Fergus Muirhead answers your consumer questions
I'm Fergus Muirhead and I'm here to answer any questions you may have about any money or consumer issues.
Please drop me a line here at email@example.com with your questions.
You can also read more on money and consumer issues on my own blog.
Q. I am currently trying to claim back money on a Payment Protection Insurance policy from several banks and I wonder if you can tell me how to go about this without using a third party. If I do it myself will it take longer and will I end up getting less back? AJC
The first thing you need to do is to write to the company that sold you the policy, explaining why you think you should not have been sold the policy in the first place. If the company rejects your claim then you need to approach the Financial Ombudsman, and if you have a look at this page on PPIs on their website, you should find the information useful, and it will tell you what to do next. The amount you claim should not be affected just because you are doing it yourself and you will certainly save yourself money.
Q. Can you tell me if a parent who assists a son or daughter in finding the deposit for a house from their savings will face tax if money lent is more than the yearly amount? I ask this in case of death within a few years. Douglas, by email
You can give as much money as you like to whoever you like and do it whenever you like but as you rightly say there are potential tax liabilities in certain circumstances. The one you allude to, I think, is that if you die within seven years from the date that the money is gifted then there may be a liability to Inheritance Tax on your estate, depending on the total value of your estate at the time of death. The current limit is £325,000 but this could effectively be doubled if your spouse has her allowance to use as well. It may be that you could make a loan to your son or daughter repayable when they were able and then a different set of rules might apply but if you want to consider this type of action then it would make sense to talk to a solicitor. If your estate is likely to be below the inheritance tax limits then you should have no issues in helping your children out, as long as you are not leaving yourself short along the way!
Q. I have a pension with value of £13,079 with Aviva. I really need the money now and I don't want to 'look forward' to £80 per month when I am 65! I need that money to keep a roof over our heads, is there anyway I can release my pension. John Womack
Unfortunately you don't tell me how old you are so it's difficult to be absolutely specific here but there are rules that may apply in your case that might allow you to access all of your pension as a lump sum. These rules, known as 'trivial commutation' apply to pension funds of up to £18,000 and allow you to access these funds after your 60th birthday and before your 75th. Up to 25% of the fund can be paid to you as tax-free cash and the balance would be taxed as earned income. You mention one pension in your email but you would have to be able to confirm that this was the only pension to which you were entitled at retirement if the trivial commutation rules are to be any use to you. As a starting point you should speak to your pension provider and ask them to provide you with details of your options under the trivial commutation rules. When it comes to assessing any tax liabilities you may be able to get any help you need from Citizen's Advice as well.
Q. I save £100 per month in a Children's Regular Saver Account for my ten year old granddaughter. After twelve months it is automatically transferred to her Save4it Account, which has a current balance of £2500. As this money will not be given to her until she is eighteen, is there anything better available to get maximum return on investment for her? Connie Smith
As always with this type of question there is no right or wrong answer. You are correct to be concerned about the low rates of growth offered by savings accounts at the moment and there are other options that you could consider. The down-side is that if you look to another type of investment, the stock market for example, that offers a potentially higher rate of return, then the likelihood is that it will come with a higher rate of risk attached to it. The fact that you are not likely to be using the money for at least eight years would suggest that you should be able to take slightly more risk with it than simply leaving it on deposit but that is one for you to answer. The other issue you need to address is that of finding the most efficient type of account to use. It may be that the new Junior ISAs would be appropriate for your granddaughter rather than an account in your own name. These accounts are tax-free within limits and allow the opportunity to invest in a wide range of assets as already described, or simply to keep the money on deposit.