into pensions, but you’re thinking of cashing-in part of your pension savings

Ian continued: “Employees who are still saving into a pension scheme, might be tempted to cash in an old pension or part of their current pension arrangement.

Under Pension Freedoms introduced in April 2015, there is an encashment option called an Uncrystallised Funds Pension Lump Sum (UFPLS), which allows a pension saver to cash-in their pension in return for a lump sum.

“25 percent of the fund is tax free and the balance is subject to income tax. A pension fund of £10,000 would provide a lump sum of £8,500 to a basic rate tax payer.

“However, encashing a pension under UFPLS rules immediately triggers the Money Purchase Annual Allowance (MPAA). This restricts all future pension savings (whether these come from an employer or from the individual) to just £4,000 a year.

“If future savings are greater than £4,000 it is likely the pension saver will pay income tax on the excess savings over this amount. As a result, savers have to be very careful when cashing-in pensions.”

His final tips concern a tragic predicament; savers and workers who wish to contribute to a scheme but under the circumstances simply can’t.

You are contributing into a scheme, but money is tight and you need to reduce costs

Ian touches on the country’s less than stellar record for saving for the long term: “UK plc still has a long term saving problem and we should always try to maintain an adequate level of pension savings. However, if personal cash flow is tight, modern day pension plans will usually allow contributions to be reduced or even stopped, without penalty.

“If you save into your employer’s Workplace Pension Scheme, check with your HR Department whether you can reduce contributions. You may already be paying the minimum amount and there may be special rules if you reduce contributions further.

“If you save into your own personal pension plan, check with the provider that contributions can be reduced or even stopped without penalty and that you can restart contribution into the existing plan without any additional costs.”

In a concluding remark, Ian warned that any decision made should be thoroughly considered before action is taken: “Don’t take the decision lightly though, as the benefits of long-term saving and compounding interest and growth should not be underestimated – and contributions should only be reduced if really needed.”

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Mortgage: The first set of payment holidays will end next month – be aware of higher costs

Mortgage holidays essentially allow people to “pause” their monthly repayments for up to three months, although the payment freeze must be agreed with the lender. Rishi Sunak launched the scheme on March 17 in direct response to coronavirus issues.


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This scheme was followed up with other payment freezes concerning rent, credit cards and other debt obligations.

The scheme was welcomed by many who were worried about keeping a roof over their heads but those fears may come back soon.

As the scheme was announced and launched in March, some early claimants could see their mortgage holiday come to an end next month.

While it may be extended, current rules detail that mortgage holidays will have a standard length of three months.

The hope was that the economy and people’s finances would be back to relative normality following the break, however this may now be called into question as the country is still under strict lockdown rules.

If claimants are due to start covering their mortgage again from June, they will likely have an even costlier burden on their hands.

It has been revealed since the announcement that while the payments themselves would freeze, the interest generated would not.

This means following a mortgage holiday, claimants will have higher repayments with the added interest.

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Financial experts such as Martin Lewis have detailed that mortgage holidays should only be used as last resort because of this but they can still be applied for where needed.

Anthony Morrow, the CEO of OpenMoney, cautioned people currently considering a payment holiday: “I strongly recommend people approach any payment ‘holiday’ with an air of caution.

“While payment pauses should help ease immediate pressure, money will still be owed in the future – and in most cases with added interest.

“It’s important to remember that a mortgage holiday is a freeze and not an eradication. The money does need to be paid back and in the meantime economic conditions could continue to worsen for people.


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“Always read terms and conditions carefully and speak to your provider if there’s anything you’re unsure of.”

Thankfully, Anthony provided useful advice for those stuck with increased interest costs: “If you do find yourself having to cope with extra interest payments further down the line, you should do what you can to prioritise making those.

“If this applies to you, try your best to take a careful look at your finances and start to cut back on any unnecessary outgoings where you can.

This might mean cancelling some subscription services or cooking at home rather than ordering food in.

“Remember too that if you’ve got some cash savings, it could be a good idea to use these to help clear extra interest charges– as it’s likely the cost of this will be higher than the interest you’re making on your savings.”

As professionals and institutions started to analyse mortgage holidays, they also provided mortgage holiday “calculators”.

These tools can help people work out what they’ll owe in advance of taking the break and there are many of them freely available online.

Various public institutions have also updated their websites with information on mortgage holidays and impartial advice can be sought from the likes of the Money Advice Service, Citizens Advice and the Money and Pensions Service.

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