Money: A User’s Guide

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Laura Whateley. Money: A User’s Guide

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Dedication

INTRODUCTION

Who this book is for, and how to read it

How to rent a place and lessen the chances of getting ripped off. Should you rent from a letting agent, or a landlord?

What fees you have to pay up front, and questions to ask before you part with them

Need to know: what are tenancies?

How your deposit is protected

How do I get my deposit back?

How you can avoid paying an upfront deposit

Who is responsible for repairs in my rental?

Who pays household bills in my rental?

How to borrow enough to buy a property

How your deposit influences the mortgage you can get

What is LTV?

The greater your deposit, the cheaper your mortgage will be

• TOP TIP

How your bank is judging you

Earnings matter, if only to work out whether you stand a chance of buying

How to get a mortgage if you are self-employed

What is ‘stress testing’ and why the future matters as much as the present

What is your credit score and why does it matter?

How to improve your credit history

• MAKE SURE YOU ARE ON THE ELECTORAL ROLL

• GET A CREDIT CARD AND USE IT IN A CHILLED-OUT MANNER

• ADD RENT TO YOUR CREDIT HISTORY

• DON’T APPLY FOR OTHER STUFF

• BREAK UP WITH YOUR EX

• PAY ALL YOUR BILLS ON TIME

• REDUCE YOUR DEBTS (BUT DON’T WORRY ABOUT STUDENT LOANS)

• BE CAREFUL ON FACEBOOK

• DO NOT GET A PAYDAY LOAN

• GET A COPY OF YOUR OLD REPORT IF YOU HAVE MOVED TO THE UK FROM ABROAD

You have got a deposit and can afford a mortgage! So what is the process of buying a house?

The many other costs of buying a house

Need-to-knows: Stamp duty

Conveyancing

Surveys

Mortgage brokers

Choosing a mortgage. What’s actually in a mortgage?

Should you get a fixed-rate or a tracker mortgage? • BUT FIRST, WHAT IS THE BASE RATE?

Variable rates, pros and cons

Fixed rates pros and cons

Buying with the Bank of Mum and Dad (BOMAD): top tips and family mortgages

First-time buyer schemes to help you buy (with or without BOMAD)

Help to Buy Equity loan

Shared ownership

Student loans

Need to know: loans for students who started university after 2012, when tuition fees went up to £9,000

Should I pay off my post-2012 student loan early?

Need to know: plan 1 student loans, for everyone who started university between 1998 and 2011, and Scottish and Northern Irish students who started after 2012

Should I pay a plan 1 loan off early?

Personal loans

• TOP TIP

Payday loans

Credit cards

Credit-card basics

Types of credit cards, their pros and cons • 0 PER CENT PURCHASE CREDIT CARD

• 0 PER CENT BALANCE-TRANSFER CREDIT CARD

• 0 PER CENT MONEY-TRANSFER CREDIT CARD

• CASHBACK OR AIRLINE MILES CREDIT CARD

• BAD CREDIT CREDIT CARD

Overdrafts

Car finance

Peer-to-peer loans

Drawing up a budget

The Kakeibo method

How much should I save (and spend)?

How to make it easier to set money aside. Use cash more and check your direct debits each month

Set up lots of pots and pay yourself first

• CASH IN ENVELOPES

• MULTIPLE DIRECT DEBITS

• PREPAID CARD

Try Monzo, Starling or Revolut

The benefits of open banking

Genius budgeting apps available now • CHIP

• PLUM

• MONEYBOX

• YOLT

• MONEY DASHBOARD

• CLEO

• SPLITWISE

• CIRCLE

• PAYM

• STOCARD

Know thyself: lessons from behavioural economics

Anchoring

We overvalue sale items

Endowment effect

Loss aversion

Herd mentality

Interest rates vs inflation

Savings accounts to consider. Current accounts

Easy-access savings accounts

Notice accounts

Fixed-rate bonds

Regular savers

ISAs

Junior ISA

Innovative finance ISA

Financial Services Compensation Scheme

Savings terms and conditions to keep in mind

Savings accounts to help with buying a house. Help to Buy ISA

Lifetime ISA

What are assets?

Need to know: what are stocks and shares?

Need to know: what is the stock market?

Need to know: different types of shares

Need to know: stock-market indexes

Need to know: what are bonds, gilts, commodities?

Need to know: what are investment funds?

How to start investing

How much can you invest?

Need to know: investment fees

Active vs passive investment

What platforms to consider

So what is a pension?

The state pension

Private pensions

• WORKPLACE PENSIONS

How pension tax relief works

Final salary vs defined-benefit schemes

Where is my pension pot stashed until retirement?

Why you should move out of the default fund

Pensions if you are self-employed

Should you save in the Lifetime ISA instead?

How much should I save in a pension?

Where are my old pensions?

Income tax and the personal allowance

National Insurance

Understand your payslip and tax code

Tax reliefs and allowances

Pensions

Charity giving

Rent-a-room scheme and Airbnb

Cycle-to-work scheme

ISAs and the personal savings allowance

Investment returns

Marriage allowance

Childcare

Self-employment and tax

I’m self-employed, what business expenses can I claim?

I’m self-employed, do I need an accountant?

Other taxes worth knowing about. VAT

Stamp duty

Inheritance tax

Capital gains tax

Benefits you should claim if you are a parent, or about to be one. Child benefit

Shared parental leave, maternity and paternity pay

Energy. What’s on my bill?

Water

Broadband

How to switch your broadband

Mobile phones

Quick ways to cut your mobile data bill

Insurance. What you need and what you do not

Home insurance

• BUILDINGS INSURANCE

• CONTENTS INSURANCE

Mobile and gadget insurance

Car insurance

Travel insurance

Critical illness, mortgage protection and life insurance

Introduction: how does money make you feel?

How to discuss money with your loved ones

Should you get a joint account?

Cohabiting: your rights, or lack thereof

• YOU LIVE IN YOUR PARTNER’S PROPERTY BUT ARE NOT ON THE MORTGAGE, OR YOU OWN A PROPERTY AND YOUR BOYFRIEND OR GIRLFRIEND MOVES IN WITHOUT BEING ADDED TO THE MORTGAGE

• COHABITING BUT BOTH ON THE MORTGAGE

• WHAT HAPPENS IF ONE OF YOU DIES?

Accept it: no one knows what they are doing

Practical steps to feel better

What to do when you feel overwhelmed by your debts

What you can do about debt if you are very ill

The problem of overspending and how to deal with it

Introduction: doing good with money

Choosing a greener energy supplier

Choosing a more responsible bank

Choosing an environmentally friendly mortgage

Responsible pensions and investments

THANKS

About the Author

About the Publisher

Отрывок из книги

To Mum and Dad

Title Page

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If you have moved from abroad, bring a copy of your credit record from the main agency in your home country to the UK, then contact Experian, Equifax and Callcredit and ask them to put a note on your file that you are willing to provide a copy of your credit history. Monese offers bank accounts to people who have no proof of address, maybe because they have no credit record in the UK and therefore their name is not on a utility bill.

You spot a house you like advertised with an estate agent. You work out whether you can afford it and stamp duty based on whether you can get a mortgage. You can at this stage get a ‘mortgage in principle’, which is a non-binding agreement stating how much, based on your income, outgoings and credit score, a bank will lend you. If all looks good, you put in an offer for the property, which is hopefully accepted by the seller. You then appoint a property lawyer to start what is called the conveyancing process. You find the mortgage you want – it doesn’t have to be with the same bank that gave you a mortgage in principle – and apply for it for real.

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