I’m a bit off-topic today, I know. But these are – to put it mildly – exceptional times, and we all have to respond as best we can.
I know many people are having to self-isolate right now, or at least spend a lot more time at home. So I thought I would make a small contribution towards making life more bearable by offering both of my Kindle ebooks free of charge.
My ebook The Festival on Lyris Five is a tongue-in-cheek science fiction novella featuring illustrations by the talented Louise Tolentino. You can download it free (until Thursday 26 March) by clicking here or on the ad below. I hope you enjoy reading it. If you do, a review would be appreciated (though certainly not a requirement!).
My other ebook is called Three Great Techniques for Plotting Your Novel or Screenplay. As you’ll gather, this is aimed at writers and aspiring writers. If you are in that group, I hope you will find the tips and advice it contains helpful. Again, here is a link or you can click on the display ad below.
As you may know, you don’t need a Kindle device to read Kindle e-books. You can also read them on your mobile phone, tablet or PC using the free Kindle app available via Amazon at https://www.amazon.co.uk/kindle-dbs/fd/kcp
And since one of these titles is aimed at writers, I thought I would also include a plug here for Best Writing Forum, which I helped set up a couple of years ago. BWF is free to join and has members all over the world. If you are looking for support or feedback with your writing, you will find it here. Equally, if you are just seeking online companionship from fellow writers during these most stressful of times, you can find that here as well.
As ever, if you have any comments or questions about this post, please do leave them below.
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I’ve joined forces today with some of my fellow UK Money Bloggers to put together a giveaway of FIVEM&S Easter Family Hampers. That means five lucky winners will receive a hamper in time for Easter 2020 🙂
These hampers sell for £50 apiece on the M&S website. The full contents are as follows:
Gold label teabags (250g/ 80 bags)
Caramel eggs (120g)
Hide and seek egg hunt bag (135g)
Simnel cake bar (460g)
Chicky choccy speckled eggs (90g)
8 Spiced Easter biscuits (200g)
Bubbly bunny (23g) x 4
British strawberry soft set jam (113g)
Easter fried eggs whips (180g)
4 golden hot cross buns (260g/pack of 4)
Presented in a dark stained basket with brown faux leather strap
In the event of supply difficulties, or with discontinued products, M&S say they reserve the right to offer alternative goods or packaging of equal quality and value. Full information about the hamper and its contents can be found on the M&S website.
Here then are all the details you need to enter, provided by my colleague Emma Drew (who is co-ordinating this event). Good luck! It would be great if a Pounds and Sense reader wins one (or more) of the prizes 🙂
Meet the Bloggers Taking Part
The bloggers taking part in this fantastic giveaway are as follows…
There are five M&S Easter Hampers up for grabs, worth £50 each.
If the hamper is no longer available when the winners are drawn then the winners will be offered an alternative hamper from M&S worth £50 each.
Enter to Win
To enter simply complete any or all of the Rafflecopter entry widget options below.
The competition closes at midnight on 29th March 2020. If the hamper selected is sold out then we will offer an alternative M&S hamper worth £50. You can see the widget for the full terms and conditions of this giveaway.
One final small point is that if a winning entry comes from following someone on social media, Emma will check before awarding the prize that the winner is still following the account in question. If they aren’t, they will be disqualified and a new winner drawn. So, please, don’t follow and immediately unfollow, as your entry won’t then count.
Good luck, and I really do hope you win a hamper!
As always, if you have any comments or questions about this post, please do leave them below.
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It can hardly have escaped your notice that in the last week or so shares generally have plunged in value due to economic fears sparked by the coronavirus outbreak.
If you have a pension pot, stocks and shares ISA, or any other equity-based investment/s, this is obviously a worrying time. It’s very important to avoid knee-jerk reactions, though.
In particular, unless you really need the money urgently now, you should think very carefully before selling up. By doing so you will be locking in any losses. Even though it’s true that shares may have further to fall, this advice still applies. All share prices are cyclical, and rises and falls are to be expected. That is why stock market investments should always be regarded as long term.
Luckily, there are a few apps that offer you experts’ advice on safe long-term investments. You can check some of the best on the market at BestStockTradingApp.com.
A further consideration is that if you sell up now, you won’t receive any dividends due from your shares further down the line.
Should You Top Up?
With share prices currently falling, should you take the opportunity to ‘top up’? That is actually a difficult question to answer, as it’s impossible to know for sure how much further the markets will fall before they recover. Timing the market is notoriously difficult, and many investors in the past have had their fingers burned by thinking they could second guess it.
Nonetheless, if you are currently investing monthly into a stocks and shares ISA or other fund, I would say you should almost certainly continue to do so. One consequence of the fall in share prices is that you will get more shares for your money now. This will actually boost the value of your portfolio in the longer term when the markets recover. This phenomenon is called pound-cost averaging. It is one reason why making regular smaller investments rather than one-off lump sums can be such a good option for investors.
Otherwise, it is really a matter of personal judgement. If you think that a certain share or fund is good value at its current price there may be a case for investing in it. Inevitably, though, this will be a bit of a gamble. I am not personally planning to top up my equity portfolio until the present crisis appears to be well on the way to being resolved.
Beware of Pound-Cost Ravaging
If your pension is already in drawdown – especially if you are early into your retirement – pound cost ravaging is a risk you need to be aware of right now.
If the value of your pension pot is falling and you are also drawing money from it, those two things together have the potential to deplete it rapidly. You are then increasing the risk of running out of money later into your retirement.
If you have other sources of cash, therefore, it may make sense to reduce or even suspend entirely withdrawals from your pension pot during this time. This will help preserve its value. You will be able to resume withdrawals when – as will inevitably happen at some point – the markets recover. The great majority of pension providers will be happy to do this for you if you request it.
Consider P2P and Other Non-Equity Investments
If you have money to invest, in my view there is a good case right now for considering other types of investment such as P2P.
Regular readers will know that I am a fan of this type of investment (if approached sensibly and selectively) and have a fair-sized portion of my own portfolio invested in it. I won’t go through all the possibilities now as this is a subject I discuss regularly on Pounds and Sense. But if you are looking for a couple of ideas to start you off, I recommend checking out RateSetter – a relatively low risk P2P lending platform which I reviewed in this post – and Bricklane, a REIT (Real Estate Investment Trust) which offers a highly tax-efficient Property ISA (reviewed in this post).
As always, if you have any comments or questions about this post, please do leave them below.
Disclaimer: I am not a professional financial adviser and nothing in this post should be construed as individual financial advice. Everyone should do their own ‘due diligence’ before investing and seek advice from a qualified financial adviser if in any doubt how best to proceed. All investment carries a risk of loss.
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In February 2017 I wrote this post about premium bonds explaining why I was withdrawing a large amount of the money I had invested in them.
To recap, at that time the interest rate paid on premium bonds (from which the monthly prize fund is calculated) had been cut eight months earlier in June 2016. This led me to sell the majority of my holding, as the amount I was earning in prizes had fallen considerably. The rate was cut again a few months later in May 2017, which led me to sell nearly all my remaining bonds. I now have just £5 left, to avoid closing my account completely.
So what has happened since then? The good news for bond owners was that from December 2017 the prize fund was raised by 0.25% to 1.40%. This improved the odds of an individual bond winning a prize in any monthly draw from 30,000 to 1 to 24,500 to 1 (although it still didn’t tempt me to reinvest).
The not-so-good news is that from May 2020 the rate is being cut by 0.1% to 1.3%. As a matter of interest, here is a table copied from the NS&I website showing the changes in prize rates and the odds of winning a prize over the last twelve years. The new rate from May 2020 isn’t shown on the table.
From May 2020 the chances of winning a prize with a single bond will be reduced to 26,000 to 1. Over 170,000 fewer prizes are set to be given out in May 2020 than in February as a result of this change, with less than half the number of £100 and £50 prizes expected to be awarded (source: MoneySavingExpert).
My Thoughts
A first glance you might think that an interest rate of 1.30% percent still isn’t so bad in these days of (very) low interest savings accounts. It’s much the same as the current top paying easy-access savings accounts. Premium bond prizes are tax-free and you can withdraw your capital any time if you need it within a few days. Your money is protected by the UK government and you have an outside chance of winning a life-changing sum. So what’s not to like?
Well, quite a lot in my opinion. Most importantly, although the interest rate is currently 1.40% (reducing to 1.30% in May) in practice most people won’t make this amount. The interest rate is a mean (average) figure and this is skewed by the two one-million pound prizes (which statistically you are highly unlikely to win – see below) and the small number of other other high-value prizes. For these big prizes to be paid out, a lot of people have to win nothing. The more bonds you have, the closer to the average your prize earnings are likely to be. But the reality is that most premium bond owners won’t earn the interest rate quoted (and they may make nothing at all).
A better measure of what you are likely to make over a year is the median average. The way to think about this is that if you lined up all premium bond-holders with a certain number of bonds (e.g. £50,000) in order from those earning the least in a year (probably nothing) to the most (a million pounds plus), the median is the person right in the middle of the line. Half of all holders will earn more than this person (or the same) and an equal number will earn less. The median in this context is therefore a measure of what you can expect to earn from your premium bonds in a year with ‘average luck’. The clever folks at MoneySavingExpert have built a Premium Bond probability calculator which uses this metric to indicate how much you are likely to win per year, with average luck, with any given holding.
With the £50,000 maximum, the calculator reveals that with average luck you will win just £500 of prizes a year, equivalent to an interest rate of just 1.0 percent (see screen capture below). And that is at the current (February 2020) interest rate. From May 2020 that figure will inevitably go down. Obviously you might have better than average luck, but (as stated above) around half of all bond-holders will have worse. You can read a much more detailed explanation about this on this page of the MSE website.
The calculator also reveals that with £5,000 in premium bonds you could expect to win £50 a year with average luck, and with £1,000 nothing at all. Only about one in three people with £1,000 worth of bonds will win a prize in any one year, so the median (‘average luck’) winnings are zero. Over a two-year period, however, about five out of nine holders of £1,000 will win at least one prize, so the median earnings over two years with £1,000 in bonds are £25 (the lowest and by far the most common prize). This does I guess demonstrate that the ‘average luck’ method used in the MSE calculator has its limitations as a way of estimating likely earnings (although it is still likely to be more accurate than applying the headline interest rate to your investment).
Clearly the longer you hold your bonds, the better are your chances of winning a larger prize, so over a period of years average annual earnings may edge up slightly. Even so, the large majority of bond-holders won’t ever earn the headline rate.
At one time the tax-free status of premium bond prizes would have been a significant attraction, but nowadays that doesn’t apply to nearly the same extent. All basic rate taxpayers now benefit from a Personal Savings Allowance of £1,000 worth of tax-free savings interest every year (higher rate taxpayers get £500 and top rate taxpayers nothing at all). In practice 95% of people now pay no tax on their savings interest. If you are in the 5% who do, premium bonds become a more attractive option. Even so, a typical return of 1% or less, even if it is tax free, isn’t going to set many pulses racing.
Finally, you do of course have a chance of winning a big prize, but it’s important to be realistic about what that chance is. Even with the maximum £50,000 holding, MoneySavingExpert calculate that your chances of winning the million pound top prize in any one year are 1 in 69,876. To put this into perspective, if you had held £50,000 in premium bonds since the year 68000 BC (assuming of course they existed then) with average luck at the current interest rate you could have expected to win the jackpot just once. I looked this up, and 68000 BC is the middle of the Stone Age!
Overall, then, I cannot recommend premium bonds as a home for your savings, especially with the coming rate cut in May 2020.
I can understand why premium bonds are a popular investment, as they offer a bit of excitement every month checking whether you have won and how much. But the fact remains that overall, for most people, the total prize money received is likely to average little more than 1 percent a year at current rates. It may very well be less than this, especially after May 2020 when – as already mentioned – the number of lower value prizes (£25 to £100) will be cut substantially. I look forward to checking on the MSE calculator then to see how much a person with average luck might expect to make in a year.
If you are lucky enough to have £50,000 burning a hole in your pocket, my first advice would be to put enough into an easy-access savings account such as the Post Office Online Saver (currently paying 1.30% including a fixed 0.8% bonus for the first 12 months) to cover your outgoings for up to three months in the event of emergencies. After that, you could invest the balance in a low-cost tracker fund, or a portfolio of investment funds, or a robo-advisory platform like Nutmeg. You could perhaps put a proportion of the money into P2P lending or property crowdfunding as well. Over several years, for the great majority of people, this will outperform an equivalent premium bond portfolio many times over.
As always, if you have any comments or questions about this post, please do leave them below.
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PLEASE NOTE: This welcome offer has now changed. Details of the new ‘Invest £1,000, Get £100’ free welcome offer can be found in my fully updated RateSetter review.
As I said then, RateSetter is one of my favorite lower-risk P2P lending sites. It lets you save via a tax-efficient IFISA and/or an ordinary (taxable) Everyday account. Although their rates aren’t the highest (currently 3% to 4%) I like the fact that risk is spread across all loans on the platform, with a provision fund to cover any defaults.
In my previous articles I mentioned their welcome offer of a £100 bonus for anyone investing £1000 for a year or longer. This offer is now closed, though if you took advantage and are waiting for the £100 bonus to be credited twelve months on, that will (of course) still be honoured.
What RateSetter do have now is an enticing (and much lower cost) Invest £10, Get an Extra £20 offer.
New Welcome Offer
Currently if you are new to RateSetter you can get £20 added to your account for free just by signing up and depositing £10. Full terms of the offer are reproduced below, and you can also find them on the RateSetter website.
You can take advantage of this offer so long as you
have not previously registered with RateSetter;
register after 23rd January 2020; and
deposit a minimum of £10 through the RateSetter ISA or Everyday account within 56 calendar days of registering.
Your bonus will be credited to your Everyday Account and invested in RateSetter’s Access (instant access) product at the going rate (currently 3%) within 30 working days of qualifying. From here you can transfer it to your ISA account if you like or simply withdraw it.
My Thoughts
This is a great offer from RateSetter if you are wary about P2P investing and want to dip a toe without risking any significant money. It is also good if you only have very small amounts available to invest, or you just like the idea of getting your hands on a free twenty pounds! It will also give you a chance to see how the RateSetter P2P platform works for yourself.
Although the bonus is ‘only’ £20 as opposed to the £100 on offer before, you only have to invest £10 to get it rather than £1,000. In addition, your bonus will be credited within 30 working days of qualifying for it, rather than having to wait a full year as before.
Clearly, this is a generous promotional offer by RateSetter and I assume it won’t be available forever. If you want to take advantage, therefore, don’t wait too long. I will remove this information if/when I hear the offer is no longer valid.
As always, if you have any questions or comments about this post, please do leave them below.
Disclosure: This post includes my referral link. If you click through and make an investment for this offer, I will receive a bonus for introducing you. This has no effect on the terms or benefits you will receive. Please be aware also that I am not a qualified financial adviser and nothing in this post should be construed as individual financial advice. You should do your own ‘due diligence’ before making any investment, and take professional advice if at all unsure how best to proceed. All investments carry a risk of loss.
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As you may have heard by now, the Spanish-owned bank Santander recently announced that they are cutting the interest paid on their popular 123 current account by a third.
From 5th May 2020 they are paying just 1% a year interest up to £20,000. That’s a big drop from the maximum 3% on offer when the account was launched (to great fanfare) in 2012. At that time the account topped the best-buy tables and many thousands of people (including me) switched to it as a result. As well as offering market-leading interest rates, they also paid cashback of up to 3% on a range of household bills if paid by direct debit from the account.
Since the heady days of 2012, though, Santander have steadily watered down the benefits of this account. They introduced a monthly fee that was originally £2 and then went up to £5. They also cut the interest rate in 2016 to 1.5%, and now – as mentioned above – to 1%. They are still charging £5 a month, though, which means you need to have an average balance of £6,000 in your account just to cover the fee (which works out as £60 a year).
Cashback is still on offer, but from being unlimited it has now been capped at £15 a month maximum. The 123 account currently pays 1% cashback on water bills, council tax and Santander mortgage payments, 2% on gas and electricity and Santander home insurance, and 3% on phone, broadband, mobile and TV packages. From 5th May onwards each of these three tiers will be capped at £5.
All this means that if you are one of the millions of customers who still have a Santander 123 account, you need to look carefully at whether it is still the best option for you.
Crunching the Numbers
Although Santander is no longer the clear market leader among current accounts, it may still be a good (and possibly the best) choice for some people. But you do need to look carefully at how you use the account and what alternatives are on offer. That’s what I did, and in the end I stayed with Santander, but switched my account to 123 Lite.
Here how I worked this out…
I started by looking at what I currently get from my Santander 123 account in terms of cashback and interest and setting this against the monthly charge. I have already cut down the amount of money I keep in my account due to the falling interest rates, so I now hold an average balance of around £1,800 in it. Here is a screengrab of the relevant section of my latest bank statement.
Adding this up, you can see that in January 2020 I received a total of £5.83 in cashback and £2.55 in interest. That’s a total of £8.38. Subtract the £5 monthly fee from this, and my net returns from the account are £3.38 a month or about £40 a year. On an average balance of £1,800, that works out as a return of about 2.25% – not great, but still better than most bank accounts currently (I am obviously counting cashback and interest together in this calculation – it’s all money, after all).
With the reduction in interest rates from 1.5 to 1%, though, that would have cut my monthly interest by a third to around £1.70. This would reduce my monthly ‘profit’ to £2.53, or about £30 a year. That works out as a rate of return on an average balance of £1,800 of about 1.7%. That’s obviously significantly worse than the previous 2.25%. Although again – taking into account the cashback as well as the interest – it still beats most ordinary current accounts.
The 123 Lite Alternative
With the potential rate of return on my 123 account falling to around 1.7%, I wanted to see if there were any better alternatives for me. Other things being equal, though, I didn’t want the hassle of switching to a different bank if the returns weren’t going be appreciably better for me.
So I looked into what alternative accounts Santander offer and learned about the Santander 123 Lite account. This doesn’t pay interest at all, but it offers the same cashback as a standard 123 account. And, very importantly, the monthly charge is only £1 instead of £5.
Looking at my potential returns with this account, I came up with the following: total cashback £5.83 minus £1.00 monthly charge = £4.83 a month net profit. Multiplying that by 12 gives a total annual return of £57.96. On an average £1,800 balance that works out as a notional interest rate of 3.22%, which was obviously a lot better than staying with a standard 123 account. So I decided to do that. Even at the current 1.5% interest rate which applies till 5th May 2020, I realized I would still be better off switching to 123 Lite, so there was no reason to delay.
As a matter of interest, if I reduce the average balance in my Santander account to £900 while still earning the same cashback, that will effectively double the rate of return I receive. Perversely, with the Santander Lite account, the lower the balance you can keep in it while still servicing your direct debits, the better the percentage return on your capital you will get 🙂
The other advantage of switching to a Santander 123 Lite account is that, as I discovered, it is a very simple process. I logged in to my account and selected the option to ‘upgrade’ my account. I had to answer a few simple questions and click to confirm my application. The next day I received an email confirming that I was now the proud owner of a Santander 123 Lite account. The account still has the same sort code and account number, the same PIN card number, and I can log in in exactly the same way. But at a stroke I have effectively doubled the returns I will be making from my account!
Other Alternatives
I strongly recommend that anyone with a Santander 123 account performs a similar calculation to the one I described above (bearing in mind there is now a cap of £5 a month on cashback in each of the three tiers). This will reveal if you would be better off switching to a 123 Lite account (and by how much per year). If you choose this option, switching is – I promise – a quick and painless process.
There are, of course, other alternatives, though. For example, HSBC have just introduced (or actually reintroduced) a one-off £175 bonus for anyone switching to their Advance current account. Note that to qualify for this you have to pay at least £1,750 into the account each month (or £10,500 every six months) and set up at least two direct debits or standing orders. More information about this can be found in this article from Which?
There are also still a few other current accounts that pay interest. An example is Nationwide’s FlexDirect account, which pays 5% interest on balances of £2,500 a year for the first 12 months (reducing to 1% a year after that). You have to pay in a minimum of £1,000 a month to qualify for this. Neither HSBC nor Nationwide offers cashback as well, so it is important to take that into account when deciding whether switching to them will be worth your while.
I hope you found this post of value if you have a Santander 123 account. I wish you every success in deciding how best to proceed. As ever, if you have any comments or questions, please do post them below..
UPDATE 5th MAY 2020 – I have just heard that Santander are cutting the interest rate on their 123 account AGAIN to 0.6% in August 2020. That makes the case for changing to a 123 Lite account – or switching away from Santander entirely – even more compelling.
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As is customary for bloggers at this time of year, here are the top twenty posts on Pounds and Sense in 2019, based on comments, page-views and social media shares. They are in no particular order. I have excluded any posts that are no longer relevant.
I hope you will enjoy revisiting these posts, or seeing them for the first time if you are new to PAS. Don’t forget, you can always subscribe using the box on the right to be notified of new posts as soon as they appear.
All posts in the list below should open in a new tab when you click on the link concerned.
Thank you very much for your interest in Pounds and Sense. I hope 2019 has been a good year for you.
I’ll be taking a break from blogging over the festive period (though I’ll still be around on Twitter and Facebook). I’ll therefore close by wishing you a very happy and peaceful Christmas, and a prosperous and fulfilling new year. See you again in 2020 🙂
If you have any comments or questions, of course, feel free to leave them below as usual.
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One question I get asked fairly frequently as a money blogger is what I think are the best current investment opportunities.
I have to be very careful when responding to this sort of question (and always tell people this). For one thing, I am not a qualified financial adviser, so it would be against the law for me to offer personalized investment advice. And even if I were, I still wouldn’t be allowed to give one-to-one advice without first doing an in-depth fact-find on the person in question.
Of course, this is exactly as it should be. For one thing, everyone’s circumstances are different, and what represents a good investment for me might not be the same for you. It depends on a wide range of factors, including your income and expenditure, your family responsibilities, how much you want to invest, the timescale (and purpose) you are investing for, your age and health, and so forth.
Another important consideration is your attitude to risk. Other things being equal, higher returns come with higher risks. If you’re comfortable with this and willing to accept it in exchange for the chance of better returns, that is of course your decision. On the other hand, if riskier investments would cause you sleepless nights, you are probably better off seeking a safer – if possibly less exciting – home for your money.
In addition, anything I say here is inevitably based on my own experience, and there is no guarantee yours will be the same as mine. I might, for example, have great success with one platform and suffer losses on another. But there is no way of knowing whether your experiences if you invest will be the same as mine. This applies especially if you have to choose specific investments on the platform (as with many P2P/property crowdfunding platforms) rather than putting your money into a pooled fund of some kind.
And, of course – as the financial services ads always say in the small print – past results are no guarantee of future performance…
I don’t want to come across as too negative. I am, after all, a money blogger and investor myself. So what I can – and will – do is talk about my own investing experiences and share information about what has worked well for me this year. It’s then up to you to decide if you want to investigate these opportunities any further. If so, you will need to do your own ‘due diligence’ before deciding how to proceed, perhaps taking professional advice from a qualified financial adviser as well (which I strongly recommend if you are new to investing or at all uncertain).
Although I count myself as a reasonably experienced investor, I do still have an independent financial adviser (Mike from Integrity Wealth Solutions). He oversees about half my investments, while the other half I look after myself. He also advises me on my financial situation more generally and answers any questions I can’t answer satisfactorily myself. i will talk more about this in another post. But I wanted to mention it here to show that I am not at all opposed to using a financial adviser and in general recommend it, particularly when starting out in investing.
My Best Investments of 2019
Below I have listed some of my investments that have performed best this year and/or caused me the least stress and hassle! I have included a few lines about each one, and links to any blog posts I have written about them for further info.
(1) Nutmeg
Nutmeg is a robo-advisory platform. I have used it for my Stocks and Shares ISA investments over the last three years. My investment pot has grown steadily, albeit with a few ups and downs, as is to be expected with equity-based investments. At the time of writing my Nutmeg pot has grown by about 40% since i started investing in April 2016, which is certainly a lot better than I could have achieved with a bank savings account. Of course, you shouldn’t normally invest in any equity-based product with anything less than a five-year timescale.
Nutmeg use exchange-traded funds (ETFs) as their investment vehicle. These are discussed in more detail in my in-depth Nutmeg review, which also includes details of what I invested with them and when. Note that my investment has grown by a further £1,100 since that article was published.
(2) Ratesetter
Ratesetter is a P2P lending platform. They don’t pay the highest rates, currently ranging from 3% for instant access to 4% for their Max account (where you pay a release fee of 90 days’ interest if you wish to withdraw). Though better than most bank savings accounts, those rates are clearly nothing spectacular.
One thing I particularly like about Ratesetter, though, is that they have a provision fund that effectively covers investors against defaults. That means you don’t have to worry about diversifying your investments across a range of loans, as is the case with some other P2P lending platforms. Of course, if the whole platform were to collapse the provision fund wouldn’t necessarily save you, but Ratesetter has been going for ten years now and appears professionally and competently run. It has delivered the promised returns to me with no stress or hassle, and I am happy to recommend it based on my experience.
In addition, if you check out my Ratesetter review you can discover how to get a free £20 bonus if you invest a mere £10 with them.
(3) Buy2Let Cars
I took a long time before deciding whether to invest with Buy2Let Cars, as it is quite an unusual investment. Basically what you are doing is putting up the money to buy a car for someone in a responsible job who can’t afford to buy one outright themselves. You then receive monthly repayments over a three-year period, and a final repayment of capital plus interest at the end of the loan. The minimum investment is £7,000, so this is obviously not going to work for everyone. Personally I bought one new car at a price of £14,000 in March 2018. Since then I have been receiving £250 per month in repayments, with a final payment of £8,429 due in month 37. That will give me a total net profit of £3,429 based on an annual interest rate of 10% (the rates on offer can vary but once you have signed an agreement the rate is fixed for the duration of the contract).
There are – of course – various safeguards and protections in place, fully discussed in my Buy2Let Cars review. Buy2Let Cars say that to date they have a 100% repayment record to investors, which appears to be confirmed by their Trust Pilot reviews. This investment has been working very well for me, with payments turning up in my bank account every month like clockwork. I am currently semi-retired, so it is providing a useful extra monthly income for me, with a large lump sum due in 2021, just a few months before I qualify for the state pension 🙂 If you think it might work for you, I recommend checking out my Buy2Let Cars review and speaking to my contact there, Brett Cheeseman, who helpfully answered all the questions I had at the time I invested.
(4) Kuflink
Kuflink offer the opportunity to invest in loans secured against property. These loans are typically made to developers who require short- to medium-term bridging finance, e.g. to complete a major property renovation project, before refinancing with a commercial mortgage.
Kuflink don’t pay the highest rates in this field – their loans are typically at an interest rate of around 7% – but in my view they offer a fair balance between risks and rewards. One thing I like about them is that interest is paid into your account monthly on all loans. I only have a relatively small amount invested, but so far everything has been going well with just the occasional short delay in repayment of capital.
Kuflink currently have a generous welcome offer, with cashback of up to £4,000 for new investors. Take a look at my Kuflink review for more information about this.
(5) Crowdlords
Crowdlords is a property crowdfunding platform. I have been investing with them almost since their launch and have made a good overall profit. Crowdlords pay competitive interest rates (over 20% in some cases) and offer a choice of equity and debt investments. Equity investments are higher risk than debt ones, but offer the potential for bigger returns if all goes well.
My only reservation about Crowdlords is that I currently have two overdue investments with them. In both cases, though, I have received full and reasonable explanations for the delays, and have been told that the money should be in my account within the next few months. Obviously, if that doesn’t happen, I will let Pounds and Sense readers know.
Crowdlords doesn’t have a welcome offer as such, but they do have a Refer a Friend scheme. If you sign up quoting my code, I will share the commission I receive 50:50 with you. Please see my Crowdlords review for more information about this.
So those are the investments that have given me the best returns and/or least stress during 2019. I do have others as well, including Primestox, ZOPA, Bricklane, The Lending Crowd, The House Crowd and Property Partner. Most of these have still made some money but none has really set the world alight.
Only Primestox actually lost me money. This is (or was) a premium food investment platform. They started promisingly and I made good returns on my early investments, but then they were hit by a series of delays and defaults. This happened with three projects I invested in. In the case of two I have received partial repayments with more promised, but in the third I have probably lost my £500. Primestox are no longer advertising investment opportunities, and I assume are re-evaluating their business model.
Property Partner is an interesting case. I have made modest returns on my portfolio this year, partly due to the fact that the property market in general has been in a slump. That said, there haven’t been any issues with delays or defaults, and dividends have been credited to my account every month as promised. It will be interesting to see what happens in 2020 as properties come up to their five-year anniversary and investors have the opportunity to exit at the current market price. As I noted in this recent blog post, this has the potential to create opportunities for both buyers and sellers.
I haven’t included certain other investments in this article. These include my Bestinvest SIPP, which is now in drawdown and holding up well in value. Neither have I included money invested via my financial adviser. This is mostly in funds from Prudential, which again are doing pretty well.
Lastly, I haven’t included the money I ‘invested’ in Football Index. My portfolio has more than doubled in value over 18 months, so in some ways it is my most successful investment of 2019! I am sure luck has played a significant part in this. Nonetheless, if you want to know more about Football Index – and read how you can get a risk-free £50 when signing up – you might like to check out this recent blog post.
I hope you have enjoyed reading this article, which has run on a bit longer than I expected. I hope also it may have given you a few ideas to investigate further if you are in the fortunate position of having money to invest.
As always, if you have any comments or questions about this article, please do post them below.
Disclaimer: As stated above, I am not a professional financial adviser, and nothing in this article should be construed as personal financial advice. You should always do your own ‘due diligence’ before investing, and seek advice from a qualified financial adviser if in any doubt how best to proceed. All investment carries a risk of loss.
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With Christmas almost upon us, I thought I’d take a look today at how the cost of Christmas has changed over the years. I’ll also be suggesting some things you can do to keep the cost of the festive season under control.
Of course, Christmas has always been relatively expensive, as it’s one time of year nearly all of us push the boat out, buying gifts for friends and family, and generally spending more on food and drink and entertainment.
But all the usual bills still have to be paid at this time, including gas and electricity. For those of us in the UK, our energy use rises during the cold winter months anyway. And that effect is magnified over Christmas, when we may have extra guests visiting (and perhaps staying) as well. This all adds to our bills, and hence the total cost of Christmas.
The Cost of Christmas Past
So how much is your energy actually costing you, and are you paying more than you did ten or twenty years ago?
Take a look at the interacfive house graphic below – kindly provided by my friends at Energyhelpline.com – to see how average energy bills (along with our tastes in home decor and TV viewing!) have changed between 1970 and today.
As you can see from the graphic, average energy bills have fluctuated over the years, with the 1980s in particular being surprisingly expensive. In recent years the trend has been broadly upwards again, though this has been countered to some extent by the arrival of more energy-efficient appliances, from LED bulbs to condensing boilers.
Nonetheless, Christmas today is a very expensive time for many people. One reason is – of course – inflation. The cost of everything has risen over the years, so it makes sense that Christmas is all the more pricey too. But inflation aside, for many people today Christmas is a much bigger (and costlier) affair than it used to be.
Christmas in the 1960s wasn’t the long drawn out holiday we know now. As many readers of this blog will remember, most people only celebrated on the day itself, with Christmas Eve used for buying any gifts or food needed (unheard of today) and Boxing Day spent visiting family. With only two TV channels to choose from – BBC and ITV – everyone watched the same things, so there was no squabbling between Doctor Who and Die Hard!
The 1970s wasn’t much better on the TV channel front (the Christmas movie was a big highlight in the days before streaming and rentals) – though it did see a big surge in how much we spend on presents, with toys like Action Man and Evel Knievel making their debut during this period.
The 1980s saw an even bigger increase in the amount the UK would spend over the season, though you were more likely to sip a Babycham or eggnog in the days before you could get decent wine inexpensively. Wham’s ‘Last Christmas’ was the biggest festive hit. And the whole family would probably sit down together to watch Noel Edmonds on Christmas morning (hard to imagine in today’s multichannel, multimedia world).
The commercialization of Christmas took a new leap in the ‘90s, with toys like the Tamagotchi, Furby and Game Boy being huge sellers across the decade. Christmas TV might include Mr Bean, The Muppets Christmas Carol or even The Simpsons. It was also probably the last decade where the Christmas Number One was truly important – the Spice Girls dominating with three in a row.
Since then, the cost of Christmas has gone on increasing, as we spend ever more on gifts, decorations and events. And Christmas itself has spread ever wider as well, with festivities beginning weeks before the big day and continuing on into early January.
How to Keep Costs Down at Christmas
With the cost of Christmas (for many at least) having climbed alarmingly, here are some tips and suggestions for keeping your costs – and especially energy bills – down at this time.
Have your boiler serviced regularly, to ensure it is operating at peak efficiency.
If you have an old boiler that keeps breaking down, the time may have come to replace it. The Energy Saving Trust say that you could save up to up to 40 percent on your gas bill by installing a new ‘A’ rated condensing boiler with a programmer, room thermostat and thermostatic radiator controls.
If your radiators aren’t heating up properly at the top, you may need to bleed them to release air in the pipes. Depending on the radiator, you may need a special key to do this or a flat-bladed screwdriver.
Turn down your thermostat by one degree - this can reduce your heating bill by 10%.
Replace old light-bulbs with new energy-saving bulbs. The latest LED bulbs are just as bright as old incandescent bulbs and use a tenth of the energy. They last longer too.
Exclude draughts with heavy curtains and draught excluders by doors.
Turn off heaters in rooms you aren’t using and close the doors.
Don’t leave electrical appliances on standby.
Wash clothes at 30 degrees (or lower) and avoid using tumble driers whenever possible.
Get a smart meter installed if you haven’t already. The energy companies are fitting these free. They can help you see when and where you are spending money on energy and identify ways you could save money as a result.
If you’re an older person and/or on a low income, you may be able to get a discount of £140 on your winter energy bills through the Warm Home Discount scheme. The scheme for 2019/20 is currently open for applications, and most larger energy suppliers are offering it. But be aware that they only have a limited quota of discounts to give out, so you need to apply asap before applications close. My blog post about the Warm Home Discount scheme has more information about this.
Most older people who receive the state pension should get a Winter Fuel Payment from £100 to £300 in cash, based on their age and circumstances. Those in receipt of Pension Credit and some others on low incomes may also be eligible for a Cold Weather Payment of £25 if the average temperature in their area is at or below zero for seven days consecutively during the winter months.
Last but not least, the energy market is more competitive than ever these days, meaning you should be able to find a better deal pretty easily by shopping around. Energy Helpline can help you save up to £461 on your annual bills. Simply enter details of your current supplier on their website and they will handle the entire switching process for you. It’s that easy!
Christmas Prize Quiz
Here’s one more way you may be able to save some money this Christmas. Energy Helpline are currently running a Christmas-themed prize quiz on their website. Just click through here and scroll down to the quiz, where you can put your Christmas knowledge to the test! One lucky person will win a £100 M&S voucher. But don’t delay, as the winner will be drawn on Monday 23rd December 2019.
As always, if you have any comments or questions about this article, please do post them below.
Disclosure: this post is sponsored by Energy Helpline, an independent price comparison website.
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A few weeks ago I published this post about how to get a postal vote. If you did this, I hope you have sent it off by now. If not, you will need to send it (or take it in) as soon as possible.
If you have been given a postal vote you won’t be able to vote in a polling station, although you can take your postal vote there in person if it’s too late to post it.
Today I want to talk about how to ensure you are able to vote on the day if you don’t have a postal vote. I am particularly addressing older individuals today, since they are the people for whom this blog is primarily intended.
The bad news if you have to cast your vote in person on Thursday is that the weather forecast is pretty dire, with heavy rain and even snow forecast in some areas. So I thought it might be useful to share a few thoughts on how best you can go to vote, while minimizing the risk and inconvenience.
The name and address of your local polling station will be on your poll card, which you should have received by now. This is the only place you can go to vote. It’s a good idea to take the card with you so that the clerks can find you on the register. But it’s not compulsory to take it if you have misplaced it. In that case you will simply need to provide your name and address. There is no need to bring proof of ID with you in England, Wales or Scotland, although this is a requirement in Northern Ireland.
Here then are some top tips for getting safely to and from the polling station on Thursday…
Going to Vote
At this time of year it gets dark very early – sunset on Thursday 12th December will be at about 3.50 pm – so try to get to the polling station earlier in the day, while it is still light.
Plan your journey in advance. If you know the best route to the polling station, this will make your journey less stressful, especially if the weather is bad.
Don’t be afraid to ask for assistance. See if a friend, relative or neighbour can accompany you to the polling station or give you a lift.
You could also get a group of friends and neighbours together for the journey. If the weather is bad you could share a taxi together.
If you are going in a car, plan where you will park in advance. If you have a Blue Badge, you can of course park on yellow lines for up to 3 hours, so long as there are no other restrictions. But it is better to park in designated disabled bays if these are available.
Otherwise you may be able to take advantage of the Just Park and Vote promotion that is being run by the company JustPark in association with former MP Alan Johnson. This allows anyone using the JustPark app to find a parking space near their local polling station and park there free of charge for up to 30 minutes. More information can be found here.
If you are stuck for a way of getting to the polling station, you could contact the local office of the party you intend to vote for. They are all keen to get their voters out and will help you if they can, perhaps by putting you in touch with a volunteer who can give you a lift. The Conservatives have a dedicated website for this purpose at https://action.conservatives.com/vote/. The other parties don’t appear to have equivalent sites, but the national websites of Labour and the Liberal Democrats (and the other political parties) will try to help if you get in touch using their contact forms or phone numbers.
Finally, at the risk of stating the obvious, wrap up warm and take an umbrella with you. Casting your vote is important, but so too is staying healthy.
Helping Older People to Vote
If you have older (and/or disabled) friends, relatives or neighbours, it is a good idea to check if they wish to vote, and if so to offer your assistance.
A lift to the polling station may be appreciated. Or you could simply offer to accompany them on the journey there and back. This applies especially if they have mobility difficulties, as the roads and pavements may be wet and slippery, increasing the risk of falls.
Whatever your political preference, I urge you to express this by voting on Thursday. As I said in my earlier post, it is important that the voices of older people are heard by law-makers, and that their views are given due weight.
I hope that by following the tips and advice above you are able to cast your vote safely and with a minimum of hassle on Thursday.
As always, if you have any comments or questions about this post, please do leave them below.
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