This week, Fidelity predicted that people would miss out on thousands of pounds by waiting for new legislation that would automatically enrol them into a pension scheme rather than getting into one right now.

Well, yes, obviously. The sooner you start saving, the more money you will have. Simple.

Well, actually, maybe it’s not simple. It sounds simple to me, but so many people don’t save into a pension, that I am starting to think I am missing something.

I am nearly 30. I started saving into a pension with the Daily Mail Group Trust at 21 when I finished university and started my first job as a reporter. I was on pitiful money, so bad that I don’t want to say. Oh okay, you forced it out of me, it was £9,500. ‘You can’t live off that!’ I hear you cry. Well actually, back then, I did, quite happily. I lived with my boyfriend (now husband) so shared expenses on the house, but other than that, we were fine, I still went out, we had all the ‘stuff’ we wanted, and you know what, that whole time, I managed to save into a pension, and still do.

I know people have a lot of financial pressures these days, and I know it’s boring to talk about pensions, but it is the difference between having a comfortable retirement and living on the breadline — or worse. I am all for living in the moment, and what’s the point if all you ever do is eat, sleep and work? But the sensible streak in me says I also need to save for a rainy day. In my mind, it is simple – we need to start saving, and the sooner the better.

Think about this tip from Savvy Woman’s Sarah Pennells: If you were to save £100 a month from the age of 25 to 35 and leave it until you retire (at age 65), you’d have a bigger investment pot than someone who started saving £100 a month at 35 and carried on saving £100 every month until they were 65 – assuming both funds grew at 5 percent. Now that is food for thought.

So the key is to save, and save early. Obviously the bigger your pension pot, the better your lifestyle in retirement. For example, in a recent report carried out by Sun Life of Canada, 62 percent of people with retirement savings of £100,000 or more want to retire on more than £30,000 a year. But to get this kind of income, you need a pension fund of £600,000 plus.

So how can you start to save this sort of money? When should you start saving and how much? Well, the general rule is this: divide your age (at which you start paying into a pension) by two, and pay this much as a percentage of your salary into a pension (this includes your employer’s contributions). So, if you are 20, pay 10 percent of your salary, if you’re 30 when you start, 15 percent of your salary and so on. The older you are when you start, the harder it is going to hit you.

There is a pension crisis in this country.

We have more old people than ever before, too many of us rely only on the state pension, and this is putting enormous strain on the economy. Pensions are the last thing on people’s minds when they start working, and although something like an automatic enrolment may work, ultimately, young people need to be educated in the importance having a pension so that they take responsibility for their own finances in retirement without being forced to. Simple.

-Rachel Mason is public relations manager at Fair Investment Company. The opinions expressed are her own.-

A recent survey revealed that the public believe footballers are the most valuable members of society. Now that is one of the most depressing things I have heard in a long time.

The ComRes survey, which was commissioned by the BBC, asked 1,000 members of the public what they thought 15 professions should get paid.

And although the public believe that footballers should get a lot less than they do – the average is £1.7 million and the public suggested £365,000 as an appropriate salary level – it is still a whopping 12 times more than those surveyed believe a nurse is worth (£29,000).

The public also believe that footballers are more valuable than the bosses of Britain’s top 100 companies. Currently, CEOs are paid £2.1million on average, but the public think they should get around £118,000 a year – less than half of the salary deemed fitting for kicking a ball around.

I’m sorry, but what is going on here? I would give anything to play sport for a living – it is literally a dream job – and then to get paid ludicrous sums of money to do so is just unbelievably lucky, but these footballers don’t even seem to appreciate what they’ve got. As a society we moan about them all the time – their attitudes, their questionable morals, the way they flaunt their hideously extravagant lifestyles – but apparently, we still think they should get paid more than any other profession! Crazy!

Let’s face it. The world could do without footballers. Okay, Heat magazine would have less to write about and the BBC would have to start showing some actual TV on Saturdays instead of the joke that is ‘Final Score’. Come on people, a TV show where we talk about games we can’t even watch, while there are tons of sport that the BBC could get the rights to going on all over the country, unwatched? Please.

But could we do without nurses? No. Could we do without the Prime Minister? No matter what you may think of him personally, no, of course not. What about head teachers? Clearly not. But apparently the public think they are only worth £43,000 a year. Luckily they actually get paid £76,000, which is still not enough if you think about it, otherwise there wouldn’t be such a shortage.

Sadly though, this is the society we live in. Celebrity is everything and therefore, gets rewarded accordingly. Someone who came last in Big Brother 25 could earn more in one year than a care worker could earn in a lifetime, and there is something seriously wrong about that.

As John Caudwell, entrepreneur and founder of Phones4U told the Radio 4 programme: “I think it’s a bit of an indictment of the British public that they think footballers should be the best paid of all members of society.”

I couldn’t agree more.

Rachel Mason is public relations manager at Fair Investment. The opinions expressed are her own.

A recent survey by Moneysupermaket.com has found that the zero per cent introductory offers on credit cards are getting longer while the rates that kick in once the period is over are getting higher, and now consumer groups are arguing that banks should be held accountable for luring poor innocent people into debts they cannot repay.

Yes, the banks should be more sensible, because this is exactly how they got themselves into a mess the last time, but what happened to taking responsibility for our own actions? Just because someone offers you ‘credit’ doesn’t mean you should take it – if you don’t have the money, don’t spend it.

Sadly, it is the same everywhere – we live in a blame society. If something goes wrong, it must be someone else’s fault.

Most days, some ridiculous story will surface where kids have been banned from playing conkers in case they lose an eye (because eye loss as a result of conkers is common place) or skipping in case they fall over and break their neck (again, death by skipping is a serious issue) and we all cry ‘it’s health and safety gone mad!’ but let’s face it, we have brought it on ourselves.

These ‘no win, no fee’ accident claims, where people sue their employer because they dropped a box on their own head, or their local council because they fell over their own feet have created a ‘scaredy cat’ society where no organisation will do anything that might leave them open to be sued.

And I for one think this is sad. The ironic thing is that all these new health and safety laws are starting to create an even more dangerous society. People are getting so used to being ‘protected’ from danger wherever they go, that they are no longer being careful.

And it’s the same with money. People think, if its there for the taking, I’ll have it, and plan to blame someone else if it all goes wrong.

Don’t get me wrong, I think lenders are behaving irresponsibly by lending to people who cannot afford to pay it back. In many cases, vulnerable people who often do not understand the consequences of not being able to service their debts are being taken advantage of, and banks should be punished for this sort of behaviour. But ultimately, it is time we all started taking responsibility for our own actions and stopped blaming others for our own financial problems.

Picture Credit: Shoppers fill Oxford Street in central London in this file picture. REUTERS/Stephen Hird

The base rate is going to be stuck at 0.5 percent for years to come, according to experts, so where does that leave savers?

Yes, the base rate needs to be low for any real economic recovery, and many mortgage holders can’t believe their luck, with many seeing their payments plummet. But there is always a flipside, and with a low base rate comes low savings rates.

With inflation up at 5 percent (as measured by the Retail Prices Index) it is impossible to get a savings account that even maintains the value of your money, let alone increases it, so what should savers do in such a low rate environment?

Well, unfortunately, since National Savings and Investment’s withdrawal of its tax-free index-linked certificates, virtually all savings accounts are paying interest rates below RPI inflation.

So what can you do? Well, if you are looking for a purely cash account, realistically, the only way of securing a relatively reasonable rate on your savings is to go for a fixed rate savings account – the best ones at the moment are offering around 3.15 percent, when fixed for one year, and 4.90 percent when fixed for five years.

With a fixed rate, you know where you are for the entire term, whereas often with variable rate accounts, providers offer what seems like a good deal but they can pull the rate at any point, so you may only get the advertised rate for a few months. If you can afford to leave your money alone for a few years, it may be well worth fixing for a longer period of time, because analysts are predicting interest rates to stay low for some time.

Of course, you should only put your money into a fixed rate account if you are fairly confident that you will not need it before the bond matures – early withdrawals tend to be either expensive or are not permitted at all. You should also make sure you do not invest any more than 50,000 pounds with any one provider (the limit covered by the Financial Services Compensation Scheme.

Rachel Mason is public relations manager at Fair Investment Company. The opinions expressed are her own.-

So the new coalition government is putting VAT up from 17.5 percent to 20 percent on January 4 2011 and the country is up in arms, but is it really that bad?

Okay, in an ideal world, taxes would be low and public services would be top quality, but sadly, the world we live in is not like that. The Institute of Economic Affairs (IEA) says Britain’s real debt is already 4.8 trillion percent – six times higher than the official figure of 772 billion pounds – and the simple fact is we need to pay it back, and to do that, the government needs to raise tax and cut spending.

A rise on income tax would have been a very unpopular move, so the government really only has one option left – VAT.

As George Osborne said, “This single tax measure will by the end of this Parliament generate over £13bn a year of extra revenues. That is 13 billion pounds we don’t have to find from extra spending cuts or income tax rises.”

Considering what VAT actually is, the reaction to the rise has been disproportionate. For a start – did anyone really notice a big difference when Labour cut VAT to 15 pounds? No? Well, we probably won’t notice a difference when it goes up by the same amount.

What people need to remember is that VAT is not a rise on everything; it is value added tax only on non-essential goods. Essentials – that is things like food and kids’ clothes, books and newspapers and public transport – are not subject to VAT, and many other items carry the reduced rate of 5 percent, including gas and electricity, sanitary hygiene products and children’s car seats.

I know many are arguing that poor people are going to be hit the hardest, but on smaller items, a tube of toothpaste for example; a rise of 2.5 percent is less than 2p, pretty negligible. Yes, big items will see a difference, but let’s be honest here, if you could afford to spend 950 pounds on a big screen plasma HD TV, then you can probably afford the 23.75 pounds extra it is going to cost you as a result of the VAT hike.

I do feel sorry for retailers though. Obviously the rise itself can simply be passed on to their customers if they cannot swallow it themselves, but think of all that re-pricing they are going to have to do.

Back in November 2008 when the Labour government cut VAT, many shops didn’t bother to change their prices, choosing instead to give their customers a nice little surprise when they got to the till.

But when it goes the other way, they won’t be able to get away with it – it’s illegal to advertise an item for sale at a price which is lower than the actual amount to be paid, so shops are going to have to either bear the brunt of the tax themselves, or start the arduous task of re-pricing everything in their stores.

But still, isn’t this a small price to pay?

Chancellor George Osborne has pledged to balance Britain’s books within five years. A lot of his plans on how to do that have been unpopular, but surely a couple of quid extra on the weekly shop is a price worth paying if it helps us get back into the black?

Picture Credit: A woman browses among shirts on sale at a street market in London June 23, 2010. REUTERS/Chris Helgren

If there is one thing in this life you can be sure about it is that you are going to be taxed a lot. You can’t escape it.
You are taxed on your income, then you are taxed on the money from your income that you have already been taxed on when it becomes savings, then you are taxed on your pension, which is made up of cash that you have already been taxed on, and then there’s road tax, car tax, council tax, VAT, stamp duty….the list goes on.

And then of course, just when you thought you couldn’t be taxed anymore, you get taxed on any profit you make when you sell any assets – assets bought with money that’s already been taxed! I am talking of course about the tax that’s the talk of the moment – capital gains tax.

The new coalition government is planning to increase capital gains tax from its current rate of 18 per cent to 40 per cent or possibly even 50 per cent, a move that aims to stop ‘fat cats’ from taking their income as capital gains (the 18 per cent capital gains tax rate is lower than their 40 percent income tax rate) and that is all very well, apart from the fact that it is going to hit millions more, the vast majority of whom are certainly not fat cats.

Those due to be hit hardest are second home owners, landlords, and sadly, older people in care homes. According to a report in the Telegraph this week, any person who moves into a nursing home but continues to own their former family home could be liable to pay capital gains.

This is because, after three years of living in care, the nursing home is deemed the person’s primary residence and their former home is designated as a “second property”. This means that if the person is then forced to sell their home, for example, to pay for their care home fees, they will be liable to pay capital gains if their home has increased in value.

Is this fair? Well, no, it’s not. We already live in a society where people are being encouraged to save and then hit when they do, and now we have a situation where old people, many of whom have worked all their lives to own their own home are being taxed for this hard work simply because they cannot look after themselves anymore.

Of course if they sold the home straight away they wouldn’t be liable, but it doesn’t usually work like that. Many old people may not be sure of how long they are going to be in care – they may become ill, need care, recover and want to move back home.

Others may be reluctant to sell their home straight away –they may be in denial that they can no longer cope, or simply want to hold onto it because of the memories it holds; either way, they cannot be expected to make a rash decision like selling their family home, on the basis that they have to beat some tax deadline.

And then of course, there’s the fact that when the gains on these properties are taxed, unless indexation is brought back in (taking inflation into account – Darling scrapped it when he moved capital gains tax down to 18 per cent two years ago) much of the ‘gains’ being taxed are not actually gains, but the result of inflation, which makes the system even more unfair.

If, for example, you bought your home in 1980 for 25,000 pounds, and it’s now worth say 200,000 pounds, 55,000 pounds of that increase is down to inflation alone, so the real capital gains are 120,000 pounds but capital gains will be due on the 175,000 pound ‘gain’.

I think this tax rise has good intentions, but it is going to hit more people than just those big earners it is aiming to catch out. They will find another loophole, and continue to be fat cats, but sadly, as Mike Warburton, senior tax partner at Grant Thornton, rightly points out, the reality is simply “another example of capital gains tax hitting a group of people through no fault of their own.”

The Child Trust Fund is set to become one of the victims of the new UK Conservative-Liberal Democrat coalition’s emergency budget.

The LibDems want to scrap it entirely; the Tories want to pull it from high earners. Currently, predictions are that there will be some sort of half way house, the official line being “the parties agree that reductions can be made to the Child Trust Fund and tax credits for higher earners.”

I have a one-year-old daughter who received her first Child Trust Fund payment a few weeks after she was born, which we then put into an account with the Children’s Mutual.

It was a nice gesture. Just like my health in pregnancy grant – 190 pounds to spend on fresh fruit and veg while pregnant. Again, a nice gesture. Unfortunately, it arrived in my account about two weeks before I gave birth and I had been living on nothing but pork pies and lard up until that point . . .

Seriously though, although I would never turn down free money, as a ‘middle earner’, I do find these benefits bizarre and slightly insulting. I’ll explain.

First, it would suit me much better to lose the benefits and be taxed 440 pounds less. All this taxing of people only to give it back under a different name is such a massive waste of time and money. And second, does the government really think I am incapable of eating properly or saving for my child’s future without their help?

I know there are some very poor families that may not have been saving for their child without the fund, but this surely is a wider problem that two vouchers from the government will not solve.

These people, many of whom may be in genuine poverty, could be helped much more effectively and at considerably less cost than the 350 million pounds a year the Child Trust Fund scheme costs in direct payments alone.

Launched in 2003, the fund aimed to give children born after September 2002 a good financial start in life by putting 250 pounds (500 pounds for lower income families) into a fund, topped up by a further 250 pounds (500 pounds for lower income families) when they reached the age of seven.

The idea being that with some money already in the account, the child’s family would also add to the pot and the end result would be a nice nest egg for the child when they turned 18.

Not only – as I mentioned earlier – does the scheme assume that most families would not be saving without being pushed into it by the government, but also, it has no real measurability. The first child ever to receive a voucher will turn 18 in 2020, and it is only then that we would be able to judge whether it has been a worthwhile exercise or not.

The LibDem proposal to scrap it would save 580 million pounds, the Tory plan, about 180 million pounds, and personally, I think it’s worth it, even if it does mean my daughter is 250 pounds worse off when she turns seven.

Yes, it will be annoying, but only because I had it in the first place. Had it never been launched, I wouldn’t be thinking – ‘hey, the government should be saving for my kid!’

But that’s the trouble with the last government; they were constantly launching benefit schemes for people who didn’t really need them, and this has made the task ahead of our new collation even more difficult.

Whatever they do to reduce government spending is going to seem like a cruel blow to someone.

When almost everyone receives benefits of some kind, almost everyone is a victim when they have to be taken away.