Thank you to everyone who has written to Moneywise over the past few months. We always find your contributions insightful, thoughtful and often entertaining. Here are a selection of your views.
Please keep your emails coming, to email@example.com
“I received a £200 Winter Fuel Payment”
My husband, who is about to retire in April, aged 66, came home from work today. I handed him the telephone number that was given, as well as giving him a pen and he called the helpline. Imagine our surprise when he was told that he would receive a £200 Winter Fuel Payment in March and another payment in September! Wow!
We have worked for more than 35 years and have never claimed any benefits, so we are really ecstatic about this result! Thank you to Moira and the team for allowing us, and many others, the opportunity to apply.
MP/ VIA EMAIL
Moneywise says: Please read our article on how to check if you are eligible for Winter Fuel Payments. But act fast, as you need to apply for this winter’s payment by 31 March 2017.
“Pleased with my investment portfolio”
I had no sooner finished my end of year Isa review when the January 2017 edition of Moneywise arrived on my doormat. It cheered me up no end. My 11 unit trusts had averaged a rise of 10.6% on the year. Your ‘Investment outlook for 2017’ piece told me that the FTSE 100 had risen by 11%, so I must have been doing something right.
My Mid Cap 250 fund had lost me 5%. Your ‘Asset Class’ performance table told me that this sector had not done well, so I can forgive it a 5% loss.
Meanwhile, seven years ago, I decided to invest in AXA Framlington Health – my theory was that I’d try and make some money in case I needed to spend on my health in the future. Three years ago, it had risen so much I split my investment and put half in the AXA Framlington Biotech fund. In May 2016, the funds had made me enough money to pay for an operation and save me a one-year wait on a Welsh NHS list. The Biotech fund has, however, lost 5% this year, so my dilemma now is do I move it or accept it’s a risky fund and wait it out? I know that, with the help of Moneywise, I’ll soon work out what to do for the best. Thank you, Moneywise, for all your knowledge and advice over the years.
“In hindsight, I’d have paid more into my pension”
My thanks to [Moneywise columnist] Jeff Prestridge for his article Hard graft and sacrifices are the secrets to financial freedom , and to his family for allowing him to make it personal. I wish him all the best with his retirement plans and his family’s good health.
His plan sounds very familiar. I was fortunate; my father is a very keen supporter of pensions and my employer took 10% from the day I joined. I worked 60 hours-plus a week to cover my wife looking after the children and we went without plenty knowing that I would retire early. I retired last year, age 53, from the bottom grade of a very average public sector job where the pension alone would give a very frugal existence.
But with hindsight, I would change my own story just a little. With interest rates so low, I should not have paid down the mortgage early. Instead, I could have maximised my use of the higher- rate tax breaks on pensions earlier and used the tax-free commutation on the pension to pay off the mortgage later.
While I sympathise with Jeff about starting his pension late and missing out on the effect of compound interest, for most people the later payments are those that attract most tax relief and, with today’s interest rates, that more than makes up for the lost compound interest. It’s never too late to save! No doubt Jeff will do the calculations, I hope to read his verdict. Retirement sucks… (NOT !)
“P2P is win-win for me”
I’ve moved almost all of my savings into diversified peer to peer (P2P) products. Hopefully, as well as getting greater returns, I’m also providing better lending rates to those who need a loan. Win-win; I get a higher rate [on my savings] and I feel slightly better as others get better loan rates.
Moneywise says: Go to our Peer-to-peer section for more information on how P2P works and our pick of the firms to use.
Living up to my childhood’s great expectations
You asked “What’s your biggest dream when it comes to retirement?”
When I was a little girl I wanted to be a writer. As a descendant of Charles Dickens, perhaps the desire to write is in my genes! I entered children’s story competitions and won several prizes. Because I needed to earn a living, I trained as a journalist and worked on newspapers and magazines for 25 years. Then I went into financial services, qualified as an independent financial adviser (IFA) and ran a successful mortgage advice consultancy for 10 years.
My father’s early death from cancer was the catalyst that shook me into action. If life could be that short, I needed to start writing that story that had nagged away at me for so long. I researched and wrote whenever I could, but it wasn’t until I retired that I managed to complete and publish my debut novel. I am now 67, and this project has taken me 30 years, but my life has taken on a new meaning.
Help to Buy Isa confusion
You advise using a Help to Buy Isa to pay towards a deposit on a first home.
I would suggest that it would be wise to clarify that the bonus is only received on completion of the sale, and as such it can only be used on the mortgage deposit, it cannot be used on the exchange deposit.
This is a significant issue for your younger readers. I’m sure they would appreciate advice on a get around – I know I would!
Moneywise says: Thank you for your email. This summer, we also published a blog highlighting this issue in detail.
Energy tool clarification
Moneywise says: One way to cut your energy bill is to check if you can save by switching. Use our free tool to do so. One reader has flagged that he saw a minus saving when he input his data: “Congratulations! You can save -£33 by switching”, and he queried if this was correct. Energyhelpline, the company that runs the tool, told us that savings are listed whether they are positive or negative – and that as the cheapest deals have gone up by about £150 over the last year, a negative result is showing up more and more as people are on the best deal possible and can’t save any more by switching. It is, however, looking to change the wording as the ‘Congratulations’ may be confusing.
“I aim to follow Warren Buffett’s advice”
In 2017, I aim to follow the advice of Warren Buffett and start compounding the interest income that comes from some of my investments.
JC/ VIA EMAIL
Moneywise says: Both savers and investors can enjoy the benefits of compound interest – where you re-invest any interest earned – but because investors will typically enjoy higher returns in the first place, the effects will be magnified with equity investments. For example, in year one, an investment paying 5% will pay £50 on a £1,000 deposit, but in year two it will pay £52 because that 5% is being applied to a new bigger balance of £1,050. If your investment continues to grow, as each year passes the compounding effect becomes greater.