Money
Our experts
Q&A: Storm damage claims, cheques, stakeholder pensions
In the latest of his regular Q&As, Saga money expert John Husband answers your personal finance questions
Q: I had to make a claim on my car after it was damaged during the winter storms. As it was not my fault will this affect my no claims discount?
A: I'm afraid so. It is after all a "no claims" discount, not a "no blame" discount. You benefit from the saving the company is making by not having to fork out on your behalf. This is most unfortunate for the careful driver who has masonry or a tree fall on his car. Or whose car is damaged by a hit-and-run driver while it is parked on the roadside or in a car park. The best answer is to pay a bit extra for a "protected" bonus once you have clocked up the maximum no claims discount.
Q: Can you explain why banks take up to a week to clear a cheque? In this electronic age isn't this ridiculous or is it just extortion?
A: Many transactions nowadays are almost instantaneous. Unfortunately cheque payments are not because the cheque hasn't "cleared" until it has been physically returned to the branch where the customer who wrote the cheque has the account. The branch then "clears" it by checking that it is genuine and that the customer has the necessary funds to cover it. Otherwise it is rejected (or bounced). Hence the long delay. However, some banks now allow you to draw cash immediately against a cheque you deposit on the understanding that the money could be taken back if the cheque bounces.
Q: I am in debt but I see there are advice firms offering to clear up to 95% of what you owe with an IVA. What is it and is it a good idea?
A: An IVA is an Individual Voluntary Arrangement between you and your creditors where you come to an agreement over what you can afford to repay out of your assets and income. A large part of your debt may be written off in return for creditors getting more of their money immediately. It falls just short of a bankruptcy and does not have quite the same stigma. But you may have difficulty obtaining fresh credit for many years, and you're more likely to have about half your debt written off, not 95%.
Q: Years after my husband died I met a very kind and considerate man and now we live together in a home we own jointly. He has proposed to me several times but I have so far declined because I loved my late husband dearly. It has been suggested that if we don't marry the survivor would face an inheritance tax bill when one of us dies. Is that correct?
A: If your estate were potentially liable to inheritance tax, being married would avoid that as transfers between spouses are exempt. However if you don't want to get married and there is a potential inheritance tax problem I suggest to talk to an independent financial adviser about alternative solutions.
Q: I have taken early retirement but it has been suggested to me that I could place part of my savings or income into a stakeholder pension. Is that possible now I am no longer working and does it make any sense?
A: Anyone up to the age of 75, whether working or not, can contribute up to £3,600 a year gross, which is £2,808 net of basic tax. For those paying higher rate tax (40p in the pound), the tax relief means that you need to contribute just £2,160 to invest £3,600. You can withdraw up to a quarter of your fund as a tax-free lump sum.
Q: We need to move house because my job has been relocated. Our current mortgage has a £2,000 penalty if we repay the loan. Is there any way we can avoid that?
A: Ask your lender whether the loan can be transferred to the new home you wish to buy. Many mortgages nowadays have a "portability" option which makes this possible. Lenders offer these because they want to keep their customers.
* John Husband's answers represent his own opinions and are for general information only. Always seek independent financial advice. Email John your personal finance questions at web.editor@saga.co.uk
