Martin Lewis appeared on GMTV this morning to talk about money saving tips, ISA and mortgage deals. Martin suggested that paying off part of your mortage was dependent on a maths calculation: If the after tax interest on your savings is lower than your mortgage rate, you should pay your mortgage rate off. If you can earn more from your savings after tax than your mortgage is costing, then continue to save. It all depends on the type of mortgage you have – if you have a cheap tracker mortgage at the moment you’ll be far better off saving in a decent savings account than paying off your mortgage. Also watch out for penalties for paying off your mortgage early, and have an emergency cash fund set aside.
One viewer asked whether he should switch his ISA from one account to another to improve the interest. Martin said you should do this, but – make sure you do not take the cash out of the account and open a new one yourself. If you do this it’s no longer classed as a cash ISA and you will lose your tax-free allowance. Instead, you need to set up an ISA account with a new bank, then ask them to transfer the balance from your old ISA into the new one. This way, the money is still classed as an ISA and is therefore still tax-free.
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October 9th, 2009 at 5:45 pm
martin i am just contacting you for advise on endownment policies i have just had my redemption through which is £2000 less than any red alert i have received in the last 12mths what is the point of red alerts f they do not resemble the amount they pay out have i got any redress to them