Money News for Summer 2017
Bringing you the latest money news, plus hints and tips on how to make the most of what you’ve got this summer!
Fun in the Sun
At the start of the year, all the talk was of the falling pound and the growth of the staycation, but a few months on and it seems that, despite our weakened currency, we Brits are still determined to travel.
According to research by Sainsbury’s Travel Insurance & Travel Money, 60 per cent of over-55s are planning to holiday abroad this year – one per cent more than in 2016. If you’re in the ‘away’ camp, the most affordable destinations include Portugal, Bulgaria and Spain’s Costa del Sol, while, for long-haul travel, Tokyo comes top.
And the best way to pay while you’re on that well-earned break? There are credit cards, some of which won’t charge you a currency exchange fee or a fee for withdrawing cash (see Which for a list of the best).
Or for anyone who wants to lock in to a rate or who is on a strict budget, a prepaid card lets you load up with cash before you travel. You get the rate on the day you purchase your currency, and if you lose the card, your money is protected. The only downside is that they are not accepted everywhere.
Go to Money Saving Expert for an up-to-date list of the best on offer.
Hot on the heels of the new pound coin and £5 note comes the polymer £10 note which will be issued in September. The replacement will be smaller than the current tenner but larger than the new £5 note. It will feature Jane Austen, following a campaign to get at least one woman’s face on British banknotes (currently an all-male preserve – apart from the Queen).
Another date to remember is 15 October, after which the round pound coin will cease to be legal tender. So make sure you turn out your pockets and look down the back of the sofa!
LISA can help the grandkids
With interest rates on even the best accounts still low, it’s not surprising that we’ve lost the savings habit. However, the new Lifetime ISA (LISA), which became available on 6 April, might change that. Designed for 18 to 40-year-olds, it allows individuals to save up to £4,000 a year, with deposits made before their 50th birthday attracting a 25% bonus (up to £1,000 per year) from the government.
According to The Share Centre, the LISA has the support of parents and grandparents, with 64% of investors over 40 saying they will encourage their children or grandchildren to use it. And two thirds say they'd give younger family members money to pay into a LISA.
To find out more, go to gov.uk and search for Lifetime ISA.
Less Splash the Cash
Since the 1970s, there has been talk of a ‘cashless’ society and now, almost 50 years on, it looks as if it’s happening. In Sweden, for instance, only 20 per cent of retail transactions are now in cash, with buses, trains and many bars and restaurants, all refusing it.
On the other side of the globe, South Korea’s central bank is aiming for the country to go cashless by 2020. And in the UK in November last year, £2,903.2m was spent using contactless cards. That’s an increase of 183.5 per cent on the previous year.
So, as the trend gathers momentum, is your money safe in the ‘tap and go’ economy? According to the most recent statistics, the amount of money lost to fraud is 0.7p for every £100 spent on contactless – that’s less than on non-contactless cards. Plus, you’re fully protected against fraud losses on a contactless card, as long as you’ve acted reasonably to keep your card safe.
Savers didn’t find much to cheer about in Chancellor Philip Hammond’s Spring Budget. Having promised in the Autumn Statement that National Savings & Investments’ new three-year bond would offer a ‘market-leading return’, Mr Hammond confirmed that it would, in fact, pay a rate of 2.2 per cent – that’s lower than many regular savings accounts already offer.
The bond allows savers to invest a maximum of £3,000 tax free and is designed to be held for the full three years. Anyone cashing in all or part of the bond early will lose 90 days’ interest on the amount cashed in.
State Pension - Changes to Come?
The triple lock, introduced by the Coalition Government in 2010, meant that the state pension would increase by 2.5 per cent, inflation or earnings (whichever is highest) each year until 2020. However, last November, the Chancellor called for a review of the costs of the guarantee.
There is also a debate about whether pensioners should be protected when those of working age are not. Either way, Mr Hammond has said that no changes will be made to the triple lock until 2020. The review is planned for next year.
The Telegraph says the Financial Conduct Authority plans to change the rule that makes financial companies exempt from the Equality Act. This means they will no longer be able to discriminate against older customers.
Car insurance premiums rose by 9.4% in the 12 months to February 2017 – that's four times the rate of inflation. The average premium now stands at £661 a year.
Did you Know?
- 77% of over-45s have considered giving a loved one power of attorney*
- 41% have put this in place by the time they reach age 75*
* Aegon research: Headlinemoney 3 March