Going abroad this summer? If so, be aware that you could be hit by hidden charges for using your cards overseas. Most debit cards charge both for buying goods and taking cash out while you’re abroad and many credit cards also charge for cash withdrawals outside the UK. Moreover, both normally charge extra commission for spending in another currency. So before you travel, check out whether your cards carry any charges. If so, it might be worth switching to a travel friendly card or carrying cash. Either way, don’t let your credit card ruin your holiday.
The financial week . . . .
With interest rates rising, more and more people are worrying whether they can afford their mortgage repayments. Housing charity Shelter recently reported that repossessions have risen by 65% over the past five years to 17,000 in 2006. So if you’re thinking of taking out a mortgage or re-mortgaging to consolidate your debts, it’s worth taking independent financial advice before you make any commitment.
Check out the mortgage section on Moneybasics to get clued up!
Stormy times may lie ahead for students, following the comments of Alasdair Smith, Vice Chancellor of Sussex University, reported on Sunday. While students currently pay an unusually low rate of interest on their student loan (rising to 4.8% in line with inflation in September), Professor Smith has called for the Government to charge interest on student debt at commercial rates.
If you’re heading off to University this autumn, check out Credit Action’s free guide to making your student money go as far as possible, available at: http://www.creditaction.org.uk/publicationsdivert.htm.
Are we failing to financially plan for the future? The number of individuals in occupational pension schemes has fallen by 18% since 2004, according to figures released by the Office of National Statistics on Tuesday. This indicates either that more people are choosing to take out their own personal pension scheme or that increasing numbers are failing to plan for their old age at all. Given recent warnings that life expectancy is rising at a record rate, failing to save for your old age is unlikely to be a wise choice.
On Wednesday the Government launched its new housing policies, including a promise to build 3 million new homes by 2020. This announcement came as figures released by the Royal Institute of Chartered Surveyors indicated that the housing market is finally starting to slow down, with new buyer enquiries falling during June.
Gordon Brown, the new Prime Minister, also announced plans to simplify planning permission laws and encourage lenders to offer longer term fixed rate mortgages. Although borrowers with a long term fixed mortgage lose out if interest rates fall, the big advantage is that they know exactly how much their monthly repayments will be for the term of their mortgage and can avoid interest rate shocks as suffered by many borrowers as a result of recent rate rises. As if on cue, Natwest also announced on Thursday that it is re-launching its 25 year fixed mortgage.
Perhaps Mr Brown should turn his hand to reforming tax policy as well. Figures released by the National Audit Office on Thursday showed that since the hotly debated tax credit scheme was introduced four years ago, claimants have defrauded the system of £3bn while the tax man has paid out £6bn too much.
Finally for this week, some good news for future generations on the personal finance front. As you can see in the Newsroom, an overhaul of the school curriculum for secondary pupils includes more lessons being given on money management. The lessons, going under the name ‘economic wellbeing’ will start from September 2008 and hopefully will go some way to ensuring that today’s young people become tomorrow’s savvy money managers!