e-mail Paul Lewis on paul@paullewis.co.uk
A bit extra - every 83 years.
Roll up, rollup! Ladeez and Genulmeeeeen. Will you be a winner in the great Halifax prize draw!! Every month 3 lucky savers will win £100,000! Another 100 will win £1000 and 1000 will win £100. It costs nothing to enter! And the prize is tax-free!
Like any fairground offer, the new Halifax deal needs careful thought. To enter you need to have a total of £5000 or more in Halifax or Bank of Scotland adult savings accounts - ISAs and fixed term accounts are included. Halifax will not say how many people that is but does say the average balance in its savings accounts is around £5900. So probably rather more than half of its savings customers will be eligible to register to enter the draw. But without knowing how many will do that it is impossible to work out the odds of winning.
Even if only a million register, and it will probably be a lot more, then you would expect to win a small prize once every 83 years, a £1000 prize every 833 years and the big £100,000 prize will turn up for any individual once every 27,700 years.
So you would do better to look for the best rate of interest than put your money in Halifax hoping to win a prize. Even the £100 prize that would only give you at most the equivalent of an extra 2% tax-free interest. But if you are committed to Halifax - or locked in to a fixed term account - and you have a total of £5000 in it then it is worth registering. But if you live in Northern Ireland forget it. For legal reasons your account is excluded. Register www.Halifax.co.uk/saversprizedraw or call 0844 571 5076.
MoD should cough up
Were you in the navy? Do you have a cough? If you can answer yes to both you may be entitled to a war disablement pension. Saga reader Chris White recalls "we slept in hammocks with our noses near the pipes" and he now knows that those pipes were lagged with asbestos. Luckily Chris does not have a fatal disease. But the asbestos has given him a debilitating illness called bronchiectasis. The severe coughing fits are debilitating "once it gets going you can't go into public places" and it often stops him taking his grandchildren for walks or going to restaurants or the cinema.
Chris joined the navy in 1952 aged 15 and served for 12 years. But it was only in June 2009 that he started with what he calls 'a slight cough'. No standard treatment cured it but after a lot of pestering he got a chest x-Ray which revealed his condition. Chris's persistence - and appealing when he was refused - resulted in two payments totalling £9000 and, if his condition worsens, he could get a weekly pension.
So if you served in the Navy or the armed forces and have a health condition that is irksome and could turn dangerous, contact your GP, mention asbestos, then call Veterans UK 0800 169 2277. If you get stuck Chris will help chris@handmadebooks.co.uk
Junior ISAs
Children who are too old or too young to be entitled to a Child Trust Fund will have a tax-free way to save from this month. The Child Trust Fund was launched for any child born on 1 September 2002 or later. But it was cut as part of the spending review last year and it ended for children born on 3 January 2011 or later. Now both groups - born before 1 September 2002 or after 2 January 2011 - will be able to open a Junior ISA. There will be no payment from the Government, but up to £3600 a year can be put into the JISA by parents, grandparents, relatives, friends or indeed anyone.
JISAs will come it two sorts cash and investments. Unlike adult ISAs money can be moved from one to the other subject only to the overall limit of £3600 going into the JISA in the tax year.
The main tax advantage of JISAs is that parents can put money into the it without worrying about the normal rule which taxes any interest earned above £100 a year as if it was the parent's own. That rule does not apply to money earned in a JISA.
Children with a Child Trust Fund cannot have a JISA. But from this tax year the money that can be put into a CTF will rise from the old limit of £1200 to £3600 in the tax year.
PayPal - your payment friend?
Do you sell things on eBay? Millions do and almost all transactions go through a company called PayPal, which eBay owns. PayPal is not a bank even though you have an 'account' and money goes in and out of it. It is a payment system linked to a credit card or current account. So to you can pay for items you buy or receive money from things you sell. Any positive balance can be transferred to your bank account. It sounds simple and when it works it is. But there can be problems. First, if the buyer disputes the sale - perhaps claims the item was not as described - then PayPal will freeze the money until the dispute is settled. As the buyer has 45 days to complain, the money is not definitely yours until that time has passed.
Second, the buyer's payment can be recalled by their bank or credit card if fraud is suspected or, for example, the buyer has exceeded a credit or overdraft limit. A credit card provider can do that up to six months after the transaction but a bank can do it at any time. If that happens PayPal will take the money back even if it leaves you with a negative balance. To protect against that, PayPal has a guarantee that it will bear the loss but only if you post the item to the buyer using a trackable system. That can be as simple as Royal Mail recorded delivery which costs just 77p. But the guarantee does not apply if the buyer collects the item which often happens with large items like furniture. And if fraud is committed you will have lost the item and your money.
Pay more, get less
When it comes to investment new research suggests you get the opposite of what you pay for. The funds that charge you the highest fees provide the worst performance. In other words, you pay more but get less. The research was done by TCF Investment which itself provides low cost funds. So it is no surprise that it was pleased with the findings of the research it had commissioned. But the research on data from financial analysts Morningstar was solid. It divided cautious funds into four groups from the most expensive to the least and compared the returns on the most expensive with the least expensive quarter. The cheapest quarter produced an annual return of 2.90% but the most expensive quarter produced a lower return of 2.74%. The same pattern was found among active and balanced funds too. The quarter of funds with the highest charges produced lower returns than the the quarter of funds with the lowest charges.
The rule also applies to much simpler investment called 'trackers' which just invest so the fund follows the ups and downs of a popular index like the FTSE100 which is widely quoted in the news. Separate research by the consumer organisation Which? found that the most expensive trackers which charge 1% or even 1.5% a year failed to match the index by a large margin, in other words your money fell more and and rose less than the index it was supposed to follow. But the cheapest funds, which charged between 0.1% and 0.25%, followed the index much more closely. So if you want an investment fund, picking the one with the lowest charges should bring the best returns.
e-mail Paul Lewis on paul@paullewis.co.uk