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THIS MONTH’S STAR LETTER ★
SAVING FOR MY CHILD’S FUTURE
In January 2003, you featured my daughter Savannah, then aged five, in a feature about investing for children. With the launch of Junior ISAs last month and all the surrounding news on the importance of saving for children, I wanted to give you an update and let you know how much your advice has helped us build up savings for her. She is now 14 and a keen tennis player.
We have been putting money into a regular savings account for her ever since we appeared in Moneywise, and by saving a small amount each month, she now has a portfolio of £30,000 which has built up from small regular savings as well as birthday and Christmas gifts. These are in a spread of savings and investments, from lowrisk building society accounts right up to high-risk emerging market funds. One high-risk fund has lived up to its growth potential and has done really well for her: the £25 per month has now grown to over £10,000.
We’re going to keep on saving towards any further education costs because I don’t really want her to have to start her working life with big debts. I believe the best time to start saving for kids is when they’re born, so you get into the savings habit early and don’t miss the money. ALISTAIR ELLIOTT/BRIGHTON
Moneywise replies: Congratulations on your disciplined approach to saving – we’re glad to hear it’s paying off. With rising tuition fees and sky-high deposits needed by first-time buyers, it’s more important than ever to start saving for your child’s future from an early age – and the best way to do this is by putting away a little each month, as you have done.
The introduction of Junior ISAs last month filled the gap created by the end of the child trust fund and offers tax-free savings for your child. As Savannah was born before the launch of the child trust fund, she’s eligible for a junior ISA and this could be an option.
COSTLY CREMATIONS Savannah and her financially savvy father Alistair Elliott as they appeared in Moneywise in January 2003
n response to deputy editor Ruth Jackson’s blog in November’s issue of Moneywise on the extortionate costs of funerals, I think: too true. I’m appalled that the average cremation now costs £2,720.
I would like to know whether you are sure that donating your body to
Blog of the month: HOW I GOT AN 8% SAVINGS RATE
BY JOHANNA GORNITZKI BY
For years, I’ve been unhappy with my current account provider, Barclays. It’s not much worse than any other bank, but after discovering it wrongly added payment protection insurance to my graduate loan nearly 10 years ago when I was fresh out of university (yes, I got my money back!), I promised myself I would eventually switch. But other commitments meant I only recently switched to First Direct.
There were three things that convinced me to pick the HSBC spin-off. Firstly, it came top in our Customer Service Awards this year, in which more than 12,000 of you voted. Secondly, it offers £100 to switch, and if you change your mind it even offers you £100 on leaving.
However, it was the third reason that really made my mind up. In these times of low-interest rates and soaring inflation, I am forever in search of a savings account paying a decent interest rate. And First Direct’s 8% Regular Saver, which is only available to its current account customers, was like a shining rates and soaring inflation, I am forever in search of a savings account paying a decent interest rate. And First Direct’s 8% Regular Saver, which is only available to its current account customers, was like a shining beacon to me.With the current top-paying regular saver paying just 4.1% (West Brom BS), getting hold of an account paying twice that is pretty unheard of.That was it, I was sold.
First Direct is not the only bank offering preferential savings rates to ‘loyal’ customers – for example, Santander offers a 5% fixed regular saver to all its current account holders. Many banks also offer preferential to all its current account holders. Many banks also offer preferential loans and mortgage rates to their existing customers.
loans and mortgage rates to their existing customers.
The lesson in this is that, yes, shopping around is
The lesson in this is that, yes, shopping around is important when choosing important when choosing a financial product, but so is checking you’re not missing out on any deals from your current bank or building society.
a financial product, but so is checking you’re not missing out on any deals from your current bank or building society.
It’s hard to fathom in the world of financial
It’s hard to fathom in the world of financial services, but someservices, but some-
times customer times customer loyalty does actually pay.
loyalty does actually pay.
8 MONEYWISE | DECEMBER 2011
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YOUR LETTERS: EACH MONTH THE READER WITH THE BEST LETTER WINS £100 IN M&S VOUCHERS
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Write to us (including your name, address and telephone number) at: Letters, Moneywise Publishing, Standon House, 21 Mansell Street, London E1 8AA.
Or email us at firstname.lastname@example.org Alternatively, you can air your views at moneywise.co.uk on our blog or forum pages. Web medical research will avoid the need for a cremation. Will the medical school pay for cremation after it has taken the bits that are useful to it? ROGER GILBRAITH/EMAIL
Ruth Jackson replies: If you donate your body to a medical school, it will arrange a cremation once it has finished with it, at no cost to you or your family; or it can be returned to your family for a private burial – but then they will be back to square one costwise. I’m not sure what the cost is to medical schools for cremations, but I’m sure they get a bulk discount.
If you are interested in leaving your body to your local medical school,
For all the latest news and updates from the Moneywise team, follow us on Twitter: @moneywiseonline
Become our friend on Facebook at facebook.com/ moneywiseonline you need to write a letter of consent signed by you and a witness. The letter should then be kept with your will and you should make sure your family are aware of your wishes.
You can find out more from the Human Tissue Authority at hta.gov.uk.
UNCHARITABLE SMALL PRINT
My wife and I are both pensioners and have been members of the National
BOOK GIVEAWAY Slow Finance by Gervais Williams £11.84 Drawing on the principles of the Slow Movement, which advocates a return to local, sustainable ways of living, Slow Finance advocates local investment over speculating in ‘bubble markets’. To win one of 10 copies, send a postcard with your name and address to ‘Slow’, Moneywise, Standon House, 21 Mansell Street, London, E1 8AA by 10 January.
Trust for a number of years. We pay our annual subscription by direct debit and receive notification each year of this amount. This year, I turned over the renewal notice to discover on the back (in small print) that there is a reduced subscription for pensioners available on request. The subscription is not reduced automatically and the only way to get it is to request it.
It seems to me the National Trust is being less than transparent, and is taking advantage of the fact that few people will read this kind of detail. GT SMITH/SURREY
Moneywise replies: We got in touch with the National Trust and it said: “We are very happy to apply the reduced rate to those who meet the criteria, but among other things, there are some practical reasons why we can’t do this automatically. However, we do endeavour to advertise the rate where we feel it is appropriate to do so – for example, on membership renewal reminders, which we do encourage members to read to ensure their details are correct and up to date.”
Web Poll: DOYOUTHINK IT’S FAIR THAT SOME CHILDREN ARE EXCLUDED FROM OPENING JUNIOR ISAS?
66% NO:The account should be available to every child
34% YES: Children with child trust funds got cash handouts – they can’t expect to have their cake and eat it
Total votes: 261 Online from Monday 7 to Monday 14 November
Ann-Eryl Pendleton: No, I certainly don’t think it is fair. I was ready to open JISA accounts for my five-year old and three-year old and was horrified to read that those with a current CTF were not eligible. R. Bellamy: Responsible parents who invested in CTFs for their children’s future should not now be penalised by being denied access to a JISA. At the moment, the interest rates on CTFs are an insult to our children. The banks are taking advantage of this money, which is effectively locked in for 18 years. Where’s the incentive in saving for the future? Guest: Although I believe the CTF should be able to be transferred into a JISA, I would like to point out that I was excluded from the introduction of CTFs because my son was just too old. Therefore I can’t wait to open one of these new accounts for him.
DECEMBER 2011 | MONEYWISE 9