New top 1.5% cash ISA, URGENT pension claims warning, free £25 at M&S for spending a penny, extra 20% off eBay outlets. These are our Money Saving Expert Martin Lewis’ Tips of the Week.
Remember, deals can change quickly, even while I’m on the programme. So always double-check the terms and conditions before spending. Plus, while I hope these deals will save you cash, don’t spend if you can’t afford it, don’t need it, or won’t use it.
Cash ISAs are paying 1.5% again… grab ‘em
Until April 2016, my constant refrain was "your money is nisa in a cash ISA" - as a cash ISA is just a savings account you can (now) put £20,000 a year in, and the interest is tax-free. But then the personal savings allowance (PSA) launched, which means basic 20% rate tax payers can earn £1,000 in interest a year without paying tax on it (equivalent to interest on £67,000 in the top easy access rate) and higher 40% rate tax payers can earn £500/year tax-free (roughly £33,500 saved). So 95% of people no longer pay tax on savings interest anyway, and as the top cash ISAs started paying significantly less than the equivalent normal savings, that meant most people shouldn't bother with them.
But now, Coventry BS has launched a new cash ISA paying 1.5%, just pippingSkipton BS at 1.48%. As they’re easy access, you can withdraw when you want, and they’re flexible, so if you do withdraw, you can return the money in the same tax year with no impact on your £20,000 ISA allowance.
This means we’re in the rare position that the top easy-access cash ISA rate matches the top equivalent normal savings from Marcus Bank, also paying 1.5%. So even if you don't pay savings interest tax now, in case something changes in future, you may as well grab it if you want easy access, as the rate is the same as an equivalent non-ISA. Yet don't with fixed cash ISAs, as their rates are still lower, so unless you pay tax you’re better off with normal savings.
Yet unless you pay tax on savings, don't stick with Coventry BS if the rate drops. Like all easy-access accounts, it's variable rate, so the rate may drop in future. If it does or normal savings get significantly better, you can just take your money and move it elsewhere.
If you’re a potential first-time buyer though it’s far better to get either a Lifetime ISA or Help to Buy ISA as you get a 25% boost to your savings. There are free guides online to help you decide which is best for you.
Warning: 1.3m pensions missing out on pension credit, some need to go urgently or lose £7,000/year
Pension credit is a means-tested benefit aimed at supporting retired people on low incomes and can be worth thousands of pounds a year – yet a staggering 1.3m don’t claim it. To qualify, you must live in England, Scotland or Wales, and have reached state pension age.
The benefit offers a weekly top-up to your income, if it is less than £167.25 as a single pensioner or joint weekly income is less than £255.25 as a couple. Or for some if you earn more than £144.38 a week if you’re single, or £229.67 as a couple, and have some retirement savings your income may be topped up too (so that you still get some gain from the fact you’ve saved). If you think you’re owed just call the pension credit claim line on 0800 99 1234.
Yet right now there is an urgent deadline for some couples (married, civil partners, or living together as a couple), where one partner is over the state pension age and the other isn’t eg a 62-year-old and a 69-year-old in a couple.
In fact, the deadline was this Wednesday 15 May, but you can still backdate a claim for three months, so in practice there’s time.
The issue is that if you do it now you get pension credit, if you do it and don’t make the deadline you get universal credit – and in every case that pays less, in fact some may lose out on up to £7,000/year. The quickest way to claim is to call the Pension Service on 0800 99 1234 and it will fill in the application form for you and remember you want to try to claim for pension credit under the backdating not universal credit.
FREE £25 at M&S if you spend a penny. If you haven’t had an M&S Bank credit card in the last year, you can get one, use it to buy anything (even for just a penny) and you’ll bag a free £25 to spend at M&S. It’s important you only apply if you’re debt-free, have a good credit history and are a disciplined spender.
Here’s how it works:
- You get 2,000 points (worth £20 at M&S) if you buy anything within 90 days in any store, not just M&S.
- You’re sent a voucher with the card that you can swipe at the till (or use online) at M&S when spending on the credit card there on virtually anything, to get 500 extra points (worth £5 at M&S).
Of course, you may not find something for a penny, but buy the cheapest item you can find, such as an M&S banana, and hey presto, you’ve 2,500 points worth £25 at M&S. These will be spendable once you receive them in your first quarterly mailing. After that, make sure you clear what you owe IN FULL, and then you can just cancel the card or keep hold of it if you’re a regular M&S shopper as it gives decent rewards points for that.
Extra 20% off eBay outlets. Go online to eBay outlets and you can get 20% extra off already-reduced items at 88 eBay outlets, when you spend £25+ and enter the code POP20 until 11.59pm tonight (Thursday 16 May). These little-known outlets are official, including brands such as Evans Cycles, Joules, KitchenAid, JD Williams, and Mountain Warehouse. The code works on absolutely everything in the outlets – but as is the nature of outlets, there’s not always a complete product range and stock can be limited, plus some goods can even be made just for outlets. But as an example, you could get a Kenwood kitchen mixer for £103.20 (£129 before the code, normally £144). The next cheapest is £140 at Amazon.
The maximum discount you can get is £75, so purchases of more than £375 will not receive the full 20% discount, and you can only use the code once per account (you'll need to be signed in to your eBay account, and pay via PayPal or credit/debit card).