The credit crunch is affecting everybody right now, it’s a global phenomenon and it looks set to get worse before it gets better. Matthew Wright discussed the best ways to keep hold of your cash with The Wright Stuff’s financial expert Lawrence Gold.
Yesterday the proposed $700 billion bail-out of American financial institutions failed, and at the time of writing no settlement had been agreed. Lawrence and Matthew discussed how this would affect English financial institutions, and most importantly, how Wright Stuff viewers can keep hold of their cash in these turbulent times.
First on The Wright Stuff hotline was Jane from Birmingham. She had a cash ISA at Halifax, but wondered whether in the present climate it would be wise to pay off her mortgage with the money in the ISA. Lawrence Gold suggested that it is entirely up to her, but that it is a good idea to keep a little bit of a mortgage because the mortgage company will keep the deeds for free, it will help your credit rating to make regular payments to something like a mortgage and it will help you get a mortgage if you need another one.
Second caller was Susan from Newcastle with £200,000 in a building society bond. She wanted to know whether she should take the money out. Lawrence suggested that Susan and her partner would only be covered for £70,000 (£35,000 each) so she should think about moving some of the money to different institutions to minimise the risk.
Lawrence Gold thought that overall, savings were safe even over £35,000 covered by the Financial Services COmpensation Scheme. He felt that the government would step in and intervene if the bank was at risk of going under, as was the case with Northern Rock.
Is my building society money safe? was the question from next caller Ken in Birmingham. Lawrence’s gut feeling was that yes it was safe, for the same reason as mentioned above – the government would step in to save your savings if the building society was at risk of going down.
Where are the safest places to put money?
Lawrence Gold suggested that National Savings were always a pretty safe bet, being government owned. Also Northern Rock for the same reason. Also, spreading your money around means that you benefit from the Financial Services Compensation Scheme payout of £35,000 per institution, but be careful as this only applies once per institution, not once per bank or building society.
If you’re struggling financially in the credit crunch, you are certainly not alone. One thing you may want to think about to ease the financial strain is to save money by switching to the cheapest gas and electricity supplier. Using Save On Your Bills could save you up to £360 on your bills each year. It’s free, so you might as well try it out.
Click here to visit SaveOnYourBills.co.uk
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