Barclays Bank Complaints

The FSA’s figures showed that Barclays received 251,563 complaints, compared with 181,907 at Lloyds TSB , 168,888 for Santander and 147,109 against NatWest.

Santander, which has had a reputation for giving poor customer service, had the best turnaround rate on dealing with complaints. It closed 98pc of cases within eight weeks. This compared with turnaround rates of 77pc at Royal Bank of Scotland, 77pc at Lloyds TSB, 86pc at NatWest, 89pc at Barclays and 90pc at HSBC.

The FSA’s statistics showed that banks and other financial companies received around 10,000 complaints every day a total of 1.76 million in the first six months of the year.

Only last month the Financial Ombudsman Service said complaints against banks and other financial firms had doubled since this time last year.

Over the past quarter, the majority of disputes seen by the FOS have been for payment protection insurance (PPI), an insurance product that has been routinely sold to cover loan and credit card repayments. PPI accounted for nearly 70pc of complaints.

The FOS figures show that the service received an average of more than 900 new PPI cases each working day.

Student Loans Overcharging Graduates

Figures show the Student Loans Company has been forced to pay back more than £107million since the late 90s after taking cash from graduates who have already cleared their debts.

Repayments leapt by more than 15 per cent last year alone to some £22m, it was revealed.

A total of 40,050 graduates overpaid in the tax year ending in April 2010, compared with just 117 a decade earlier.

It is feared the scale of overpayments will soar in coming years when the cap on student tuition fees almost triples to £9,000 forcing students to borrow considerably more money.

Students criticised the system today, saying it often took months to reclaim their money.

Nicholas Lativy, a 26-year-old software engineer, told the BBC that he overpaid by £4,000 but had to make five phone calls and fax three separate sets of documents before his repayment was approved.

“The amount that has been overpaid demonstrates the system is broken,” he said.

“I had to take hours at a time out of work… every time you phoned up you’d get a different person on the line and it took a long time to explain the situation to them again and again.

“It was very frustrating and quite stressful.”

Student loan (NYSE: STU – news) repayments are collected through the UK tax system.

The SLC receives information about customer repayments once a year after employers make their annual tax returns. This results in a time lag and means some graduates overpay if the debt is wiped out during the tax year, a spokesman said.

According to figures released after a Freedom of Information request, 40,050 customers made £22.3m worth of overpayments last year. This compares with 36,617 graduates making £18.9m of overpayments in 2008/9 and 25,434 graduates overpaying by £15.9m in 2007/8.

In 2000/1 just £14,619 worth of overpayments were made by 117 students.

The total amount repaid by the SLC since 1998/99 now stands at £107.6m, figures show.

One graduate alone was overcharged by a total of £96,000 before having the money refunded.

But the SLC insisted it was a rare case and large overpayments were only usually made after the award of a huge bonus on top of a graduate’s usual monthly salary.

Officials also pointed out that all repayments included interest.

Separate figures also obtained by Radio 4’s You and Yours shows that the number of complaints received by the SLC almost doubled last year to 2,810.

One graduate who approached the programme said: “The whole system is in disarray.”

The SLC has since made changes to the system, allowing students approaching the end of repayments to switch to direct debit, giving them more control over when payments are stopped.

A spokesman said: “SLC has taken positive action to prevent over-repayments.

“Since introducing the direct debit scheme in 2009, we have contacted 106,000 customers to advise them that the direct debit option is available to them. 34,000 customers have either taken up the direct debit scheme or paid their loans off in full.”

Part Time Study Financial Help

Show me the money…

Well it’s not quite as straightforward as that. First you need to find out if you qualify as a part-time student. In order to be classed as part-time and receive funding you need to meet a number of specific criteria.

What’s the difference between a full-time and a part-time course?
A person who is classed as a full-time student is not someone who makes it to every one of their lectures! The definition of a full-time course is actually any mode of study whereby the annual total of units equals 120 credits. And, if you’re studying a course that has less than 120 credits per year then you would be classed as a part-time student and as such are entitled to help with your course costs and fees.

What am I entitled to?

Part-time HE students are entitled to two main types of grant support. You will find other forms of funding and we’ll come to those in a minute but for now let’s talk about the principal grants you could receive.

Fee grants do exactly what they say; they cover the cost of your tuition fees and are paid directly to your university.

Course grants are paid directly into your bank account and can be used for books, equipment, and travel expenses – basically, any course related costs.

Not everyone is entitled to the same amount of grant support. There are several factors that can decide exactly what type and how much support you will get.

Intensity: This is the percentage rating of your course compared with its full-time equivalent. So, if you study a part-time course for 60 credits and the full-time equivalent for 120 credits, the intensity is 50%.

Household Income: How much you earn will affect the grant amount you will be entitled to. Generally the more you earn the less you get. Also taken into consideration are your partner’s earnings and any dependent children you have living with you.

Benefits: If you are receiving Income Support, Housing Benefit, Council Tax Benefit or Income-Based Jobseeker’s Allowance you could automatically qualify for the full grant entitlement.

Disability: If you consider yourself to have a disability as defined under the Disability Discrimination Act then you might be entitled to more financial help then you think. The rules surrounding Intensity and Household Income change slightly if you have a disability so you should re-check the eligibility criteria.
But, there are some exceptions. Check that you don’t match any of the following criteria before you start applying:

Is the course duration less than one year?
Is the course Intensity less than 50%?
Will you be enrolling on a part-time Initial Teacher Training (ITT) course?
Have you already gained a first degree and will you be studying for a postgraduate qualification?
Will you be studying more than one part-time course at a time?
Am I eligible for any other financial help?
Yes! There are hundreds of other forms of financial support out there to help you, including:

Income related benefits are on offer to some part-time students. Any fee grants or course grants that you receive do not count as income when assessing your entitlement to benefits. If you are on low income and meet the relevant conditions you could be eligible for Income Support, Housing Benefit or Local Housing Allowance, and Council Tax Benefit.

Jobseekers’ Allowance is available for part-time students if they are out of work or work less than 16 hours a week and actively seeking work.

Additional Fee Support Scheme (AFSS) helps students in England that are on lower incomes and it’s a great fund to think about if you’re struggling to meet all your course costs.

Access to Learning Fund (ALF) is sometimes called a hardship fund and is provided by your university. It should give you some additional financial help whilst studying.

Disabled Students Allowance (DSA) offers part-time students with a disability the opportunity to apply for extra cash to help pay for items like specialist equipment. It the added advantage of not being income-assessed.

Student Loan Early

Student Loans

The first place to start is the official Student Loans Company. This government-backed scheme is the cheapest long-term debt you’ll ever get. Although you pay interest, the rate is linked to inflation, so in effect you will broadly repay the same amount that you borrowed in the first place.

The scheme can offer two types of support:

Student Loan for Tuition Fees – obviously, this will help pay your course fees and is paid directly to the university or college. The Student Loan covers your fees in full (up to £3,290 for 2010/11 or £3,225 for 2009/10).

Student Loan for Maintenance – to cover the essential day-to-day stuff like rent, bills, travel and books. The amount you can borrow will be assessed on factors such as your household income, and the cash will be paid directly into your bank account at the start of each term. The Student Loan for Maintenance is worth up to £4,950 if you live away from home, or more if you choose to study in London.

There’s nothing to repay until after you graduate, and even then you only repay 9% on your earnings above £15,000 – if you earn less than that you won’t have to repay a thing. Put it this way, someone earning the average £18,000 starting salary for a graduate would repay £5.19 a week – the price of a couple of pints of lager if you’re lucky!

Grants and Bursaries

These are practically free money! Grants and bursaries, whether given by the government, your college or university, or a charity, are free money that you don’t have to pay back.

Up to two-thirds of students are eligible for the government’s Maintenance Grant, sometimes referred to as the Special Support Grant. This cash is targeted at students from lower income families, with one-third of students eligible for the full amount – almost £3,000.

All universities and colleges will offer a range of bursaries. In fact, any student who pays full tuition fees and gets a full Maintenance Grant is guaranteed to be offered a minimum bursary of at least £329, although some institutions offer more than £1,000.

Your university will also have an Access to Learning Fund, which quite simply offers hardship grants for students in financial difficulty. Access Funds tend to run out quickly, so it’s best to get your application in as early as possible.

As well as government grants and university bursaries, hundreds of charitable trusts and foundations run their own grant schemes. These can offer sometimes smaller-scale, but just as important, financial support. Have a search through the Student Cash Point directory to find what’s available to you.

Scholarships

Again these tend to be non-refundable, just like bursaries or grants. They can be offered by colleges, universities and charities, whilst some companies will also provide industrial scholarships or sponsorships. The main difference from a bursary is that scholarships tend to be awarded on merit, for example academic achievement, sporting excellence, where you are from, or what subject you are studying.

There are some weird and wonderful funding schemes available. How’s about the John Lennon Memorial Scholarship, for students in Merseyside who have a passion for environmental issues, or the Onassis Foundation Scholarship to support postgraduate study at a Greek university?

Student Bank Accounts

All the big high street banks have special student offers. The best thing about these accounts is that they offer an interest-free overdraft, up to a set amount, so you can pretty much borrow money for free rather than pay crippling interest rates. Oh, and to try and tempt you to sign up, many banks offer tasty little sweeteners like free MP3 players and discounted rail travel, so there might be a few extra perks available!

Benefits

These are especially important to part-time students, students with children, or those with disabilities. There are a number of schemes, such as Income Support, Housing Benefit, and Incapacity Benefit that you may qualify for.

Debt Management Plans

A Debt Management Plan can be handled by yourself or on your behalf from a Debt Management Company. It can be a great debt solution for a temporary period, or when you can’t manage financially every month. Because a Debt Management Plan is informal, you or your creditors can opt out of the agreement at any stage.

Advantages of Debt Management

A Debt Management Plan is a Informal Arrangement, so you have complete control over it.

There is no need for formal Insolvency Procedures.

You are being pro-active about dealing with your debts, which could prevent further legal action.

You will have a lower more manageable payment every month.

Creditor pressure and harassment will be relieved.

Interest could be frozen.

Self-Help Debt Management

You can administer a Debt Management Plan by yourself and there are certain charitable organisations out there, to help you and show you how to go about this. You renegotiate your payment terms with your creditors showing them that you are struggling to meet payments, By doing this you will mostly find that they are sympathetic about it. The fact that you are dealing with the problem shows that you are committed to repaying the debt. If you leave it until your creditors are threatening some sort of action against you, they will be less sympathetic.

It isn’t easy to set up and maintain your own Debt Management Plan. You’ll need to be a ‘tough cookie’ in order to negotiate the best deal for you; they may in any case refer you to a Debt Management Company. This is discussed in the next paragraph.

Debt Managment Companies

A Debt Management Company is an organisation that negotiates and handles your Debt Management Plan on your behalf. There are so many firms that offer this service and most charge a fee for their service, which will come out of your monthly payment (usually ranging from 15% – 18%).

The good thing about a company handling your Debt Management Plan is they may have more weight when it comes to dealing with your creditors. In some cases, they may even get your interest frozen. They are normally very good at following structured guidelines for your income and expenditure and can normally come up with a reasonable monthly payment that will leave you comfortable to get by every month, whilst paying down your debt. Also, you will make one payment to the company and they will disperse it accordingly, instead of you having to handle all the payments yourself.

How long does a Debt Management Plan last?

The length of time of a Debt Management Plan depends wholly on how much the debt is, what your monthly payments are and how long your circumstances remain the same. You may want to remain in the plan until the debt is cleared, or you may see it as a more temporary measure. You may have little debt to pay off and have a lot of disposable income every month, or you may have higher debt and less disposable income.

If you want to remain in the Debt Management Plan until the debt is paid in full, a rough guide of the duration of the plan can be obtained by dividing your total debt by your new monthly payment amount giving you an approximation of the total number of months it is expected to last.

Property Tips

When we consider which property to buy, there are all sorts of factors about the property itself which influence how much we are willing to pay for it.

Does it have the right number of bedrooms? Are they of a decent size? Is there a garden, and somewhere to park the car? Is there an option to extend the property to add rooms as the family grows?

However, there are just as many external factors to take into account – the old adage of location, location, location really does apply. And it’s incredible just how much of a difference those external factors can make to the property’s value.

1) Good transport links

A new study by Nationwide Building Society has found that London properties situated close to an Underground or National Rail station can see their value jump by a frankly astonishing £20,000.

According to the mutual, homes located within 500 metres of a station will be around 7.2% more expensive than an identical property 1,500 metres from the station, the equivalent of £20,300. Properties found within 750 metres will carry a 5.2% premium, 1,000 metres a 3.4% premium and 1,250 metres a 1.6% premium.

Part of the reason this impact is so pronounced is London’s reliance on trains – more than a third of Londoners (34%) rely on them to get to work every day, compared to just 8% across Great Britain.

However, while trains may not have a massive impact on prices outside of the capital, there are plenty of other factors that do.

2) Good schools

Living near a decent school is a motivating factor for many when they look to buy a home, for the simple reason that they want their children to benefit from a good education. However, schools of a high standard can also add some serious cash to the property’s value.

According to a study last year, again by Nationwide, living near a top-performing primary school – in other words, one which achieved a 100% attainment rate in the most recent SAT exams – could add a whopping £20,000 to the value of a property, compared to the value of identical homes near to schools which finished in the bottom 25% of the SAT results.

Even a good, rather than exceptional, school will add an average of nearly £6,000 to the value of the home, not a sum to be sniffed at.

3) Good neighbours

How much your property is going to be worth can be affected by the people who live on your street.

A study by LV last year found that up to 10% can be knocked off the value of a home if it is located near to a dilapidated property. Just as problematic are noisy neighbours, who can take off an average of £18,000 from your home’s value if they tend to stay up all night playing music.

You should also consider your neighbours – or more accurately their properties – when thinking about ways to add value to your own home.

It’s one thing to add a huge extension to your property, which you reckon will take its value up to £400,000. However, if all the other properties in the street are worth £250,000, this may be a waste of time – how many buyers want to shell out £400,000 to live in a £250,000 street, no matter how nice that extension may be?

4) A good street name

What’s in a name? Well, according to property information site Zoopla.co.uk, the name of the street on which the property is situated can tell us a lot about how much that property is worth.

The site found that properties found on streets with ‘Hill’ in the name are worth an average of £341,666, well over 50% more than the average property price in the UK according to Zoopla’s own Zed Index.

Living on a ‘Lane’ also commands a sizeable premium according to the study, with average prices an incredible £328,378.

Other names making up the top five include Mews (£294,869), Park (£283,069) and Green (£269,861).

In contrast, the cheapest properties are found on roads featuring the name ‘Street’, with an average property price of £155,515 – less than half you can expect to pay to live on a Hill!

Mortgage Deals

Fresh from being granted a reprieve by the Coalition Government – the Tories had wanted to completely do away with the FSA – the UK’s financial regulator is starting to flex its muscles over the mortgage market.

Last week, it unveiled new proposals to clean up the mortgage arena, by clamping down on irresponsible lending and ensuring borrowers only take on mortgages they can afford.

All sounds very sensible, but the proposals have led to warnings that mortgages will become far more expensive, and inaccessible to many.

The new proposals

So what have the FSA actually proposed?

First up is requiring the verification of income on all mortgage applications, bringing to an end self-certification mortgages (though in fairness there haven’t been any self-cert mortgages available for some time).

It will no doubt come as a surprise to many of you that some lenders didn’t check the stated income was correct for all borrowers, but according to the FSA at the end of 2008 a staggering 52% of mortgages went through without the income of the borrower being fully checked. Even today, 43% of mortgages are processed in this fast-track fashion.

The FSA has also suggested there should be extra affordability tests for all mortgages to ensure a borrower is only taking on what they can afford, as well as making the lender ultimately responsible for assessing a borrower’s ability to pay.

So why have such seemingly obvious changes got so many people within the mortgage market so upset?

More expensive mortgages

Lenders and brokers have been falling over themselves to warn that these new rules will make mortgages far more expensive.

Because the new affordability checks are pretty stringent – independent proof of income will be necessary, through company records and tax returns – the lenders will need to spend longer on going through that documentation to check its veracity. And of course, for the lenders to perform these extra checks will cost money.

The critics reckon that those additional costs will be passed onto borrowers in the form of higher interest rates on mortgages.

In other words, we’ll be paying for the lenders to be doing what they should have been doing in the first place.

Mortgages out of reach

What’s more, the new affordability tests may go too far, preventing borrowers from being able to access finance.

The FSA wants lenders to assume borrowers will be taking out their mortgage on a capital repayment basis over a term of 25 years. However, plenty of first-time buyers will actually go for a longer term on their first mortgage, to ensure it is affordable – I know I did. To try to apply a one-size fits all approach to something as individual as whether you can afford that specific mortgage is asking for trouble, in my view.

The Council of Mortgage Lenders, the lender trade body, argues that the FSA’s “proposed conservative approach” may trap struggling households in their existing mortgage, eliminating the possibility of remortgaging to a cheaper deal. That option may be the difference between clawing their way out of their money troubles and retaining ownership of the home, or falling deeper and deeper into arrears until the home is repossessed.

Brokers have also argued that lenders have already ramped up their affordability tests since the onset of the credit crunch, making these changes unnecessary.

Vested interests

Undoubtedly there will be comments from readers on this arguing that of course the lenders and brokers don’t like these changes, as they will make their lives harder. And there is certainly an element of that.

The FSA also does at least seem to have its priorities right in wanting to ensure that lenders act more responsibly, and that borrowers who are tempted to take on more than they can handle, or commit fraud – and there have been plenty who have done just that – are prevented from doing so.

However, I do worry that the critics may have a point.

The number of mortgages being approved through 2010 has been pretty modest as it is, and these new rules will only further dent approval levels. And that is not exactly a good thing – the harder it is to get a mortgage, the more bumps in the road there will be when you’re involved with a chain and trying to move up or down the housing ladder. The whole thing could grind to a halt.

That could put downward pressure on house prices. But then again, you may think that’s a good thing – and long overdue.

The importance of advice

Whether you think the FSA is right or wrong, for me, these changes only serve to reinforce why it is so important to take advantage of the services on offer from mortgage brokers.

By using a mortgage broker, you’ll not only get independent advice on which type of mortgage is best for you, but also on how different lenders are likely to look at your application, as you can guarantee there will still be some variances in how strict the criteria is applied from lender to lender.

Working Family Tax Credits

Are you missing out on money that is rightfully yours or have you forgotten to renew tax credits that you were paid last year? You could be entitled to tax credits if you earn up to £66,000 in certain circumstances. Astonishingly, more than £3.9bn in tax credits went unclaimed last year, according to research by unbiased.co.uk, the professional advice website. With the renewal deadline a week away, those who currently claim their tax credits could find their payments stopped if they do not file renewal forms by July 31. Read on to ensure you are getting what you are entitled to.

WHAT ARE TAX CREDITS AND HOW DO I QUALIFY?

Working tax credit and child tax credit are benefits paid by HM Revenue & Customs.

You can claim the CTC even if you and your partner are working as long as your income is less than £66,000 a year. The amount you get will depend on how many children you have, how old they are and whether they have any disabilities.

The WTC is a payment to top up the earnings of working people on low incomes (typically about £16,000 or less) regardless of whether they have children. Extra amounts are payable if you have a disability, or if you work 30 hours or more a week and have child care costs.

HOW DO I QUALIFY FOR CHILD TAX CREDITS?

You can get CTC if your income is less than £66,000 a year and you are responsible for at least one child aged up to 16, or up to 19 if they are in full-time education or on an approved training course.

The amount of CTC you get will depend on circumstances and your income. You can get it on quite high gross incomes, including incomes of up to £58,000, or £66,000 if the child is under the age of one. If you live with your partner, your incomes will be added together when your claim is assessed.

HOW DO I QUALIFY FOR WORKING TAX CREDITS?

The WTC is complicated, but it comes down to how many hours a week you work and whether your income is ”low enough”. Depending on your income, you may qualify if you work at least 16 hours a week and are either responsible for a child or receiving disability benefits, or if you are over 50 and had been getting certain benefits for at least six months before you started work.

You may also qualify if you are 25 or more and you work 30 hours or more a week and are on a low income. Those over the age of 50 receiving benefits may be able to claim too.

HOW DO I CLAIM IF I LIVE WITH MY PARTNER BUT AM NOT MARRIED?

If you live together, you must make a joint claim. You claim both tax credits on the same form.

WHAT DO I NEED TO DO WITH MY RENEWAL FORMS?

Your renewal pack consists of an Annual Review notice, which provides details of the tax credits you received during the year and your personal circumstances.

If it’s correct you don’t need to do anything.

However, if you receive an Annual Review notice and an Annual Declaration, which asks you to provide details of your income for the tax year that started on April 6 2009 and ended on April 5 2010, you are required to return this by July 31, or your payments may be stopped.

WHAT IF MY CIRCUMSTANCES CHANGE?

If your circumstances change it can affect the amount of money you should be getting and you need to contact the Tax Credit Office.

Some changes need to be reported within one month, such as leaving your job, while for others you must notify the office within three months; for example, when you have a baby.

If you fail to tell the Tax Credit Office about a change straight away, they will not know until the next time you renew your tax credits, usually between April and July the following year. This could mean you have been overpaid; you may have to repay any excess and possibly a penalty of up to £300.

CAN I GET MY CLAIM BACKDATED?

You can normally get CTC and WTC backdated only for a maximum of 93 days before the date you apply. You do not have to explain why you did not claim earlier. You should clearly ask for backdated tax credit on your application form.

WHAT CHANGES TO TAX CREDITS WILL COME INTO EFFECT NEXT YEAR?

The Chancellor announced in his emergency Budget in June that CTCs would be withdrawn for families with a combined income of no more than £30,000, or possibly as low as £25,000 from April 2012. The baby element of the tax credit worth an additional £545 a year will also be abolished. While it is currently possible to backdate claims and certain changes of circumstances by three months, from April 2012 the backdating period will be one month only.

WHERE DO I GO FOR HELP?

If you need to report a change of circumstances or have any questions call the Tax Credit Helpline on 0845 300 3900, or textphone 0845 300 3909 if you have a hearing or speech impairment. Claiming tax credits can be complex, especially if your circumstances are not straightforward.

Debit Cards

How do debit and credit cards compare? Naturally, there will be occasions when it is better to use one rather than the other. Hence, here’s our detailed guide to which plastic is more fantastic!

Almost all plastic cards belong to one of six major payment-card systems, which are operated by American Express, Diners Club, JCB International, Maestro, MasterCard and Visa. These operators process transactions and transmit money through their card networks.

However, credit cards have been around a lot longer than debit cards have. The first major credit card, Barclaycard, was introduced forty years ago in June 1966. However, the UK’s first debit card, the Visa Delta card, using the brand name Connect, was launched by Barclays in 1987.

1. Ease of use

Debit and credit cards have fairly similar formats and appearances; for example, they all measure about 86mm by 54mm, and have a 16-digit number across the middle.

They work in pretty much identical ways, too. When you present your plastic card for payment, the retailer sends data to the bank which processes card transactions on its behalf, known as the merchant acquirer.

This data then passes to the card scheme (such as MasterCard or Visa), which then electronically contacts your card issuer to gain approval for the transaction. The relevant information will then be squirted back down the line, and your card issuer will debit your bank account or credit-card account and pass it down the chain. All this communication takes just a few seconds. Job done!

Most organisations which take debit cards also take credit cards, so we’ll call this round a draw.

½ point to both cards

2. Additional charges

Aha, this is where things get interesting! On some occasions, paying with a credit card can incur additional handling fees and interest, which gives debit cards the edge in these circumstances.

For example, some travel agents and other outlets which process large transactions will add a surcharge of, say, 2% if you pay by credit card. On a £2,500 family holiday, this adds £50 to the bill, so paying by debit card would be the better option. Furthermore, when you buy foreign currency on your credit card, some issuers apply the same charges and sky-high interest rates that they levy on cash withdrawals (see below). The same goes for online gambling and other cash-like transactions, so beware!

Another point to debit cards

3. Withdrawing cash

In 2005 alone, we used our plastic cards to make 2.7 billion cash withdrawals from automated teller machines (also known as ATMs, cash machines, holes in the wall, etc.), plus a further 108 million over-the-counter cash withdrawals.

Debit cards are ideal for drawing cash. Off the top of my head, I don’t know of any which charge fees for cash withdrawals from non-commercial machines or over-the-counter transactions in branches.

Credit cards, on the other hand, should NEVER be used for cash withdrawals! Why not? Simply because credit-card issuers charge withdrawal fees, typically 2.5% of the amount withdrawn, minimum £2.50 — and these fees are creeping up. In addition, most credit cards don’t provide any interest-free period for cash transactions, so you start paying interest at ultra-high cash rates (usually 20% APR or more) from day one. Credit cards and cash machines don’t mix, so don’t let them meet!

Another point to debit cards

4. Fraud and legal protection

If money is fraudulently taken from your current account or credit card account, and you haven’t been negligent with your card and PIN, then you are only liable for the first £50 of any theft and often the bank won’t even apply this excess.

However, if you’ve carelessly revealed your PIN (perhaps by writing it down on a document kept with your card), then you will foot the entire bill — and learn a valuable lesson about information security! On this count, credit cards and debit cards offer a similar level of consumer protection.

However, credit cards have the edge when it comes to paying for goods costing £100 or more, thanks to the valuable legal rights afforded by Section 75 of the Consumer Credit Act. If you order goods or services costing between £100 and £30,000, in the UK or overseas, and pay even a £1 deposit with your credit card, your card issuer stands in the shoes of the supplier if the goods fail to arrive, are damaged or faulty, or are otherwise unfit for their intended purpose. Hence, if you don’t want to lose your money if a supplier goes bust, stick to paying with your credit card for goods costing £100+!

Another point to credit cards

5. Interest-free periods and interest rates

If you always pay off your credit card in full every month, you can enjoy an interest-free period which typically lasts between 45 and 59 days. However, if you don’t, you can expect to pay annual rates of interest which average around 16% a year, but can exceed 30% APR! (To avoid this problem, you can use a 0% on purchases credit card, which offers an introductory interest-period lasting up to a year.)

On the other hand, when you make a purchase using a debit card, the money is debited from your bank account within a day or two, so there’s no effective interest-free period. What’s more, you won’t pay any interest while your current account is in credit — and you could earn more than 5% a year on your credit balances in a Best Buy current account. However, if your spending takes you overdrawn or you exceed any approved overdraft limit, you’ll face a frightening assortment of charges and mega-high interest rates, so stay out of the red if you don’t have prior permission!

Another point to debit cards

6. Cashback, loyalty and rewards schemes

There are dozens of cashback and rewards credit cards to choose from, the best of which pay up to 5% cashback for an introductory period. Personally, I do all of my shopping on my cashback card, as I pay off my entire bill each month by direct debit. You can easily earn hundreds of pounds a year doing this. Result!

Another point to credit cards

7.Credit limits

Finally, we come to the tricky subject of credit limits. With a current account, you can freely spend as much as you have in your account, plus the value of any approved overdraft. Thus, with a £2,000 credit balance and a £1,000 authorised overdraft, you could spend up to £3,000 before penalty charges kick in.

On the other hand, credit cards encourage millions of people to spend money that they don’t have. Indeed, many people see a £10,000 credit limit as a target, and assume that they have been given an extra £10,000 to go mad with in the shops. Bad move! With banks sending out credit-card offers in their millions every week, easy credit could easily become tough debt when times get hard. Hence, I’m awarding the final round to debit cards, not debt cards!

Final point to debit cards

The decision

After nine rounds, here is the judge’s decision: credit (debt) cards have a respectable 2 ½ points, but debit cards win the contest with 4 ½ points. Throw in the fact that most debit cards also double as cheque-guarantee cards, and debit cards win by an even bigger margin.

Tax Rebate

Can you really be sure you’re paying exactly the right amount of tax?

If you don’t know the answer to this question, then this article is for you. I’m going to explain how to check that deductions from your salary are as they should be, and how to claim a tax refund if they’re not.

Check your P60

If you have tax deducted from your earnings, or pension, through the PAYE (pay as you earn) system, you should receive a P60 from your employer, or pension company, every year. This document outlines your income and deductions for the tax year just ended.

If you have more than one source of employment, you should get a P60 from each employer. The same goes for people who have more than one pension.

You should always check your P60s thoroughly to make sure your tax code, and any tax which has been deducted, is correct. For example, if you’re under 65 and eligible for the basic tax-free personal allowance only, your code should be 647L this tax year (before the emergency budget).

This code is made up of the personal allowance divided by ten followed by the letter L. So, the code is 647L because the personal allowance is £6,475. But other tax codes may apply depending on your own circumstances. Visit the HMRC website to help you understand what your code should be.

Don’t underestimate how important this is. After all, HMRC admitted it had sent out thousands of incorrect codes earlier in the year, so it always pays to be vigilant.

Emergency codes

If your employer or pension company hasn’t been informed of your tax code by HMRC, they may have put you on what’s known as an emergency code, which could mean paying more tax than you need to. There are several reasons why an emergency code might apply. For example;

You have started a new job, but didn’t get a P45 from your previous employer.

You have started your first job after the beginning of the tax year, and you haven’t received any taxable state benefits, state pension or a company pension.

You have started a new job but you have had another job(s) or received taxable state benefits during the year.

Your tax code has changed during the year. This could happen if you started to receive company pension benefits or claim the state pension, for example.

You have started a new job but you were previously self-employed.
An emergency code usually ensures you receive the basic personal allowance, and therefore means you will earn some of your income tax-free. But it doesn’t make any provision for other reliefs or allowances you may qualify for. The emergency code is also 647L which is a bit confusing since it’s exactly the same as the code for taxpayers who are entitled to the basic personal allowance only.

That said, the 647L emergency code may also be followed by W1 (week 1) or M1 (month 1) which makes it easier to identify. This part of the code indicates that each week or month is being dealt with separately to give you an equal amount of net pay each time you receive your salary. But this doesn’t take account of any tax you might have paid earlier in the tax year, which could mean you’re paying too much.

If you think you’re paying emergency tax, check with your tax office and ask them to send you and your employer the correct tax coding. This will enable the right amount of tax to be deducted from your salary going forward. This will also give you the chance to claim any overpaid tax from HMRC.

How to claim a refund

Unless you pay your tax bill via self-assessment, there isn’t a specific form you can use to claim a refund if you think you have paid too much tax on your earnings or pension income. That said, if you find you have paid tax on your savings interest even though you’re a non taxpayer, you can reclaim it using form R40. (To ensure you receive gross interest from now on, send form R85 to all the banks and/or building societies you have savings accounts with.)

For a PAYE tax refund, you’ll need to contact HMRC in writing. It’s a good idea to mark your letter with ‘Repayment Claim’ so it can be prioritised.

Your claim should include the following information:

• Your personal details including your name, address, national insurance number and your PAYE reference shown on your pay slips.
• A rundown of your employment history including each of your PAYE reference numbers for different employers (if applicable), the dates when you were employed, your earnings, and the total amount of tax deducted.
• Explain why you think you’re entitled to a refund.
• Enclose copies of your P60s and P45s.
• Provide your bank details. If your refund can be transferred to your bank account it may speed the process up.
• Don’t forget to sign and date your letter.
• Keep a copy of your letter and arrange for proof of posting from the Post office.

In theory, your claim should be resolved within four weeks, but delays can occur particularly if security checks are required before a repayment can be granted. Be prepared to chase HMRC up if necessary. Keep a log of any calls you make to them including the date and time you called and the name of the person you spoke to, plus a summary of the conversation along with any advice you were given by the tax officer. This may come in handy if there’s a dispute over your claim further down the line.

Be aware of the time limits

Finally, you should know that the time limit for reclaiming overpaid tax is due to be cut from from almost six years to just four in 2012. However, for self-assessment taxpayers, the reduction has already taken place. So make sure you don’t miss the opportunity to get your tax back