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Answers to YOUR Questions

See what's bugging others. 

And what our experts say.

Personal Finance | Budgeting | Saving

How can I pimp my credit score?

Sonia, Greater London

09 August 2018

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Holly Mackay

There are many ways to repair your credit score and this article from This is Money is very informative www.thisismoney.co.uk/money/cardsloans/article-1585131/Improve-credit-rating-history-score.html

 

As is the following detail on the Money Advice Service website: www.moneyadviceservice.org.uk/en/articles/how-to-improve-your-credit-rating

 

Good luck.

 

 

Just be aware...

We are not regulated to give personal financial advice - This isn’t full-fat regulated financial advice. Boring Money is a publisher and not regulated by the FCA. 

This means we can't help with specific personal circumstances or recommend specific investment products. It also basically means that if we say something daft, you have no recourse to come back and complain.

We’re only allowed to give you a steer or share an opinion or tell you the facts - That said, we promise that our answer to you is an independent unbiased perspective with no commercial gain to make. If you need regulated financial advice, you can find a good adviser via sites such as Unbiased & Vouchedfor.

JISA | Budgeting | Investments | Literacy for kids

I have a delightful 12 year old daughter and she has just opened her first bank account. I am dreadful with money but I would like to know what I should teach her so that she does not pick up my bad financial habits. Do you have some top tips of things to teach our children so they are wise and responsible with money please?

Louise, Greater London

11 September 2017

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Lesley James

Hi Louise. Wow, there are so many things I would say to my own younger self had I the chance, so its fantastic to hear your desire to help your daughter onto the right path.

Your daughter is not (yet) working, so for now, the money she sees being spent is your money. I would therefore suggest involving her in the household budget. Be open about decisions you make. And (if you’re brave enough) perhaps also about the impact of your own less than great decisions. You consider yourself ‘dreadful with money’ so, what have you had to sacrifice or miss out on as a result?

If you haven't already, then pocket money in exchange for completing certain tasks or simply passing over control of some of her personal expenditure will also help. The management of phone credit, for example, what is used, and what happens when it runs out. And let her put any savings she makes into that account she’s opened up.

Longer term, however, I have a tip for you both. In ‘The Richest Man in Babylon’ (George Samuel Clason), we are advised to ensure that “a part of all we earn remains ours to keep”. A tenth in fact, if possible. Or as Monica's father in Friends says "10% of your paycheck - where does it go?" (In the bank...)

Starting out with the attitude that you control your expenses and save often creates very positive life long habits. And wealth. Teaching your daughter could also be a great way to start trying to organise the same for your own finances.

Its never too late for us to make a difference to our long term financial health. Good luck, therefore, and happy saving.

 

 

Just be aware...

We are not regulated to give personal financial advice - This isn’t full-fat regulated financial advice. Boring Money is a publisher and not regulated by the FCA. 

This means we can't help with specific personal circumstances or recommend specific investment products. It also basically means that if we say something daft, you have no recourse to come back and complain.

We’re only allowed to give you a steer or share an opinion or tell you the facts - That said, we promise that our answer to you is an independent unbiased perspective with no commercial gain to make. If you need regulated financial advice, you can find a good adviser via sites such as Unbiased & Vouchedfor.

Pensions | Budgeting | Saving

What might a savings pot of £100,000 get me as a retirement income?

Aboodi, Greater London

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Holly Mackay

Lots of people we speak to don’t know how much their current savings will actually get them as an annual income once they retire. As a very very crude rule of thumb, we divide the total you have by 20 to get an estimation. So if you have £100,000 saved, you might use £5,000 a year of pension income as a guide.

To get a more specific answer tailored to your circumstances, use this tool from the Money Advice Service.

This is based on you buying what we call an ‘annuity’. This is trading in your lump sum for a fixed annual income until you gasp your last. Your other option is what we call ‘draw down’ – to stay invested in the markets, so you still have ‘skin in the game’, and to withdraw money from this pot as it (hopefully) grows cos stock markets go up over time. So the idea is that you might take out £5,000 a year BUT the £100,000 investment pot might go up by about 4-5% a year.

You should also take into account your state pension entitlement. The rules have changed recently and this has a particularly significant impact on women in their early 60s today. This calculator will tell you at what age you will be eligible for the State Pension. Loads of us grew up with the idea stuck in our heads that this was 60. Well that’s not true anymore. For most in their 40s today, it is more likely to be 67.

As a rough guide here, think about how many years you have paid National Insurance for/how long you have worked. Multiply every year by £4.44 and that will give you your weekly State Pension estimate. 20 years all in? That’s about £90 a week. Or another £4,600 a year.

So all in, if you have £100,000 saved and you have worked for 20 years, you can expect an annual retirement income of just under £10,000 a year – rough guide only!

This Retirement Income guide from us will help you walk through your numbers. Good luck!

 

 

Just be aware...

We are not regulated to give personal financial advice - This isn’t full-fat regulated financial advice. Boring Money is a publisher and not regulated by the FCA. 

This means we can't help with specific personal circumstances or recommend specific investment products. It also basically means that if we say something daft, you have no recourse to come back and complain.

We’re only allowed to give you a steer or share an opinion or tell you the facts - That said, we promise that our answer to you is an independent unbiased perspective with no commercial gain to make. If you need regulated financial advice, you can find a good adviser via sites such as Unbiased & Vouchedfor.

Personal Finance | Budgeting | Saving

What is a credit score and why do I need it?

Cameron, Greater London

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Holly Mackay

A credit score is a magic number that is used by lenders to assess how reliable you are as a borrower. This number is SUPPOSED to indicate your likelihood of paying back debt on time, which lenders obviously want you to do (otherwise they don’t get back the money they lent you or they have a right hassle trying to get it back.)

It works on the basis (rightly or wrongly) that what has happened in your past is likely to happen in the future – so if you have shown a proven track record of responsible borrowing, lenders will feel you’re a safe pair of hands and are more likely to approve you for credit.

The higher your credit score, the more likely you are to get approved – whether that’s a mortgage, a credit card or a personal loan. Moreover, you’re also likely to get favourable terms for that credit as you’ll have a greater choice of products (which often means lower interest rates on your repayments, making the whole deal far cheaper in the long-term.) The lower the number, the more borrowers will think twice about accepting you for credit.

Unfortunately, it can be damaging to make 'hard' applications for credit only to get rejected. These rejections show up on your credit file and make it even harder to get approved. It’s vital, therefore, that you persuade lenders to do a ‘’soft’’ credit search on your behalf wherever possible as the results will not be passed onto other lenders when they search you.

Each lender will put together its own credit score for you behind closed doors. Each lender will score you differently based broadly on three criteria; past dealings with you (if any), application information AND your credit file. This might all seem very secretive and furtive, but the good news is that you CAN see your credit file by registering with a credit reference service like Experian, Equifax and Noddle.

 

 

Just be aware...

We are not regulated to give personal financial advice - This isn’t full-fat regulated financial advice. Boring Money is a publisher and not regulated by the FCA. 

This means we can't help with specific personal circumstances or recommend specific investment products. It also basically means that if we say something daft, you have no recourse to come back and complain.

We’re only allowed to give you a steer or share an opinion or tell you the facts - That said, we promise that our answer to you is an independent unbiased perspective with no commercial gain to make. If you need regulated financial advice, you can find a good adviser via sites such as Unbiased & Vouchedfor.

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