What are they:
Each tax year (April 6th to April 5th) everyone aged 16 or older gets a new Individual Savings Account, ISA, allowance. It’s a common misunderstanding ISAs are financial products in their own right, in fact they’re wrappers to put cash or shares or life assurance in so the tax man can’t get at it.
"Put simply mini-cash ISAs are savings accounts you don't pay income tax on."
Put simply, mini-cash ISAs are savings accounts you don't pay income tax on. Therefore there’s an extra 20% interest for basic rate and 40% for higher rate taxpayers. If you've any savings and weren't planning to use your ISA allowance without question open a mini-cash ISA. Even non-taxpayers benefit as the best cash-ISA rates are usually better than the best savings account rates. The only reason for not using a cash ISA would be if it were better used for share investment – see the ISA guide for details.
An annual £3,000 worth of cash may be saved in an ISA. The money may be withdrawn at any time without losing tax benefits, but it can’t then be returned to the cash ISA. An example should help clarify. Put £1,800 in and you’ve still £1,200 ISA allowance left, withdraw £1,000 from it, and you may still only contribute £1,200 more. The fact you’ve withdrawn the money doesn’t impact the allowance
How to choose a provider:
Choosing a provider depends primarily on interest rates, but watch for a number of tricks lenders use to confuse and complicate. The first is short term interest rate bonuses, these are hikes to attract your custom which soon disappear, so the interest rate quickly plummets below the advertised rate. Even more important for your long term financial fitness is watching the transfer penalties when you choose an ISA. You are allowed to change ISA provider and it should be easy. Some providers levy a fine when you leave them which may outweigh any gain you will make by moving. These may effectively trap you with a provider if it drops its rate, so check the penalties before you buy.
The only way to guarantee the rate won't drop is using a fixed rate mini-cash ISA, if you are willing to fix the rate for two or three years its likely your returns will be better than sticking with a standard ISA. The cost of this surety is the money must be locked in for the full term, so no early withdrawals.
Cash ISA Money Saving Checklist:
What is the interest rate? The higher the better
Is there a notice period? There's no problem with notice periods as long as the money won't be needed immediately. To be able to grab the cash immediately choose either an instant access account (which means you can walk into a branch and withdraw cash) or a no-notice account (postal or internet accounts, the money can be withdrawn without notice, but it will take a couple of days to send to you).
Does it have an introductory bonus? If it does work out the rate without the bonus. If it's low either choose another mini-cash ISA or note down when the bonus ends and be prepared to transfer.
Does it have transfer penalties? This could be the death knell as it locks you in to the cash ISA even if the rate drops avoid.
Improving the returns on existing cash ISAs
There’s a certain self satisfied smile on the face of providers when you open a mini-cash ISA. This is because they assume they’ve then got your business regardless of whether they’re paying a decent interest or not. Wrong.
Mini-cash ISA are effectively savings accounts which there's no need to pay income tax on. The cash ISA allowance for each tax year is £3,000 so for that tax year 2002-2003 it's already poss. If you have money in cash ISAs there are three reasons to consider changing provider - to up the interest earnt; fix the interest rate; or linking your cash ISA returns to the stock market.
Like ISAs themselves the transfer rules are unnecessarily complicated. Transfers must be like for like, in other words a mini-cash ISA must stay a mini-cash ISA. Current year’s cash ISAs must be moved whole, but previous years’ allowances may be split between different providers.
Wealth Warning. There is one big warning when transferring. Don’t just withdraw the cash to switch, do that and you’ll immediately lose the ISA tax benefits. Instead, simply fill out a transfer form with your new provider and they will perform the move.
Choosing a new provider
Before you move check if your current provider has any transfer penalties, roughly one in three do. Small penalties, like 30 days interest aren’t a problem. However a few providers try to lock you in with higher fines for moving up to about £50 fee. It's worth considering whether the provider you are moving too has transfer penalties or you'll find yourself the victim of the same problem again in future.
Not all cash-ISA providers will accept transfers in, if you are checking out the newspaper or internet best buy lists then a quick phone call should ensure the provider will. Just like savings accounts it's possible to take advantage It is possible to fix the cash ISA rate, but you must be willing to lock the cash away and this means you’re taking a punt on future UK interest rate movements.
A special choice to up the risk – Guaranteed Equity Bond mini-cash ISAs
The final option for current cash ISA providers is a much less well known product called a Guaranteed Equity Bond mini-cash ISA. These allow you to up the risk on your cash ISA money and potentially massively up the return by linking your cash ISA to the stock market.
Their operations are quite simple. You buy one which usually lasts for five years, during this time your money is locked in. The returns at the end of that period are linked to the performance of one or more usually a combination of stock markets. However rarely do providers offer the entire returns, usually it's a fixed percentage up to a set maximum. A typical product would pay 70% of the returns of the FTSE-All share index, up to a mImproving the returns on existing cash ISAs
GEB mini-cash ISAs are not usually an option when first opening an ISA, as if investors want higher risk they can opt for a stocks and shares ISA. However once you've already plumped for a mini-cash ISA the transfer rules mean it is impossible to switch it into becoming anything else – and GEB mini-cash ISAs offer a good half way house.
Mini-cash ISA are effectively savings accounts which there's no need to pay income tax on. The cash ISA allowance for each tax year is £3,000 so for that tax year 2002-2003 it's already poss. If you have money in cash ISAs there are three reasons to consider changing provider - to up the interest earnt; fix the interest rate; or linking your cash ISA returns to the stock market.
Like ISAs themselves the transfer rules are unnecessarily complicated. Transfers must be like for like, in other words a mini-cash ISA must stay a mini-cash ISA. Current year’s cash ISAs must be moved whole, but previous years’ allowances may be split between different providers.
Wealth Warning. There is one big warning when transferring. Don’t just withdraw the cash to switch, do that and you’ll immediately lose the ISA tax benefits. Instead, simply fill out a transfer form with your new provider and they will perform the move.
Choosing a new provider
Before you move check if your current provider has any transfer penalties, roughly one in three do. Small penalties, like 30 days interest aren’t a problem. However a few providers try to lock you in with higher fines for moving up to about £50 fee. It's worth considering whether the provider you are moving too has transfer penalties or you'll find yourself the victim of the same problem again in future.
Not all cash-ISA providers will accept transfers in, if you are checking out the newspaper or internet best buy lists then a quick phone call should ensure the provider will. Just like savings accounts it's possible to take advantage It is possible to fix the cash ISA rate, but you must be willing to lock the cash away and this means you’re taking a punt on future UK interest rate movements.
A special choice to up the risk – Guaranteed Equity Bond mini-cash ISAs
The final option for current cash ISA providers is a much less well known product called a Guaranteed Equity Bond mini-cash ISA. These allow you to up the risk on your cash ISA money and potentially massively up the return by linking your cash ISA to the stock market.
Their operations are quite simple. You buy one which usually lasts for five years, during this time your money is locked in. The returns at the end of that period are linked to the performance of one or more usually a combination of stock markets. However rarely do providers offer the entire returns, usually it's a fixed percentage up to a set maximum. A typical product would pay 70% of the returns of the FTSE-All share index, up to a mImproving the returns on existing cash ISAs
GEB mini-cash ISAs are not usually an option when first opening an ISA, as if investors want higher risk they can opt for a stocks and shares ISA. However once you've already plumped for a mini-cash ISA the transfer rules mean it is impossible to switch it into becoming anything else – and GEB mini-cash ISAs offer a good half way house.
Free International Phone Calls
The Basics:
Ringing Romania, calling Canada or dialling Denmark no longer needs to cost a fortune. There's a stark warning here though, be lazy and pick up your home phone to make the call and you may as well make the trip.
"The cost of calling Paris with BT is 28p a minute, call for more than 5 hours and you may as well travel on the Eurostar."
However it is possible to drastically cut the cost of calling abroad and make massive savings. Huge bulky cables have been laid under the world’s seas to transmit internet and commercial data, as voice calls take limited space they’re used to fill up any excess capacity and specialist providers, known as bucket carriers, tap this supply and sell it to you. These companies work by providing a freephone number (or a short four digit prefix number) to be called from your home phone which connects you to their network and then you dial the number you’re calling.
Bucket call providers tend to underbuy to ensure profitability, which can leads to connection problems. Bigger telecoms companies, like BT, can’t risk their customers, especially business customers, being unable to connect, so they overbuy, increasing prices. Call quality with bucket providers, though adequate, is slightly lower than BT as bucket providers piggyback phone signals on top of data calls. However the biggest reason BT can charge large is customer apathy, as it’s always too easy just to pick up the phone in your home regardless of cost.
Choosing a provider:
Bucket carrier prices vary widely depending on the country called and whether it’s to a landline or mobile, but almost invariably they're they tend to be substantially cheaper than BT. Finessing the very cheapest price is difficult, but there’s a sneaky way to find out what’s a good deal. The Talk Box is a special unit costing you buy that plugs into your home line, it monitors the cost of roughly 15 other phone providers and then matches their cheapest price for each specific call including international calls. However for just the odd call abroad, rather than buying this box, check Talk’s website to find it’s charge for each country so you know what a good price is. Even better, ask for some of Talk’s printed marketing leaflets, these detail which of the companies it monitors is cheapest for each destination. It won’t be the very cheapest, but it gets you close.
Growing in popularity is a different type of bucket carrier such as Just Dial. Here instead of setting up an account the number called is an 0870 national rate number. Once this has been dialled, you can simply call one of around 20 countries without any further charge. The cost is simply the cost of the national rate call billed on your home phone. This sounds great but actually it isn’t always the cheapest. For example use it to call the USA daytime via a BT phone and you’ll pay 8p a minute, however standard bucket provider Breathe has charged as little as 2p a minute to call the USA. However call Chile in the Evening using a phone on the BT Together discount package and it’s just 2p a minute, compared to 14p with the next cheapest bucket provider or £1.10 with BT straight. You can call from your mobile too, so if you’ve unlimited or free national rate calls, you won’t pay at all.
As a rule of thumb, if you're calling a common destination like the USA, Australia, Canada or a Western European country the standard bucket carriers will be cheaper most of the time. However for some more rare countries the 0870 operators come into their own.
The Savings: The savings to be made can be huge. By ringing around 18 providers to find a range of prices the savings were enormous. Call India five minutes each week and you’d pay BT £312 over a year, but with One Tel it’s just £83, a saving of around £230. Call each of Australia, India, Jamaica, Sweden and the USA for five minutes each week and BT will charge you £777 whereas with the cheapest providers it’s just £154. That’s over 80% cheaper saving you £633.
Ringing Romania, calling Canada or dialling Denmark no longer needs to cost a fortune. There's a stark warning here though, be lazy and pick up your home phone to make the call and you may as well make the trip.
"The cost of calling Paris with BT is 28p a minute, call for more than 5 hours and you may as well travel on the Eurostar."
However it is possible to drastically cut the cost of calling abroad and make massive savings. Huge bulky cables have been laid under the world’s seas to transmit internet and commercial data, as voice calls take limited space they’re used to fill up any excess capacity and specialist providers, known as bucket carriers, tap this supply and sell it to you. These companies work by providing a freephone number (or a short four digit prefix number) to be called from your home phone which connects you to their network and then you dial the number you’re calling.
Bucket call providers tend to underbuy to ensure profitability, which can leads to connection problems. Bigger telecoms companies, like BT, can’t risk their customers, especially business customers, being unable to connect, so they overbuy, increasing prices. Call quality with bucket providers, though adequate, is slightly lower than BT as bucket providers piggyback phone signals on top of data calls. However the biggest reason BT can charge large is customer apathy, as it’s always too easy just to pick up the phone in your home regardless of cost.
Choosing a provider:
Bucket carrier prices vary widely depending on the country called and whether it’s to a landline or mobile, but almost invariably they're they tend to be substantially cheaper than BT. Finessing the very cheapest price is difficult, but there’s a sneaky way to find out what’s a good deal. The Talk Box is a special unit costing you buy that plugs into your home line, it monitors the cost of roughly 15 other phone providers and then matches their cheapest price for each specific call including international calls. However for just the odd call abroad, rather than buying this box, check Talk’s website to find it’s charge for each country so you know what a good price is. Even better, ask for some of Talk’s printed marketing leaflets, these detail which of the companies it monitors is cheapest for each destination. It won’t be the very cheapest, but it gets you close.
Growing in popularity is a different type of bucket carrier such as Just Dial. Here instead of setting up an account the number called is an 0870 national rate number. Once this has been dialled, you can simply call one of around 20 countries without any further charge. The cost is simply the cost of the national rate call billed on your home phone. This sounds great but actually it isn’t always the cheapest. For example use it to call the USA daytime via a BT phone and you’ll pay 8p a minute, however standard bucket provider Breathe has charged as little as 2p a minute to call the USA. However call Chile in the Evening using a phone on the BT Together discount package and it’s just 2p a minute, compared to 14p with the next cheapest bucket provider or £1.10 with BT straight. You can call from your mobile too, so if you’ve unlimited or free national rate calls, you won’t pay at all.
As a rule of thumb, if you're calling a common destination like the USA, Australia, Canada or a Western European country the standard bucket carriers will be cheaper most of the time. However for some more rare countries the 0870 operators come into their own.
The Savings: The savings to be made can be huge. By ringing around 18 providers to find a range of prices the savings were enormous. Call India five minutes each week and you’d pay BT £312 over a year, but with One Tel it’s just £83, a saving of around £230. Call each of Australia, India, Jamaica, Sweden and the USA for five minutes each week and BT will charge you £777 whereas with the cheapest providers it’s just £154. That’s over 80% cheaper saving you £633.
Cut your water bills
The Basics:
The choice is simple. Either fit a water meter or stick to the old style bills. While the gas and electricity markets are staggeringly complex with masses of companies battling for customers, the water industry is still quite simple. Though England and Wales have seen privatisation, the markets are not yet open to competition - and Scotland and Northern Ireland still have publicly owned water companies.
There are two ways to pay and choosing the correct one is what allows you to save. The traditional method is a bill that depends on the rateable value of your home, regardless of how much water you use. It’s staggering that even though rates were abolished in 1990 and we’ve since had both the poll tax and council tax for local taxation - water bills still depend on rates. This roughly means the more your home can be rented out for, the more you’ll pay.
However the less common alternative is a meter which measures water usage. Companies I’ve exposed as being too costly in the past have often accused me of talking a load of excrement, in this case it’s true, the meters don’t only measure water consumption - as what comes in usually goes out, they also calculate your sewerage bill. Water companies must fit meters free of charge upon request unless it’s justifiably impractical. Use large amounts of water for non-necessities such as swimming pools, ultra power showers or sprinklers and a meter will be fitted automatically. If you switch to a water meter you have a right to switch back within 12 months or a month of getting your second measured bill, whichever is later. However, if you move into a home which already has a meter, you can’t switch back.
Choosing what to do:
The decision about whether fitting a meter will save you money depends on which water company’s area you’re in and your usage. Those with access to the internet can use www.buy.co.uk which quickly calculates whether a meter will cut your bills in most areas of England and Wales. It questions how often you use the washing machine and dishwasher and the number of showers and baths taken weekly by your household - often more than you think, four people showering daily is 28 showers a week.
For those without internet access, as a very rough rule of thumb if there are the same number or less people living in your house than there are bedrooms then check out fitting a meter. To do this contact your water company which should provide you with a water use calculator. If the savings looks to be minimal stick with your current bill as this at least gives you surety of knowing exactly what you will pay regardless of usage.
How much can you save:
For many people switching to a water meter will stop cash draining away. Take the example of a four bedroom home, with a current bill of £360 a year, with residents who shower more than bath. With five residents in the United Utilities area (North West water as was) you’re better off with the standard bill, however in the Thames Water area you’d save £65 a year switching. With just two people in the house you’d save £149 a year by fitting a meter in the United Utilites' area, £188 in Northumbrian Water’s area or £204 in the Thames area.
The choice is simple. Either fit a water meter or stick to the old style bills. While the gas and electricity markets are staggeringly complex with masses of companies battling for customers, the water industry is still quite simple. Though England and Wales have seen privatisation, the markets are not yet open to competition - and Scotland and Northern Ireland still have publicly owned water companies.
There are two ways to pay and choosing the correct one is what allows you to save. The traditional method is a bill that depends on the rateable value of your home, regardless of how much water you use. It’s staggering that even though rates were abolished in 1990 and we’ve since had both the poll tax and council tax for local taxation - water bills still depend on rates. This roughly means the more your home can be rented out for, the more you’ll pay.
However the less common alternative is a meter which measures water usage. Companies I’ve exposed as being too costly in the past have often accused me of talking a load of excrement, in this case it’s true, the meters don’t only measure water consumption - as what comes in usually goes out, they also calculate your sewerage bill. Water companies must fit meters free of charge upon request unless it’s justifiably impractical. Use large amounts of water for non-necessities such as swimming pools, ultra power showers or sprinklers and a meter will be fitted automatically. If you switch to a water meter you have a right to switch back within 12 months or a month of getting your second measured bill, whichever is later. However, if you move into a home which already has a meter, you can’t switch back.
Choosing what to do:
The decision about whether fitting a meter will save you money depends on which water company’s area you’re in and your usage. Those with access to the internet can use www.buy.co.uk which quickly calculates whether a meter will cut your bills in most areas of England and Wales. It questions how often you use the washing machine and dishwasher and the number of showers and baths taken weekly by your household - often more than you think, four people showering daily is 28 showers a week.
For those without internet access, as a very rough rule of thumb if there are the same number or less people living in your house than there are bedrooms then check out fitting a meter. To do this contact your water company which should provide you with a water use calculator. If the savings looks to be minimal stick with your current bill as this at least gives you surety of knowing exactly what you will pay regardless of usage.
How much can you save:
For many people switching to a water meter will stop cash draining away. Take the example of a four bedroom home, with a current bill of £360 a year, with residents who shower more than bath. With five residents in the United Utilities area (North West water as was) you’re better off with the standard bill, however in the Thames Water area you’d save £65 a year switching. With just two people in the house you’d save £149 a year by fitting a meter in the United Utilites' area, £188 in Northumbrian Water’s area or £204 in the Thames area.
Cut your gas and electricity bill
The Basics:
This is perhaps the easiest way to save money possible. If you haven’t changed supplier since the gas and electricity markets were opened up to competition you are almost undoubtably paying too much. A mix of regulation and competition laws means the old incumbent suppliers, that’s British Gas and your regional electricity company, charge substantially more than the cheapest on the market. If you have already switched supplier, then ensuring you’ve switched to the very cheapest can still cut your bills by up to 10%.
Shifting supplier is not a big deal, you keep the same pipes, circuits and wires, the only difference is the customer service and billing. Your new supplier will perform the switch for you - all you need do is sign the right forms and take a meter reading.
Choosing the supplier:
Finding the right supplier on your own is very difficult as which provider is the cheapest for you depends on where you live and your own individual usage. There’s no hard and fast rule. However a range of phone and internet comparison services do all the work for you. They are listed on the website of the energy regulator Ofgem. You simply plug in your details, either guessing, from a past bill or best of all using your Kilowatt hours and they tell you exactly who your cheapest is. Of the websites available www.uswitch.com offers the largest selection of variables and gives the most accurate answer, though it takes slightly longer whereas www.buy.co.uk is the easiest to use.
Even with these comparison engines there are a number of things to watch
Dual Fuel isn’t cheaper. Energy companies try to persuade us that getting gas and electricity from the same suppler makes it cheaper. However in the vast majority of cases it’s more expensive than using the cheapest standalone suppliers.
Direct Debit is cheaper You can save up to 10% paying by fixed monthly direct debit. This means you pay a set amount straight from your bank account. If you’ve overpaid you will be refunded at the end of the year. If you’ve underpaid you will need to pay the extra. The reason this is cheaper is that the companies are sure you won’t default and they earn extra interest on your money due to the overpayments.
Know your KiloWatt hours
Comparison sites require your postcode and estimated current bills, but be ultra nerdy and use the KiloWatt hours figure and your result will be more accurate.
How much can you save: A family in Manchester spending £700 a year with their regional electricity company and British Gas’s standard policy paying each quarter could save around 15% by switching to the cheapest providers or 25% using direct debit. That’s over £165 a year, more than enough to for a weekend away with a cosy log cabin with a real fire for warmth.
Added extra: If there is someone over 60 living in your house - one energy supplier TXU energi (formerly Norweb and Eastern Energy) provides a special flat fee service called StayWarm. You get both of your gas and electricity from Staywarm, but rather than paying a fee depending on how much energy you use, you simply pay a fee depending on the number of people and rooms in your house. This service provides the surety that you always know how much you will be paying. It is often the cheapest, but not always, the best thing to do is find the cheapest normal suppliers using the recipe above, then compare it to StayWarm.
You can choose to have Green Energy supply. What this means in fact is energy companies use environmentally friendly sources of energy to an amount equivalent of all people choosing the green tariff. It is slightly more expensive, but you can still use the price comparison engines to find the cheapest for you.
This is perhaps the easiest way to save money possible. If you haven’t changed supplier since the gas and electricity markets were opened up to competition you are almost undoubtably paying too much. A mix of regulation and competition laws means the old incumbent suppliers, that’s British Gas and your regional electricity company, charge substantially more than the cheapest on the market. If you have already switched supplier, then ensuring you’ve switched to the very cheapest can still cut your bills by up to 10%.
Shifting supplier is not a big deal, you keep the same pipes, circuits and wires, the only difference is the customer service and billing. Your new supplier will perform the switch for you - all you need do is sign the right forms and take a meter reading.
Choosing the supplier:
Finding the right supplier on your own is very difficult as which provider is the cheapest for you depends on where you live and your own individual usage. There’s no hard and fast rule. However a range of phone and internet comparison services do all the work for you. They are listed on the website of the energy regulator Ofgem. You simply plug in your details, either guessing, from a past bill or best of all using your Kilowatt hours and they tell you exactly who your cheapest is. Of the websites available www.uswitch.com offers the largest selection of variables and gives the most accurate answer, though it takes slightly longer whereas www.buy.co.uk is the easiest to use.
Even with these comparison engines there are a number of things to watch
Dual Fuel isn’t cheaper. Energy companies try to persuade us that getting gas and electricity from the same suppler makes it cheaper. However in the vast majority of cases it’s more expensive than using the cheapest standalone suppliers.
Direct Debit is cheaper You can save up to 10% paying by fixed monthly direct debit. This means you pay a set amount straight from your bank account. If you’ve overpaid you will be refunded at the end of the year. If you’ve underpaid you will need to pay the extra. The reason this is cheaper is that the companies are sure you won’t default and they earn extra interest on your money due to the overpayments.
Know your KiloWatt hours
Comparison sites require your postcode and estimated current bills, but be ultra nerdy and use the KiloWatt hours figure and your result will be more accurate.
How much can you save: A family in Manchester spending £700 a year with their regional electricity company and British Gas’s standard policy paying each quarter could save around 15% by switching to the cheapest providers or 25% using direct debit. That’s over £165 a year, more than enough to for a weekend away with a cosy log cabin with a real fire for warmth.
Added extra: If there is someone over 60 living in your house - one energy supplier TXU energi (formerly Norweb and Eastern Energy) provides a special flat fee service called StayWarm. You get both of your gas and electricity from Staywarm, but rather than paying a fee depending on how much energy you use, you simply pay a fee depending on the number of people and rooms in your house. This service provides the surety that you always know how much you will be paying. It is often the cheapest, but not always, the best thing to do is find the cheapest normal suppliers using the recipe above, then compare it to StayWarm.
You can choose to have Green Energy supply. What this means in fact is energy companies use environmentally friendly sources of energy to an amount equivalent of all people choosing the green tariff. It is slightly more expensive, but you can still use the price comparison engines to find the cheapest for you.
Slash your mobile bills
It’s easy to guarantee a mobile calls at home phone prices, just invest in a ten-mile long cable. Alternatively, it’s possible to sneakily bypass mobile phone network’s systems using special override services. This will cut mobile call costs to 2.5p a minute to UK landlines and 3p to the USA, slashing your bill by 75%.
Override providers that allow cheap overseas calls to be made from home phones are commonplace. They work by providing freephone numbers to access their networks, thus ‘overriding’ the usual home phone provider. The mobile networks kibosh this working on their phones, however there are a limited number of override providers who work round the system. The choice depends on the mobile network you use.
Orange Contract Customers
Dial a freephone number on an Orange contract phone, and providing it’s on an Orange tariff calls to freephone numbers are free. Therefore dial the override number and there’s no charge for connecting to their network, only the override provider’s charge for the actual call.
Unsurprisingly, Orange isn’t fond of these providers snaffling their revenues, so it hits back. This starts a cat and mouse game. Orange’s prime weapon is adding a charge to specific freephone numbers, so when they’re called, the dulcet female tones that characterise such voices say “ All calls to this calling card service are now at a standard rate.” Yet the override providers then slap back at Orange by issuing a new freephone access number that is still free – and all customers need do is call the main switchboard to be told this new number. The cycle normally takes about 10 weeks.
The whole thing is a legal grey area, override providers aren’t breaking any rules by issuing freephone numbers, and Orange may legitimately block them to protect it’s investment. There is a chance calling a override may breach your mobile contract, it’s worth checking, but in truth their usual reaction is to target numbers not customers.
The bureaucracy involved means few override providers find it worth the effort. The current cheapest and easiest system is operated by One-Tel. It’s freephone override number means calls via it on an Orange mobile are 2.5p a minute to UK landlines at all times (plus a 3p connection fee) and to call mobile’s it’s 20p peak, 15p off-peak and 8p at weekends. Call overseas on the mobile and it’s cheap too, just 3p a minute to the USA. One further tip, set the override number on the mobiles speed dial to make it easier to use.
Other Network’s Customers
Other networks charge for calls to freephones, usually at the same rate as normal calls to landlines. This means savings are only possible on calls to mobiles and overseas. As there’s no cat and mouse game here, there’s a wider range of providers as well as One-Tel, though it is still the cheapest for many calls. Planet Talk operates via a normal land line number, it’s roughly similar tariffs to One-Tel, but it’s calls to mobiles is 17p at all times, making it cheaper than One-Tel during the day.
Regardless of the mobile network, the possible savings are huge. Using Orange’s Everyday 50 tariff to make just over two hours a week of mixed calls and a ten minute call to Australia would cost �30.75 a week, that’s �1,600 a year. Use One-Tel for all calls except to UK landlines off-peak and Orange Mobiles and it’d cost just "8 a week, �415 a year, an enormous saving of �1,185. With O2, BT Cellnet of old, the same calls cost �29.80 a month, but make calls to mobiles and overseas on One-Tel and Planet Talk overrides numbers and this bill is cut by 40% to �18 a month, saving �610 a year, making it definitely worthwhile calling your friends to tell them about it.
Override providers that allow cheap overseas calls to be made from home phones are commonplace. They work by providing freephone numbers to access their networks, thus ‘overriding’ the usual home phone provider. The mobile networks kibosh this working on their phones, however there are a limited number of override providers who work round the system. The choice depends on the mobile network you use.
Orange Contract Customers
Dial a freephone number on an Orange contract phone, and providing it’s on an Orange tariff calls to freephone numbers are free. Therefore dial the override number and there’s no charge for connecting to their network, only the override provider’s charge for the actual call.
Unsurprisingly, Orange isn’t fond of these providers snaffling their revenues, so it hits back. This starts a cat and mouse game. Orange’s prime weapon is adding a charge to specific freephone numbers, so when they’re called, the dulcet female tones that characterise such voices say “ All calls to this calling card service are now at a standard rate.” Yet the override providers then slap back at Orange by issuing a new freephone access number that is still free – and all customers need do is call the main switchboard to be told this new number. The cycle normally takes about 10 weeks.
The whole thing is a legal grey area, override providers aren’t breaking any rules by issuing freephone numbers, and Orange may legitimately block them to protect it’s investment. There is a chance calling a override may breach your mobile contract, it’s worth checking, but in truth their usual reaction is to target numbers not customers.
The bureaucracy involved means few override providers find it worth the effort. The current cheapest and easiest system is operated by One-Tel. It’s freephone override number means calls via it on an Orange mobile are 2.5p a minute to UK landlines at all times (plus a 3p connection fee) and to call mobile’s it’s 20p peak, 15p off-peak and 8p at weekends. Call overseas on the mobile and it’s cheap too, just 3p a minute to the USA. One further tip, set the override number on the mobiles speed dial to make it easier to use.
Other Network’s Customers
Other networks charge for calls to freephones, usually at the same rate as normal calls to landlines. This means savings are only possible on calls to mobiles and overseas. As there’s no cat and mouse game here, there’s a wider range of providers as well as One-Tel, though it is still the cheapest for many calls. Planet Talk operates via a normal land line number, it’s roughly similar tariffs to One-Tel, but it’s calls to mobiles is 17p at all times, making it cheaper than One-Tel during the day.
Regardless of the mobile network, the possible savings are huge. Using Orange’s Everyday 50 tariff to make just over two hours a week of mixed calls and a ten minute call to Australia would cost �30.75 a week, that’s �1,600 a year. Use One-Tel for all calls except to UK landlines off-peak and Orange Mobiles and it’d cost just "8 a week, �415 a year, an enormous saving of �1,185. With O2, BT Cellnet of old, the same calls cost �29.80 a month, but make calls to mobiles and overseas on One-Tel and Planet Talk overrides numbers and this bill is cut by 40% to �18 a month, saving �610 a year, making it definitely worthwhile calling your friends to tell them about it.
Savings Accounts
The Basics:
Savings accounts are the high interest, low functionality accounts, which should be used to maximise your interest but give you access to it when you need it. However you should always use up your mini-cash ISA allowance before putting money in a savings account, if you haven’t read the following section of the crash diet first.
With savings accounts you used to need to wait 30, 60 or even 180 days to access your cash these days you can get pretty much immediate access to your cash at a better rate. There are ‘instant access’ accounts which mean you can withdraw your cash immediately and ‘no notice’ accounts which allow instant withdrawals, but due to the practicalities of getting the cash, i.e. it must be posted to you, will take a few days.
Choosing an account:
Choosing a savings accounts should simply be a case of choosing the account with the highest interest, however even with this relatively simply product there are a few things to watch out for.
Bonus rates: temporary initial rate increases to make the account seem more attractive to new customers - if you’re planning to stick with one account for the longer term, ignore the extra bonus amount. However if you have the energy to be a rate hopper, following account to account then milk the companies offering bonuses and move once that period is over.
Tax: The interest on the money you keep in your savings is automatically taxed at 20%, which is the rate of tax basic rate taxpayers pay on savings. This means those who pay basic rate tax needn’t do anything further. However if you are in the higher rate tax bracket, you should be paying 40% tax on your savings, when you declare the interest in the Inland Revenue Self Assessment form, the extra tax you are eligible for needs to be taken into account there. For non-taxpayers, people earning below the basic threshold, you can ask your bank for an IR85 form and then your interest will be paid without the 20% tax being taken off.
Rates are variable: The rate savings accounts pay is variable and can and will change as you have your money in it. Rates tend to move both when the UK’s standard interest rate as set by the Bank of England moves and when the product provider changes the rate for its own advantage. This means if you don’t monitor the interest rate you receive, you can lose out. However it should be easy to move your money to a better paying account. You just withdraw the money from the current place and deposit it in a new one.
Suck, slap and flog
Many banks use what I like to call the suck, slap and flog technique. They suck you in with high rates, slap the rates down without telling you and then flog a new account. Keeping their name in the best buy table, their costs at rock bottom and you in blissful ignorance assuming its your account that’s the top payer. So its important to check very carefully what you’re account is paying.
Choosing an account
Internet only: www.egg.com no-notice account has a bonus guaranteeing new account holders a 4.6% rate, before it drops to 4% after six months. For those wanting to avoid bonus rates, www.nationwide.co.uk has an e-saver account paying 4.25%.
Notice accounts: Those with more than £1,000 can earn 4.45% in the Nottingham Building Society’s Post It account which requires 90 days notice to withdraw money. This includes a bonus of 0.5% interest for a year.
No Notice accounts: Scottish Widows Bank pays 4.05% with the rate increasing slightly as more is deposited, however 0.5% of this is an interest bonus for six months. The best non-bonus account is Intelligent Finance’s phone and net account at 4.01%.
As savings rates vary all the time, there is no correct answer to which is the best at any moment in time. If you are happy to bank on the internet, you will be paid a better interest rate. However there are oodles of sources to tell you what the best rate is. Any of the broadsheet’s or mid market newspapers money sections list best buy savings accounts tables. Alternatively internet sources such as www.moneyfacts.co.uk have daily updated best buy lists – though as always with best buy tables – don’t simply go for the top rate – check their tricks.
How much can you save:
There’s considerable gain to be made from switching your savings to a better paying account. There are many savings accounts, which unbeknown to the saver are paying pitifully low amounts of interest. In real terms often this means the saver is losing money as the interest is lower than inflation. It’s very easy to up returns.
Even when interest rates are low, it’s possible to make substantial gains by shifting to the right savings account. With five thousand pounds over three years in a savings account the worst payers will give you just £75 worth of interest. However a top paying account at 5% would return £790 that’s over ten times as much
Savings accounts are the high interest, low functionality accounts, which should be used to maximise your interest but give you access to it when you need it. However you should always use up your mini-cash ISA allowance before putting money in a savings account, if you haven’t read the following section of the crash diet first.
With savings accounts you used to need to wait 30, 60 or even 180 days to access your cash these days you can get pretty much immediate access to your cash at a better rate. There are ‘instant access’ accounts which mean you can withdraw your cash immediately and ‘no notice’ accounts which allow instant withdrawals, but due to the practicalities of getting the cash, i.e. it must be posted to you, will take a few days.
Choosing an account:
Choosing a savings accounts should simply be a case of choosing the account with the highest interest, however even with this relatively simply product there are a few things to watch out for.
Bonus rates: temporary initial rate increases to make the account seem more attractive to new customers - if you’re planning to stick with one account for the longer term, ignore the extra bonus amount. However if you have the energy to be a rate hopper, following account to account then milk the companies offering bonuses and move once that period is over.
Tax: The interest on the money you keep in your savings is automatically taxed at 20%, which is the rate of tax basic rate taxpayers pay on savings. This means those who pay basic rate tax needn’t do anything further. However if you are in the higher rate tax bracket, you should be paying 40% tax on your savings, when you declare the interest in the Inland Revenue Self Assessment form, the extra tax you are eligible for needs to be taken into account there. For non-taxpayers, people earning below the basic threshold, you can ask your bank for an IR85 form and then your interest will be paid without the 20% tax being taken off.
Rates are variable: The rate savings accounts pay is variable and can and will change as you have your money in it. Rates tend to move both when the UK’s standard interest rate as set by the Bank of England moves and when the product provider changes the rate for its own advantage. This means if you don’t monitor the interest rate you receive, you can lose out. However it should be easy to move your money to a better paying account. You just withdraw the money from the current place and deposit it in a new one.
Suck, slap and flog
Many banks use what I like to call the suck, slap and flog technique. They suck you in with high rates, slap the rates down without telling you and then flog a new account. Keeping their name in the best buy table, their costs at rock bottom and you in blissful ignorance assuming its your account that’s the top payer. So its important to check very carefully what you’re account is paying.
Choosing an account
Internet only: www.egg.com no-notice account has a bonus guaranteeing new account holders a 4.6% rate, before it drops to 4% after six months. For those wanting to avoid bonus rates, www.nationwide.co.uk has an e-saver account paying 4.25%.
Notice accounts: Those with more than £1,000 can earn 4.45% in the Nottingham Building Society’s Post It account which requires 90 days notice to withdraw money. This includes a bonus of 0.5% interest for a year.
No Notice accounts: Scottish Widows Bank pays 4.05% with the rate increasing slightly as more is deposited, however 0.5% of this is an interest bonus for six months. The best non-bonus account is Intelligent Finance’s phone and net account at 4.01%.
As savings rates vary all the time, there is no correct answer to which is the best at any moment in time. If you are happy to bank on the internet, you will be paid a better interest rate. However there are oodles of sources to tell you what the best rate is. Any of the broadsheet’s or mid market newspapers money sections list best buy savings accounts tables. Alternatively internet sources such as www.moneyfacts.co.uk have daily updated best buy lists – though as always with best buy tables – don’t simply go for the top rate – check their tricks.
How much can you save:
There’s considerable gain to be made from switching your savings to a better paying account. There are many savings accounts, which unbeknown to the saver are paying pitifully low amounts of interest. In real terms often this means the saver is losing money as the interest is lower than inflation. It’s very easy to up returns.
Even when interest rates are low, it’s possible to make substantial gains by shifting to the right savings account. With five thousand pounds over three years in a savings account the worst payers will give you just £75 worth of interest. However a top paying account at 5% would return £790 that’s over ten times as much
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