What does the future hold for public sector contractors?

Tax has become something of a thorny issue in austerity Britain.

First it was Jimmy Carr who was pilloried for reducing his tax liabilities through the Jersey-based K2 scheme and it is now it is the BBC in the firing line after details emerged of some of its highest earners being paid via limited companies, therefore reducing the amount of tax they have to pay.

A subsequent investigation found that more than 2,000 contractors in the public sector are being paid via such vehicles, most notably Ed Lester, head of the Student Loans Company, who reportedly saves £40,000 a year in tax on his £160,000 a year salary.

public sector contractors

However, the landscape could be set to change dramatically after leaked documents obtained by the Professional Contractors Group showed a series of measures designed to reduce such payment schemes.

Internal memos sent between the Treasury and the Department for Innovation and Skills set out some major changes, the most notable of which is a plan to pay civil service contractors earning more than £220 a day or on contracts longer than six months as permanent employees.

These proposals have provoked strong reactions from those in the contracting industry, with the general consensus being that they could prove disastrous in the long term. Continue reading

Sorting Out Your Debts

Most people have gotten into debt by getting themselves into a cycle which never seems to end. The first step is spending more money than you earn. Once you start doing this, you’re going to create a deficit which is never going to be good for your bank account. You’ll then need to borrow money in order to fill in the gaps. Your next pay check will mainly be spent on paying back the debts. If you then continue this cycle, it will never stop, and the more debt you owe, the more difficult it is to pay it back.

  1. Start by doing a budget

By planning a budget, you’ll be able to set out everything in front of you and you won’t just carry on guessing at how much you’re earning and how much you’re spending. However, your budget needs to be realistic if it’s going to work properly. Don’t budget £30 a week for a family of four when you have been spending £120 per week in the past. The more realistic your budget is, the more chance it will work. Cut back on things that you know you will be able to cut back on, and leave yourself some room for having fun, such as dining out or going to the cinema once a month.

Sorting Out Debts

  1. Look for financial help

Look for financial help if the form of money that you won’t have to pay back. For example, you might be able to claim benefits if you’re earning under a certain amount. Single mothers, people working 16 hours a week and those on low wages can all claim benefits in various forms. While you might not want to look to the state for some help, it could help you out when it comes to your money matters.

  1. Use savings to pay your debts

It’s definitely a good idea to use any savings to pay your debts. While this might mean that you don’t have as much emergency money as you’d like, it’s a much better idea in the long term. If you have a lot of debt and you don’t pay it off straight away, you’ll start to amass lots of interest over the coming months and even years. By using savings to pay off your debts, you will ensure that you avoid paying all that interest, and in the future, you’ll be able to save more rather than use your wages to pay off debts.

Money Market Accounts – What to Compare

Determining and implementing a savings plan is key to financial stability. Your deposits will grow through earned interest and you can easily utilize your funds when necessary. However, there are other types of accounts available that have many of the same features of a savings account but offer a higher interest rate. A money market account is one such account. A money market account does have some restrictions (access to funds 6 times per statement cycle) however when compared to savings accounts, the interest rate is generally higher.

To best compare money market accounts keep these things in mind:

Minimums. Money market accounts generally require a minimum deposit and minimum balance. Sometimes these amounts are the same but they can vary. A minimum deposit is what is required to open the accounts. A minimum balance is the amount that must be kept in the account to avoid fees and earn interest on the account. Be sure to choose an account where you can easily keep the minimum balance as fees will reduce your savings.

savings plan

Interest. The amount of interest and the way it is calculated will determine the growth of your savings. You should choose a high interest rate to ensure your savings grow quickly but read the fine print – do not be drawn in by an offer where the interest rate offered will change after an initial period. Some institutions will also offered tiered interest where the higher the balance, the higher the interest rate. Be sure that your deposit will be earning interest so that your savings can continue to grow.

Terms & Conditions. Be sure to read about all of the features and requirements for the account being offered. Sometime there are additional requirements that must be fulfilled to open a money market account. If you have questions call Customer Service to get clarification.

Money markets can be a good alternative to savings accounts but consider your financial needs before opening an account. Make sure that this type of account is suitable for your financial needs before committing to an account. If this type of account is appropriate use the tips listed to find an account that fits your needs and watch your savings grow.

Overdraft Protection Guide – Avoid Fees

Even though you keep a record of your credits and debits in your check register you could get a notification that you bounced a check if you misjudge the timing of a deposit. It can happen to anyone. Many banks offer overdraft protection expressly for this situation. This account feature can eliminate the awkwardness of bouncing a check or having a problem with a debit card purchase. Overdraft protection allows you to link your checking account or money market account to a savings account so that funds can be made available to cover any debits from your transactional accounts.

Here is a quick guide to overdraft protection:

Cover the difference. If you overdraw your checking or money market account by writing a check or buying something on your debit card, and you have overdraft protection, the bank will pay the difference. Your checking or money market account will carry a negative balance but you will not be charged a fee for overdrawing your account.

Overdraft Protection

Line of credit. The amount that you overdraw your account is charged to a line of credit. The bank, based on their policies and your credit history, will calculate your available line of credit. These funds are used to cover the difference. The bank may charge you interest on the amount that is borrowed from your line of credit or may charge you an annual fee for the protection.

Payments. Payments to your line of credit are paid when you make a deposit. Funds over the amount owed to your line of credit will be deposited in your checking account. Be sure to read the terms and conditions for overdraft protection from your bank to understand if there are other requirements.

Abuse. If you abuse your line of credit the bank can take it away. The line of credit is a short term solution, not a loan from the bank. Be sure to balance your accounts properly – overdraft protection is only a safety net.

While overdraft protection is a handy feature, the best way to avoid fees is to avoid overdrawing your account. But if you make a mistake, knowing you have overdraft protection can help you avoid any embarrassing situations. An overdraft protection plan may be handled differently from institution to institution so be sure to understand how the plan at your institution works.

Same Day Loans – When to Apply

Borrowing money is not something to be entered into lightly, so judging when you should take the plunge is important. Thankfully, quick payday loans online can offer credit within hours of applying, meaning that if you do need some money in a hurry, it can be available to you. This works to give peace of mind; if an emergency crops up, you should be able to get your hands on some much-needed cash relatively quickly if you need to.

However, although the option is available to you, it doesn’t always mean that it’s the best thing to do. Looking at reputable short term loans lenders only and knowing when to apply for credit can be as much a factor of a successful loan than making the repayments on time – if you apply irresponsibly, then you may find yourself in trouble somewhere down the line.

Non Emergencies: I can’t make my money last the month

If you’re struggling to stretch your money out until your next payday, then credit should not be your first port of call. Many people resort to payday loans in this instance, which can plunge them into a debt spiral which is difficult to get out of. In other words, they take a payday loan to get them to the end of the month, but have to pay it off on their next payday, meaning that they have to borrow again to last until the end of the new month, and so on.

Same Day Loans

Although there are few restrictions on what a same day loan can be taken for, borrowing a large amount simply for regular living expenses can mean that you never really identify the problem areas in your spending. Before rushing into applying for credit, you should sit down and write out a budget. Note down your total income and list your total expenses. Looking at your bank statements for the past few months should help you to account for everything. From here you should be able to see where your problem areas are, and you should try to adjust your spending accordingly.

If you feel the need to get credit in non-emergency situations then it may be a sign that you’re not managing your finances properly. Always make sure that you can afford the repayments for whatever credit product you choose before applying. Think ahead more than a month or two down the line – will the repayments be just as manageable then? How are the first couple of repayments going to affect your future plans? Continue reading

How To Be Debt Free

Without even intending to, you are already in debt the minute that you graduate from college because of the student loans that you probably had to take advantage of. Once you secure a job, part of your entry-level salary will be allotted to paying off these loans. Then comes the credit card offers from different companies.

In order to have a means of purchasing things, you may want to sign up for one or a couple of these cards. Before you know it, you have more debt than you can easily repay because of the ease by which the plastic card can be used to purchase things. It is exactly the ease of access to credit which tempts most people into borrowing more than they can pay back. The result is being in debt even before you can build a solid credit history for yourself.

Most Popular Way To Be Debt Free: Debt Management Plans

The good news is that there are several ways for you to become debt free. If you only managed to acquire a lighter load of debt instead of very serious debt problems, then a solution is to go for debt management.

Debt Free

First, let us compare this with another solution to get rid of debts, which is to take out a debt consolidation loan. When you go online, there are plenty of companies which offer such loans to consolidate your debt. The idea is that instead of paying two, three or four credit card companies, you only have to pay one. The funds that you will get from the debt consolidation loan will be used to pay off your other loans.

At the end, you will only be left with one loan to pay which is supposed to have a lower monthly payment and a lower interest rate. The problem with going for this solution to be debt free is that you may not necessarily have a lower monthly payment and a lower interest rate means that you are paying off the new loan for a longer time frame. Continue reading

How much will the funeral cost?

The average price of a funeral in the UK in early 2010 was approximately £2,650, and the cost has tended to increase faster than inflation. According to the dailymail, the average price is now as high as £7,600!!! Nine out of ten people get just one quote. There are understandable reasons for this – most people do not have the stomach for shopping around or haggling over prices at a time of grief; moreover, for some people it might even seem disrespectful to the dead – but in many other aspects of life we would not spend that sort of money without looking around at the market to see what is on offer.

The way that funeral directors quote and itemise their services varies from one to another, so it can be hard to make a direct comparison. Nevertheless it is always worth obtaining more than one quote.

Funeral costs are largely made up of the following:

  • Professional services, such as those provided by the funeral director: advice, support, guidance
  • Additional services, chapel of rest, embalming, etc.
  • Coffin / casket
  • Transportation
  • Disbursements: these are payments made on your behalf, typically including burial costs, ministers / non-religious celebrants, funeral flowers, the wake, doctors’ fees. Payment of disbursements is usually required upfront by funeral directors.

funeral cost

Most if not all funeral directors offer a ‘basic funeral’. If that interests you, it is worth asking some to provide information about what is included and whether it is available to all or only those on limited means. It should be noted, however, that a funeral can cost considerably less than the ‘basic funeral’ offered by some funeral directors – that is if the family make some of the arrangements.

There is no VAT on funerals, but there is on things like flowers and catering.

Click here for a good article on the fixed price funeral trend.

The Society of Allied and Independent Funerals commissioned a MORI survey which reported in early 2010. In one week in January 2010 MORI contacted 50 independent funeral directors, 50 belonging to Co-operative, and 50 belonging to Dignity, Co-operative and Dignity being the two largest chains in the UK. They asked each funeral director for a quote for the same basic funeral. Broadly, the independent funeral directors were the cheapest and Dignity the most expensive. The average quote from the independent funeral directors was £2,353, from Co-operative £2,675, and from Dignity £2,916.

Financial assistance

Financial assistance from the state is available in certain circumstances: Funeral Payment from the Social Fund – if both the person who has died and the next of kin had/have no savings, and were/are in receipt of benefits (including pension credit, income support, housing benefit, council tax benefit, working tax credit (with a disability component), child tax credit). Continue reading