The Great Debate UK

from UK News:

Satisfied bank customer?

We're wondering who is.

We see bailed-out banks returning to profit at the same time as headlines about others still refusing to lend. The personal finance pages are bristling with stories about mortgage famine . Big businesses may have been overcharged for banks' services in raising new equity capital;  lending to smaller businesses is down, and the interest offered on savings is so derisory, would-be savers are being pushed into taking more risk to try to preserve their capital.

What are we missing? What is the magic ingredient that makes you as a customer happy with your bank? Or are we right in thinking "customer satisfaction" is a figment of executive imagination? Tell us your stories.

Tax year end – are you ready?

Rachel Mason is public relations manager at independent financial service providers Fair Investment Company.The opinions expressed are her own. Reuters will host a “follow-the-sun” live blog on Monday, March 8, 2010, International Women’s Day. Please tune in.-

With the end of the tax year fast approaching, now is the time to make sure all your finances are in order and that you are maximising all the annual allowances, reliefs and exemptions available.

Make the most of your ISA allowance – aged 50 and over, you’ve got an extra 3,000 pounds! You can’t carry your ISA allowance over into the next financial year, so if you haven’t made the most of it – use it, or you’ll lose it. The current limit is 7,200 pounds – all of which can be invested into a stocks and shares ISA or up to 3,600 pounds can be invested into a cash ISA with the remainder in stocks and shares.

But for those aged 50 and over, the limit is £10,200, £5,100 of which can be invested in a cash ISA.  This new limit, which came into force in October 2009, will be extended to all other ISA investors from April 6th 2010.

If you haven’t used your allowance, now is the time to do it, especially as Easter falling early means the last working day of the tax year is actually April 1st. Cash rates are pretty awful at the moment so it is worth looking at the range of stocks and shares ISAs available – choose from income or growth or a combination of the two,  paying close attention to the level of risk you are willing to take.

If you have already used your ISA allowance, but want to improve the administration, performance, fund range, or charging structure, you can still do an ISA transfer. If you have a stocks and shares ISA you can transfer into another stocks and shares ISA, if you have a cash ISA, you can switch to another cash ISA or you can transfer into a stocks and shares ISA. But, once you have moved a cash ISA into stocks and shares ISA, you can’t move it back. One half of a couple? Invest in the name of the one who pays the least tax

The plight of middle-aged investors

- David Kuo is director at The Motley Fool. The opinions expressed are his own. -

What is the one thing that young investors have but older investors would give their eye teeth?

This isn’t a trick question and nor does it have anything to do with body parts.

The answer is time. Older investors may have more money, more experience and more investing knowledge than younger investors. But the thing that older investors don’t have on their side is time – time to correct mistakes should anything go wrong with your investments.

In particular, time has to be a key consideration if your investment forms a vital part of your retirement portfolio. That is why older investors are regularly urged to rebalance more of their portfolios to less risky investment the closer they approach retirement age. If you are wondering how to rebalance a portfolio, there is a handy rule of thumb that may help. It’s only a rule of thumb so it will have limitations depending on the length of your digit.

It simply states that the proportion of your investment portfolio allocated to cash should be equivalent to your age expressed as a percentage. Put another way, you can afford to take more risk with your investment the younger you are. But as you get older you should start shifting more of your money into cash.

So, 25-year-olds should have no more than 25 percent or a quarter of their portfolios in cash; 33 year-olds should only have a third or 33 percent of their investments in cash, and so on.

Pensioners feel pinch from low rates

- Sharon Bratley is chartered financial planner at Fair Investment. The opinions expressed are her own. -

What does the decision by the Bank of England to keep interest rates at a record low of 0.5 percent mean for the average Briton in retirement?

Well, unfortunately things are not looking good for pensioners at the moment. The official rate of inflation may be on its way down, but in real terms inflation remains high, particularly for pensioners. This time last year, the cost of everything from gas and electricity to a loaf of bread cost less than it does today, and despite falling inflation, prices are slow to come down from their peaks of late last year.

Take energy bills for example – there are millions of pensioners living in fuel poverty, yet it is only in the last few weeks – as the summer months approach – that energy companies are finally bringing down their prices – although still at a fraction of the rate that they increased at.

Add to this the fact that RPI, which pensions are linked to has fallen to below zero, and it is no surprise that many pensioners rely on other savings and investments to supplement their incomes, which is why the failure to increase the base rate will come as a further blow to pensioners.

This time last year the base rate stood ten times higher than it is today at five percent, and savings account rates reflected this. But as the average no notice savings account rate is now 0.65 percent (according to Moneyfacts.co.uk), pensioners who are having to rely on their savings are finding themselves left high and dry.

Since interest rates tumbled from their heights of last year we have seen a change in both the economy and the way that consumers treat their finances. In recent months investment houses have been inundated with new applications for investment products as consumers turn their backs on conventional deposit accounts offering low returns.

Budget boost for savers

–Fay Goddard is chief executive of the Personal Finance Society. The opinions expressed are her own.–

As predicted, Budget 2009 was heavy on figures and forecasts and hard on the highest earners. Unsurprisingly it is the latter that the press has picked up on. We all knew that there would be a new top rate of income tax – though some were taken by surprise at the rate of 50 percent and the speed at which it will be introduced.

This wasn’t the only hit taken by those on big salaries with restrictions on pension tax relief for those on over £150K and personal allowances for those earning over £100K. These changes will be of concern and mean that financial advisers will need to review the position of their affected clients. However, advisers will have breathed a sign of relief as the rumoured removal of all higher rate tax relief on pensions did not materialise.

There was better news though for savers. The rise in ISA limits is a welcome move and will be available immediately for those over 50, with everyone else having to wait until next year. Whilst I assume this is aimed at providing some immediate assistance to those who rely on their savings to generate income, with interest rates so low, the increase will not deliver much benefit. At least some pensioners will also receive additional tax credits though.

Help for families came in the form of increased child tax credit, and for those who lose their job in these troubling times statutory redundancy pay has been increased.

Those looking to buy houses under £175K will continue to benefit from the stamp duty holiday – this was extended by a further six months until the end of the calendar year but there was little else to stimulate the housing market.