The Money Thread...

[shadow202]

There are instances of things going wrong though shadow...

Of course but it's a lot less likely now that 6-12 months ago. Plus if anything does go wrong the bank you're transferring too will accept full responsibility for it, so you'd never be at a loss

[Poser]

Glowy (or anyone), need a bit of advice...

Keeping this as brief as I can, as per the Buying a House thread, our impending move is working out more expensive than I had realised. Just blew £5k on essential(ish) extras, and still need to buy carpets/pay fees (in November/December).

Long story short, my mortgage application is going to be approved this week, and we are due to complete in December. I want to get a new credit card with a '0% purchases' offer to buy £1,800-worth of carpets.

Will applying for that after my mortgage offer comes in affect my mortgage offer, between now and when we complete? Or is it more likely that, if there's an issue, I'd just be refused the credit card?


My concern is that appearing to apply for additional credit just after my mortgage application will look shady, to say the least. I do have an alternative - borrowing the cash from my mum, also at 0%, so it's not like I'm actually desperate.

[Glowy69]

No mate.

When people search your credit file, if one is for a mortgage and the other us for a CC, it won't affect anything, we often do mortgages at work and then switch peoples banking at the same time.

Long story short, if they see you constantly applying for the same type of credit, there's a good chance you'll get declined.

As you have haven't don't worry. There's a pre eligibility checker on money saving expert too if you're concerned. It does a soft check before you apply giving you your chances of acceptance.

[Poser]

Wicked, cheers.

I'll have a browse on MSE and see what the best deals are. Thanks for your help.

[BTB]

How long does it take for the banks accounts to switch generally?

I'm thinking of switching from NatWest to First Direct soon, but just wondered how long i'd be unable to use internet banking/debit card etc.

[Tomous]

How long does it take for the banks accounts to switch generally?

I'm thinking of switching from NatWest to First Direct soon, but just wondered how long i'd be unable to use internet banking/debit card etc.

Why don't you just wait until you're fully up and running with the new account before you close the old account?

[BTB]

I think the switching process makes it easier with direct debits etc

Actually, will i need to tell work that I'm switching? Or is that all sorted in the process?

But I've just checked my young persons rail card (which i get from my NatWest account) and it expires next month, so I might leave it until I get next years one. Then switch. Although at the moment I rarely use it as i get monthly train tickets

[Glowy69]

Switching takes 7 days.
All debit and payments are moved.
All incoming payments (ie wages) are redirected for 13 months.
All money is scooped and moved to your new account.
And the account is closed.

[Captain Kinopio]

starting up an investment deally with nutmeg as they've been recommended by a friend. I have a real opportunity to save over the next year or so but have been pretty lax so far.

Forget about Nutmeg. They charge too much:

http://www.dailymail.co.uk/money/diyinvesting/article-2712172/How-compare-Isa-Sipp-charges-protect-pounds-platform.html


The data shows that in the long run the low cost index tracker wins out over an expensive active managed fund (which more often than not underperform the index trackers). The focus with investing should be to find low cost index tracker funds and purchase them through a low cost platform. Compound returns is great, but compounded costs are to be minimised.

The comparison table on Monevator is handy too: http://monevator.com/compare-uk-cheapest-online-brokers/

I don't really understand what you're saying

[Neph]

Why is it bad to have dormant credit cards if they're clear? I've got a couple that are just sat unused because they've previously been 0% on purchase cards and the introductory period has ended. Not a big deal, I'll probably just go ahead and cancel them now when I get around to it but why does it have a negative effect?

Say I have 4 credit cards and 3 of them have limits of £2000 which I don't use. That's a possible 6k I could go out and blow tomorrow and possibly struggle to repay. They look at stuff like that.

What Minto says.

The credit is there...so there's a chance you might blast it all, plus y'know fraud and stuff.

Get them closed.

Whats the difference if you have 3 cards that totals 6K or 1 card that totals 6k?

Not that it really matters only ever had one CC and Natwest seem to write to me every so often saying they are increasing it.

Anyway real reason i wanted to know how many of you guys are paying into a /multiple pensions and what % of your salary.

My dad always said you should be putting in a minimum of 15% of your salary not sure if that's the norm?
I currently put 10% in.

[Glowy69]

If you have 3 cards open and empty..or just one being used, there's a fraud risk firstly. Second when searching your report you may not be using them but having say 6k available,to use could mean that if they were to give your CC you could easily max the others out, making you a high risk to lend too.

[Glowy69]

I put nothing into a pension, I need all my money for a house deposit then I'll pay into a pension.

[JiggerJay]

Hit £8,500 the other day, mainly due to savings and an inheritence from my granddad, I expect most of that will be gone in the next few months with the move.

I pay 8% into my pension and Royal Mail pay 9%, not too shabby, in a few years it's already over £7k

[Grumpy David]

3 credit cards with spending limits combined of 6k vs 1 credit card with a 6k limit in itself shouldn't have any impact on the credit score.

However mortgage credit searches all have different score cards for different lenders and they're top secret. Some things are obviously desirable to all lenders e.g. Registered to vote at the address you currently live at etc but when it comes to the debt situation, different lenders give it different significance - some want a large history of being trusted with credit and using it reliably whilst others are happy enough with no significant credit history as long as the rest of credit tick boxes get enough ticks to pass.

I would guess 3 cards trumps 1 because it shows more lenders have trusted you with credit in the past, credit history will be 3x larger in the same space of time and you'll have a better chance of getting approved for a mortgage if the lender is the same as one you've borrowed from in the past without issues.

I only contribute to a pension since auto enrolment, 0.8% over the qualifying amount is a small deduction and no where near enough for retirement but turning down employer matched contributions makes no sense, you're typically doubling your return before it's even invested.

Usual wisdom is half the age at which you first start paying into a pension and put this number as a percentage in for the rest of your work career. 24 year old needs to contribute 12% for the rest of their working career.

starting up an investment deally with nutmeg as they've been recommended by a friend. I have a real opportunity to save over the next year or so but have been pretty lax so far.

Forget about Nutmeg. They charge too much:

I don't really understand what you're saying

When you pay for stock and shares you pay both the investment company (e.g. Vanguard - I have a lifestrategy 80:20 fund that costs me 0.24% a year) and the platform/website you buy it through (in my case, Charles Stanley Direct who charge 0.25% a year). Keeping these two figures as low as possible ensures you keep more of your money. Nutmeg is 1% a year. Double the cost for what appears to be a not too different product to Vanguard's lifestrategy products. With small amounts and over a short period of time, the difference isn't much but over time, the difference in cost compounds and the gap opens up.

Don't think of them as small percentages either, if you have a 5% return from the stock market (so your £1000 became £1050), you'd pay 0.5% or 1% so £5.25 or £10.50, that's actually a 10 or 20% deduction.

Read this: http://monevator.com/passive-investing-uk-evidence/

Tl;Dr: Nutmeg seems to just be very expensive compared with alternative options like the Vanguard Lifestrategy options.

[Oblomov Boblomov]

Who can afford to spend 15% of their salary on their pension?! I pay 3.5% (although my employer does add another 7%) and it still grates somewhat.

[Grumpy David]

You include the employer contribution in that percentage.

So if you're in the public sector, your percentage combined with employer percentage will be closer to 20% but the employee puts in no where close to it, usually 5-7%. Employer contributions should be cut substantially though.

In the private sector most employers contribute much less, a generous pension would match what you put in up to 5-10%.

[Lotus]

Anyone here have a tracker NISA? Looking at setting one up, but not sure which one to go for...

[Grumpy David]

What index do you want to track? UK stock market, USA, European markets, emerging markets?

I wanted to track all to spread the risk in case one market isn't doing well and I couldn't be strawberry floated setting up several different funds, so went for the Vanguard lifestrategy range.

[Lotus]

I'd thought about a FTSE All Share, but hadn't really considered alternatives. TBH I thought you could only do one that tracked the UK stock market, albeit either top 100 or all of it. What kind of charges do you pay on yours?

[Grumpy David]

0.24% a year is what I pay to Vanguard for their lifestrategy fund. It tracks UK, USA, European, Asian markets as well as having some bonds to reduce volatility.

Then who you choose to buy it through will also charge a fee, either a fixed fee or a percentage fee. Percentage fees are best when funds are smaller but fixed fees are the reverse (the image on the previous page shows the cost of the platform you buy through). I bought it via Charles Stanley Direct costing 0.25% a year.

So 0.49% a year in costs. No other costs paid.

http://www.thecalculatorsite.com/finance/calculators/compoundinterestcalculator.php
Test the impact if the interest is 5% or 4.5% or 4% and you can see the extra cash you pocket by keeping costs down.

You can do it slightly cheaper by buying individual indexes and doing a DIY version of it but it's more faff too.