Savings and Accounts

It might sound a little calculating, not to mention downright paradoxical. But if you want to save on your tax bill, consider giving money away. As they say, giving is a form of receiving. Nowhere is this more true than in the UK tax system.

"Making charitable donations through the gift aid system is very tax efficient for both the charity and individuals who are higher rate tax payers," says Jason Butler of Bloomsbury Financial Planning.

Claims that the over 50s are failing to grasp the new ISA rules are missing the point.

Many do understand the new rules but either have not got the money to spare or are totally unimpressed with the rates offered on cash ISAs.

Given the number of comments in response to Daily Finance story 'Over 50s fail to grasp new ISA rules' (link below) it would seem many older savers are just not inspired with interest rates so low to invest in cash ISAs.

However Matt Hunter, head of money at Confused.com, urges everyone to consider the bigger picture.

Sales of 'enhanced' annuities rose by an astonishing 24% last year. But what on earth is an 'enhanced' annuity, I hear you ask. Want to know the bad news? The only people who qualify for 'enhanced' annuities are those who can prove they are one step closer to the Grim Reaper than the average pensioner.

We're talking smokers, the overweight and those with 'serious medical conditions', here. People one step closer to the executing that funeral plan than the typical pensioner. As euphemisms go, the phrase 'enhanced' annuity should take the biscuit. It makes it sound like you're getting a great deal. What you're actually getting is closer to death.

Just over four weeks to go until the new ISA year. This is traditionally a time when you can find attractive rates on these tax-free investment vehicles. Firms dangle these rates in an attempt to woo last-minute savers in this tax year.

A moneynet.co.uk ranking reveals that Santander offers the best rates for instant access ISA products, (3.5%). Barclays has crept into second place (at 3.1%). "The ISA market is really taking shape as we approach the annual hot bed of activity as providers look to lure savers yet to make their move in the current tax year," said Andrew Hagger of Moneynet.co.uk.

The Financial Services Authority prides itself on talking about transparent investment products and 'treating customers fairly'.

This is all very noble stuff but then there is also this obsession with offering the public more investment options as if in some way more choice means a better deal.

History tends to show that this 'greater choice' is invariably via products that are intrinsically complex in structure.

So on the one hand you have a call for simplicity and on the other you have the sanctioned roll out of products that could potentially be the next mis-selling scandal.

Icelanders have overwhelmingly voted against paying off their British and Dutch debts. More than 90% of those who voted claim they will not enter debt slavery, paying back more than £3.4bn, for the wrongs of a selfish minority of well-connected bankers and ineffective regulatory oversight.

Icelanders do want to take responsibility for their debts, many say. They just want a fairer deal. So, the British and Dutch government will have to wait a bit longer for their I.O.U chits to be paid off.

Iceland's referendum about its repayment terms to Britain and the Netherlands will go ahead shortly. A "Nei" vote is widely predicted.

Icelanders have plenty of good resasons to say 'Nei"– as well as plenty of good reasons to accept the crushing weight of its £3bn debts: the possibility of EU membership and international financial aid from the IMF.

There's been plenty of talk about a rise in interest rates. But it hasn't happened so far and if most economists are right, it still won't happen for some time yet.

And that means there are plenty of savers out there who have been waiting patiently (or not) for their savings situation to improve.

The Bank of England has just announced it will keep the Base Rate at 0.5% in March.

This marks the 12th month in a row that interest rates have been on hold at their record low, following the reduction of the Base Rate from 1% to 0.5% in March 2009.

The Bank also voted to maintain the size of the Asset Purchase Programme at £200 bn.

If you are a regular reader of this column, you'll be getting constantly updated with the best ideas of how to make your money work harder for you. That's vital if you don't have money to waste and want to make sure you have a financially comfortable life - both now and in retirement.

But what if you don't have a mortgage, savings or any investments? What if simply surviving on your salary feels like an almost impossible task?

Interest rates have been stuck at 0.5% for almost a year now, and though many mortgage holders may be celebrating, savers and investors are not, especially those with pitifully low cash ISA deals. When cash ISAs were first launched in 1999, the average rate was 5.71%, now, it is just 2.12%, and if you want instant access to your cash, the average rate is a miserable 0.76%.

So what are the options?

Everyone has enjoyed having a pop at the Greek Government's spending habits but figures released earlier this week suggest the UK is actually running up debt even faster.

The Government was reported to have borrowed a whopping £4.3 billion last month - just under £100,000 every minute - making January the worst month ever recorded, in terms of debt, for the UK.

It seems the world is not yet ready to welcome back the split cap investment trust. This is the type of fund that gained notoriety for leaving thousands out of pocket in the early 2000s. Invesco Perpetual has withdrawn the planned launch of a new split cap fund, according to today's Financial Times.

The fund was originally due to launch last December, in response to investors seeking products taxed as capital gains, rather than income. The top rate of income tax is due to rise to 50% from next month, whereas capital gains remains at only 18%.

Lord Ashcroft has finally come clean and admitted he is a "non-dom". He's also promised that he will become a full UK resident – if the Tories win the next election.

"Non-doms" normally pay tax on their UK earnings, but not on income from overseas earnings. David Cameron has said all UK peers should be UK resident, and that he would ban non-doms from the Lords.