HSBC LAUNCHES NEW 90% LTV MORTGAGE Potential first-time buyers will be flocking to HSBC to apply for the mortgage as it has gone straight to the top of the best-buy tables with a fixed rate of 4.49% for two years. It has a fee of £599.
BROADBAND JUST GOT FASTER The average broadband speed in the UK shot up by 22% last year, according to industry regulator Ofcom. The rise is being attributed to more consumers upgrading to higher-speed internet packages. In November 2011, the average speed was 7.6 megabits compared to 6.2 megabits a year earlier.
to more consumers upgrading to higher-speed
HALIFAX’S BEST BUY 6% JISA Halifax has launched itself into to the top of the JISA best buy tables with an account paying 6%.To get the rate a
HALIFAX’S BEST BUY 6% JISA Halifax has launched itself into to the top of the JISA best buy tables with an account paying 6%.To get the rate a parent must open an adult ISA with the bank parent must open an adult ISA with the bank otherwise the JISA will only pay a rate of 3%.
What’s hot What’s not
WATER BILLS ON THE RISE Average water bills in England and Wales will rise by 7.5% from April, taking the average bill to £376 per household. The rise is part of industry regulator Ofwat’s five-year plan to fund £22 billion of investments through annual rises.
Ofwat’s five-year plan to fund £22 billion of
QUANTITATIVE EASING IS BACK The Bank of England has announced it will be injecting £50 billion into the economy in another round of quantitative easing. This is the third round of money printing and could lead to increased inflation and a drop in bond yields, which will have a knock-on effect on pension incomes.
AVERAGE FAMILY DEBT APPROACHING £8,000 MARK UK families are among the most indebted in the world, owing an average of £7,900 in personal loans, overdrafts and credit cards, according to a report from PricewaterhouseCoopers.
and credit cards, according to a report from
10 MONEYWISE | MARCH 2012
Child benefit cut – why all the controversy?
BY RUTH JACKSON BY
Ever since Chancellor George Osborne announced plans to cut child benefit payments in October 2010, controversy has raged. Under the proposed plans, from April 2013 any household where one or both parents are higher-rate taxpayers will no longer be entitled to child benefit payments.
WHO WILL BE AFFECTED? The measure will affect people earning more than £42,475.They will lose out on the £20.30 per week paid in child benefit for the first child and the £13.40 a week paid for subsequent children. However, the big flaw with the plan is that two parents who both earn just under £42,475, so have a household income of around £85,000 will still be able to claim child benefit, while a family with only one earner and a household income of £42,476 will lose it.
WHAT DOES THE GOVERNMENT SAY? At present it seems that no one other than the Conservative party is prepared to support the plan. In fact, it has been so widely panned that many people are hoping it will be amended in the Budget this month. But Osborne is sticking to his guns for now.
panned that many people are hoping it will be amended in the Budget this month. But Osborne is sticking to his guns for now.
“We’re very clear that it is fair that those who are better off in our society make a contribution to the saving of money we need to make, so we will be removing child benefit from higher-rate taxpayers,” said Osborne in a who are better off in our society make a contribution to the saving of money we need to make, so we will be removing child benefit recent speech. “The principle that it’s not fair to ask someone who’s earning, say, £20,000 or £25,000 to pay for someone who’s on £80,000 or £100,000 to get child benefit is one that I think is very important.”
There’s no denying the fact the government needs to rein in its spending, and imposing a cap on child benefits would save the Treasury around £1 billion a year. But even David Cameron recognises that there are flaws in the plan, namely the cliff-like drop-off that penalises single-earner families.
“We always said we would look at the steepness of the curve, we always said we would look at the way it’s implemented and that remains the case,” David Cameron said recently.
AND THE CRITICS? The critics are up in arms over the fact that a household which collectively earns £85,000 get to keep the benefit whereas single-earner families with a household income of just £43,000 will be stripped of that extra cash. According to figures from NFU Mutual, about 680,000 families will lose out if child benefit is cut for higher-rate taxpayers, 180,000 of which will be families with only one breadwinner.These families will lose £1,750 a year if they have two eligible children.
Jill Kirby, a family expert and the author of The Price of Parenthood, has described the child benefit change as “anti-family”,adding that “it is out of touch with family life and just how expensive it is”.
WWW.MONEYWISE.CO.UK SPECIAL DEALS FOR MONEYWISE READERS
Budget 2012 predictions Steal of the month
TBY REBECCA RUTT BY
his year’s Budget will take place on 21 March and rumours are already circulating about what Chancellor George Osborne will announce. “There is a limited scope for manoeuvre as the economy has not grown as the government had hoped, but there may be a few ways in which the Chancellor can help families and individuals in the Budget,” says Stephen Barrat, spokesperson for James Cowper accountants. Here are our Budget predictions: While some things are certain, such as the increase in the personal tax allowance to £8,105 from April, it’s hoped Osborne will announce a rise to £10,000 from 2013.
Child benefit is to be abolished for higher-rate taxpayers, however, the childcare voucher scheme, which gives a tax break to working parents,
may be extended to cover other domestic workers in an effort to help stay-athome parents who may lose out once child benefit is stopped.
Most housing initiatives have already been reported, such as the Firstbuy scheme for shared equity on a new property.The first-time-buyer exemption on stamp duty will come to an end on 24 March but David Hollingworth, spokesperson for
London & Country Mortgages,
says it’s unlikely there will be anything further mentioned on this in the Budget. With regards to pensions, Carl Lamb, director at IFA Almary Green, says it should be a priority for the government to invigorate the personal pensions market.
“I would hope that the upcoming Budget takes a consistent approach in order to allow proper financial planning to take place and avoid confusing consumers further.
“The government is keen to have people save for their retirement but there must be an incentive there to do so and fewer restrictions,” he adds.
WIN A TASTECARD FOR A YEAR This month you could win one of five 12-month tastecard memberships.Your tastecard will enable you to enjoy a 50% discount or two-for-one across starters, mains and desserts in
The clocks go forward this month marking the official start to spring and hopefully the end to the cold weather. Celebrate the changing seasons with some of these money-saving deals.
Two dine for £20 at The Real Greek Two people can dine at The Real Greek for £20 until 29 February when you bring along a voucher that can be downloaded from the website. http://bit.ly/xJu04K
20% off your food bill at Henry’s Henry’s is offering 20% off food until 31 May between Monday and Friday. Certain branches are excluded. More details and the voucher are on the website. http://bit.ly/cIszkd
10% off tickets for London Zoo There must be a minimum of two adults and two children for this deal and the discount will be applied when entering the code 1234 at the checkout. Full details are on the website: http://bit.ly/zfB24P
20% off orders at Calendar Club Enter the code AFTW12 at the checkout to receive 20% off any orders at the Calendar Club. Full details can be found on the website:
£10 eye tests at Dolland & Aitchison Until 31 March you can get a £10 eye test from Dolland & Aitchison and 10% off a complete pair of glasses. Both vouchers can be downloaded from the website: http://bit.ly/wKG9y2
10% off SerenataFlowers SerenataFlowers has given Moneywisean exclusive 10% discount on all of its flowers until 10 March. All you need to do to qualify is enter the code ‘moneywise’ at the checkout. http:// bit.ly/ad93g thousands of restaurants in the UK and Ireland. You simply ‘flash’ your card at any participating eatery and your food bill will be automatically halved.
Restaurants throughout the UK include: PizzaExpress, Gourmet Burger Kitchen and Zizzi to Michelin-rated establishments such as those run by Marco Pierre White and Mark Baumann.
Anyone not lucky enough to win a full 12-month membership will be sent a one-month tastecard. For a chance of winning you need to enter your contact details at: tastecard.co.uk/comp/moneywise by 30 April 2012.
20% off bike tours at the London Bicycle Tour Company By entering the code 004BVCC11EGB at the checkout you can get 20% off the cost of a bike tour with the London Bicycle Tour Company. Full details are on the website: http://bit.ly/4tSm4L
MARCH 2012 | MONEYWISE 11