Read our 10 most popular stories from June 2016
1. HSBC launches £200 current account switch offer - but you need £21k to get it
Current account users who switch to HSBC’s Advance or Premier accounts by 10 July can bag £200 cashback, but there is a catch.
2. Leave vote: What it could mean for your money, property and investments
After months of anticipation, UK voters have decided – in an historic move – to leave the European Union some 43 years after joining its predecessor, the European Economic Community, in 1973.
3. What does Brexit mean for pensions?
Following the news that the UK has voted to leave the European Union we ask what impact the move will have on your pension, whether you are years away, approaching retirement or already retired.
4. Will Brexit affect Brits buying homes in the EU?
According to UN figures, around 1.2 million Brits currently live elsewhere in the EU, with many located in France, Spain and Ireland.
5. HSBC launches UK's first sub-1% fixed-rate mortgage
Property buyers can now lock in a sub-1% mortgage for two years, as HSBC has launched the UK’s lowest ever fixed-rate mortgage at 0.99%.
6. TSB launches 1% credit card cashback: how does it compare?
New and existing TSB customers can earn 1% cashback on the first £500 of credit card spending each month from today.
7. Government to write to 100,000 people at risk of no state pension in retirement
At least 100,000 people will be sent warning letters to say they won’t receive a state pension if they do not make more National Insurance (NI) contributions before they retire.
8. Laptops: How to buy one on a budget
We survey the different types of laptop and explain how to cut the costs of buying one.
9. How safe is your 'gold plated' final salary pension?
The collapse of BHS has thrown the Pensions Protection Fund (PPF) into the spotlight and highlighted problems within occupational pensions. We find out what it means for members of final salary schemes
10. Oldest British Steel pensioners set to lose £10,000
The oldest and most vulnerable members of the British Steel Pension Scheme could lose more than £10,000 if proposals from the government get the green light.
A scheme originally established in 1944 to provide protection against sickness and unemployment as well as helping fund the National Health Service (NHS) and state benefits. NI contributions are compulsory and based on a person’s earnings above a certain threshold. There are several classes of NI, but which one an individual pays depends on whether they are employed, self-employed, unemployed or an employer. Payment of Class 1 contributions by employees gives them entitlement to the basic state pension, the additional state pension, jobseeker’s allowance, employment and support allowance, maternity allowance and bereavement benefits. From April 2016, to qualify for the full state pension, individuals will need 35 years’ of NI contributions.
Final salary pension
A defined benefit pension scheme is one where the payout is based on contributions made and the length of service of the employee. A typical scheme would offer to pay one-60th (0.0168%) of final salary (the one you’re earning when you finally retire) for each year of contributions to the scheme (even though these years were probably paid at a lower salary). Someone retiring on a final salary of £30,000 who had been a member of the scheme for 25 years would receive a pension of 42% of their final salary (£12,300 a year before tax). Sadly, many companies are winding up their final salary schemes or closing them altogether, meaning pension benefits accrued after a certain date (or those available to new employees) may be on a less generous money purchase basis.
An account opened with a clearing bank (few building societies offer current accounts) that provides the ability to draw cash (usually via a debit card) or cheques from the account. Some pay fairly minimal rates of interest if the account is in credit. Most current accounts insist your monthly income (salary or pension) is paid directly in each month and they offer a number of optional services – such as overdrafts and charge cards – which are negotiable but will incur fees.
Used by the holder to buy goods and services, credit cards also have a monthly or annual spending limit, which may be raised or lowered depending on the creditworthiness of the cardholder. But unlike charge cards, borrowers aren’t forced to pay the balance off in full every month and, as long as they make a stated minimum payment, can carry a balance from one month to the next, generating compound interest. As the issuing company is effectively giving you a short-term loan, most credit cards have variable and relatively high interest rates. Allowing the interest to compound for too long may result in dire financial straits.