If you’ve noticed a heap of articles and adverts about individual savings accounts (ISAs) lately, you’re not alone. It’s the start of the so-called ISA season, when the financial services industry blows its marketing budget trying to persuade us to use our tax-efficient savings allowance, and buy their products. Every UK adult has an ISA allowance, which allows them to save up to £10,680 in the current tax year and take all the returns free of income tax and capital gains tax.

Your annual ISA allowance is issued on a “use it or lose it” basis. If you don’t use your allowance by the annual 5 April deadline, you have lost it for good. That’s why there’s always a last-minute panic in the days and hours before the midnight deadline expires, as savers rush to snap up the tax benefits on offer. These benefits are well worth having. If you make good use of your ISA allowance, year after year, you could save many thousands of pounds in tax. That’s good news for you, bad news for the taxman.

You don’t need to invest the full £10,680 to benefit, you can start by saving much smaller amounts. ISAs aren’t actually an investment. They’re a tax “wrapper” that you can place around a range of savings accounts and investment funds sold by banks, building societies and fund managers, as well as individual company stocks. Your annual ISA allowance comes in two parts: the cash ISA and stocks and shares ISA. This tax year, you can invest up to £5,340 in a low-risk cash ISA. Cash ISAs work like a standard savings account, with a couple of differences. First, you don’t pay tax on the interest you earn. Second, if you withdraw cash from the account, you lose all the tax benefits on that money. That’s because cash ISAs are supposed to be a long-term savings vehicle.

If you take out a cash ISA, you can also save up to £5,340 in a stocks and shares ISA. If you’re brave, and plan to invest for 10 years or more, the stock market can generate a better return than cash. If you’re really brave, you can invest your full £10,680 allowance into stocks and shares. You can spread the risk by investing via “pooled” investment funds – there are thousands to choose from – or buy individual company stocks. Anybody who has followed the news over the last five years won’t need telling just how risky the stock market can be. But if you can hold on for the long-term, it should generate fatter returns. Consider taking independent financial advice, to guide your choice.

If you don’t have any spare cash to put into an ISA this tax year, don’t despair. You get a brand new annual ISA allowance from 6 April, and this one is worth £11,280. That’s because the annual allowance now rises in line with inflation. That means you can shield even more of your hard-earned savings from HM Revenue & Customs next year.

Joanna Cruddas writes:

There’s a theory that a pear is only perfect for 20 minutes and I can believe it. Hard one minute, soft and woolly the next. I reckon the same applies to camellias. For that exquisite time when they are in full flower, they radiate a serenity and purity like no other flower I can think of. Then it’s over and they drop to lie bruised and limp on the ground. I caught that perfect moment at the Chiswick House Camellia Festival, where the camellias have just started to flower in the elegant conservatory that dates back to 1813. Covered in bud and flowers, many of the camellias are believed to be from the original planting in 1828.

Buds of Camellia japonica ‘Woodsii’

Camellia japonica ‘Parksii’

Camellia japonica ‘Incarnata’

Camellia japonica ‘Elegans’

Chiswick House is full of treats. The conservatory looks over the formal Italian garden, which was being planted out by conscientious volunteers when I visited.

My particular interest is the restored walled garden, now a community kitchen garden. I peeped through these tempting gates to notice a novel way of storing watering cans and dream of a visit on another occasion.

It was time for a “little something” and, guess what, the café was offering camellia-themed cupcakes – an indulgence I highly recommend.

The Chiswick House Camellia Festival runs until 18th March 2012

Just over the river from Chiswick House, are the Royal Botanic Gardens of Kew. Their “Tropical Extravaganza” is just that. Here’s a taster:

Phalaenopsis ‘Las Palmas’

Orchidaceae ‘Paphiopedilum’

Kew Gardens’ Tropical Extravaganza runs until 4th March 2012

I cannot leave Kew without mentioning the Reader’s Digest Crocus Carpet.In the spring of 1987 to celebrate their 50th anniversary, Reader’s Digest planted 1.6 million crocuses. It remains an annual must-see.

I’d been invited to watch last year’s Boat Race at the home of one of our regular contributors, John Dyson. His house has a fabulous view overlooking the bend of the river at Barnes, and you get an unrivalled and sustained view of the boats coming towards you. While we were chatting, he mentioned that he knew of someone who was aiming to get into the Boat Race squad for 2012  and that, if he made it, he’d be the oldest person ever to have raced – by a full seven years! What’s even more impressive is that  he didn’t decide to start getting into training until he was 43 years old…and hadn’t rowed competitively for 19 years.  What could I say except  ”Wow!” Swiftly followed by: “You must write that story for us the moment you find out if he’s done it.”

And that’s exactly what’s happened. At the age of 44, James Ditzell made it into Oxford’s 20-strong rowing squad. Now 45, within the next couple of weeks James should know if he’s made it into one of the two teams (the premier “blue boat” and “reserves” team) that will race on the day – April 7. But whether he does or not, he’s already achieved something absolutely remarkable: a text-book case of someone who simply refuses to give up on their dream, and works his backside off to achieve it, even though it seems impossible.  Top man!

Read the full article in our March issue.

I remember the days when only a banana republic would print money to get out of a financial fix. Welcome to banana Britain, where the Bank of England has resorted to printing hundreds of billions of pounds in a desperate bid to get the economy moving again. Last week, it unleashed another £50 billion of quantitative easing, on top of the £275 billion it has already printed. This may only be virtual money, but it is doing some serious damage in the real world. Especially if you’re a pensioner.

It is debatable whether QE, as it is known, is saving the UK economy. Banks seem to be sitting on most of the money, rather than lending to businesses as intended. But there is no debate over who are the victims of QE. British pensioners. The Bank is using all that freshly-minted money to buy UK gilts. This phoney demand has forced up gilt prices, which reduces the amount of interest rate they pay – known as the yield. Gilt yields are used to set rates on annuities, the income for life you buy with your pension fund. Thanks to QE, annuity rates have fallen by 25% over the last four years. If you have £100,000 in your pension pot at 65, you would be lucky to buy an income worth £5,000 a year. That’s barely one-fifth of the average salary. If you want that annuity income to rise in line with prices, you probably wouldn’t even get £4,000 a year. And since the average pension pot is a meagre £25,000, most people will get a lot, lot less than that.

Once you have bought an annuity, you are stuck with it for good. Thanks to QE, more than a million pensioners will be permanently poorer for the rest of their lives. This isn’t the only way the Bank of England is punishing pensioners. By holding base rates at a record low of 0.5% for nearly three years, it has savaged the return on their savings. Letting inflation rise above 5% last year further eroded their spending power in real terms, especially since pensioners spend a greater part of their money on things like food and fuel, which increased most.

After a lifetime of diligent saving, pensioners are being forced to pay the price for the nation’s profligacy. And by the Bank of England, no less. Analysts have come up with several measures that would be more helpful and less damaging than QE. Some have even suggested printing money and dropping it from a helicopter, so that people actually spend it. It’s a measure of just how crazy QE is, that this apparently insane alternative is starting to appear quite rational.

Fascinating piece in latest (March 2012) issue about what really happened on the Titanic, written by TV producer Nigel Stafford-Clark, whose latest project, “Titanic” starts on ITV1 this month. One of his findings is that the people most likely to have died were not in the men in third-class, as was previously thought, but those in second-class, only 8% of whom survived—about half the rate of those in steerage and a quarter of those in first class. Why? Seems it was a mix of first-class sense of entitlement, nabbing the lifeboats for themselves, and those in steerage just  scrambling for any boat they could – while the second-class dutifully did what they were told and let women and children go first.

We’ve included a menu from a second-class dinner menu planned for  April 14 – which was never eaten, as the ship went down on the 12. Might have passed on the ‘tapioca’ or ’sharp sauce’, but glad to be reminded that curries have been part of our staple diet for so long: in among the Spring Lamb and Roast Turkey is Curried Chicken and Rice.

Rdmoney.co.uk
8 February 2012

Half of us are willing to commit fraud

The British have always prided themselves on being an honest bunch with low levels of political and financial corruption compared to most foreign lands. Sadly, that is rapidly changing. As we saw in the MPs’ expenses scandal, our politics isn’t as clean as we thought. Our elected representatives were out to grab every penny they could. The rot may have started at the top, but it smells increasingly musty at the bottom as well. Growing numbers of Britons are exaggerating their home insurance claims and don’t see anything wrong with it, according to new research from Axa.

The number of fraudulent claims leapt 17% in 2011. Around 200,000 customers added fraudulent extras to their claim, worth £607 on average. They can’t all have been MPs. It’s partly a male thing. Men are nearly twice as likely as women to have exaggerated a claim. And it’s also a London thing, because the capital generates most false claims, and the biggest. Insurance is seen as a soft target and more people are now willing to try their luck. The research showed that 12% of us would be more likely to consider making an exaggerated claim now three years ago.

Just as most MPs didn’t see anything wrong with fiddling their expenses (and many still don’t), less than half of us believe that exaggerating a claim is dishonest.
The survey asked people what type of behaviour they considered to be dishonest when making a claim. Nearly six out of 10 said it isn’t dishonest to say their windows or doors were shut at the time of a break-in, when in fact they had been left open. Incredibly, almost half see nothing wrong in submitting a receipt belonging to someone else, a blatant fiddle if ever I’ve seen one. And more than four out of 10 believe deliberately damaging an item to make a claim isn’t being dishonest either.

The definition of dishonesty has clearly changed since I was a boy, and for the worst. It looks like half of us have no qualms about committing fraud, providing the victim is an insurance company. Some people have always seen insurers as fair game. They feel they deserve something in return for their premiums. They know other people are trying it on as well. Many think insurance companies deserve everything they get. Most of all, they see it as a victimless crime. It isn’t, of course. We are all the victims, as exaggerated claims add up to £13 to every home insurance policy.

Insurance fraud isn’t risk-free either. If you’re caught, your entire claim could be turned down. You could also have trouble getting insurance in future.That clearly doesn’t deter people from trying it on, just as the danger of seeing their reputation publicly trashed didn’t stop MPs. Where our elected leaders go, we follow. Who said politicians don’t have much influence these days?

As if dying once wasn’t enough, these days we have to do it twice. The first is our paper death, which is pretty straightforward, as long as you write a Will. The second is our digital death, and that’s a more complicated matter.

Digital death is a new phenomenon. Most of us simply aren’t prepared for it, but we need to be. Yes, I know it’s a bit of a chore, this dying twice business. But if you don’t make the effort, you could get it all wrong, and leave a nasty legacy for your loved ones. Your body may die, but your online persona will live on after your death. It needs to be given a proper burial.

More of us have net-based bank and savings accounts, pensions and investment portfolios. We also store personal effects online, such as music, movies, photographs, blogs and social media accounts.
In the online world, you won’t leave a paper trail when you die. An electronic trail could be harder to pick up. Your relatives could overlook an online savings account or pension plan, a mistake that might cost them thousands of pounds. So make sure you give them all the relevant account details (even if you don’t want to give them your passwords). Otherwise your wealth could be buried with you.

Be careful, because you don’t want these details to fall into the wrong hands, otherwise an unscrupulous relative or friend could run off with your life savings. If you have uploaded photographs and videos to social media such as Facebook and YouTube, somebody you know and trust will need login details to access them. People are starting to include this sort of information in their wills. The danger is that a will is a public document, which anybody can view for £6 by applying to the Probate Registry. You won’t want your login passwords publicised this way.

Several years ago, I tackled this problem by printing out all the account numbers for my pensions, investments, insurance policies and so on, and handing them to a relative for safekeeping. The trouble is I have failed to update the information. I know that one or two accounts are closed or absent. I keep meaning to overhaul it, but haven’t got round to it yet.

Alternatively, a number of companies offer online digital “legacy lockers” which give your family access to your essential digital property if you die. They say that death is not the end, and it’s a motto that ID fraudsters certainly live by. They are happy to assume the identities of dead people, and use them to swindle cash out of the living. You should start preparing now for your digital death. It’s important to make a proper job of it. If you don’t, your mistake could return to haunt your family.

I was with a group of magazine editors (what’s the collective noun – a proof?) who met Nick Clegg last night down in Whitehall. These functions tend to be a bit of a bland meet-and-greet, where you clutch a glass of indifferent wine in one hand, try to grab a passing canape to help stave off the hunger pangs—and just when you’ve crammed that cube of tuna sprinkled with stick-in-your-teeth sesame seeds into your mouth…is the exact moment when the guest of honour is introduced. One determined swallow later, and I was able to ask Mr C – who turned out to be very engaging and friendly – whether he was a magazine reader or not (he’s not – but he’s always got a book on the go), and where he gets his info from (bbc and Guardian online sites). But there are clearly limits. He’s only allowed to use a specially vetted Blackberry – nothing else, it seems, is safe enough – so access to information is more limited than it was in his pre-Cabinet days. Climbing the greasy pole – it’s an efficient way to free yourself from gmail, Facebook et al, I suppose.

When it came to The Speech, he stuck to safe ground – how to improve social mobility, and especially in these tough economic times while the government puts the “economic jigaw” back together again. One can but hope.

What’s this? Is confidence returning to the housing market? Now that would be a big surprise, given all the desperate economic news around, but it does seem to be the case. One in three Britons expects house prices to rise this year, while nearly four million say they expect to buy a new home, according to new research from Santander. This follows figures from the Council of Mortgage Lenders showing that the number of people taking out new mortgages rose 4% in November.

Another survey suggests even first-time buyers are making a comeback. Nearly four out of 10 mortgage seekers are trying to get onto the property ladder for the first time, according to financial advice website Unbiased.co.uk. That’s a positive development, because first-time buyers are the lifeblood of the property market. Without a fresh injection of first-timers, the market will soon look anaemic. Given the importance of house prices to general confidence, this is one of the few pieces of good financial news to emerge about the UK recently. And a surprising one.

The resilience of the UK housing market since the start of the banking crisis has shocked most people. In the US, house prices have fallen by more than one-third, and are still falling. In Spain, they have fallen even further. But after a brief initial panic, the UK property market has stood firm. It’s quite incredible. If I had a pound for every article I read (and written) warning that the housing market was set to implode, I would have enough money to slap down a deposit on a small flat (at least, outside London). But they’ve all been proved wrong, so far. So what’s so special about the UK?

Low interest rates have been a massive help, enabling hard-up homeowners to keep up with their monthly mortgage repayments. Lenders have also gone relatively easy on people in arrears, rather than simply turfing them out of their homes. Repossession rates are still astonishingly low, given the troubles we face. The shortage of property has also pushed up demand. So we can thank our tight planning laws for that. And deep down, most Brits still believe in the benefits of owning bricks and mortar. And rightly so, given that buying a home is 16% cheaper than renting, according to the Halifax.

The biggest obstacle buyers face is saving a big enough deposit to get a competitive mortgage. With lenders demanding applicants slap down a 25% deposit to qualify for their best rates, the average buyer needs to save up nearly £40,000. In London, they need a lot more. That’s an awful lot of money. Quite frankly, I don’t know how people do it. But nothing about our property market should surprise me these days.

Will it continue to surprise us this year? Given its track record, I wouldn’t like to bet against it.

Joanna Cruddas writes:

I’m very coincidence aware since hearing about the Cambridge Coincidences collection. When I sat down to write this blog, I first looked through an article on blackbirds. Then I glanced through my emails. The first one from a friend read: “Took a long walk today and Judy (the dog) presented me with two dead blackbirds…” Extraordinary.

Last week I was pottering in the kitchen when I noticed a blackbird perched on the balcony railing.

It stayed a full 20 minutes. I kept checking because it didn’t look that well but eventually it hopped off so I hope it was just basking in the winter sun and surveying the scene. Not much of a scene you may think but until a couple of years ago, during the blackbird mating season, the roofs opposite were as lively and competitive as any dance floor.

One April, my sweet pea seedlings were dug up. They were in pots on the balcony waiting to be planted out. First one pot was raided, then the next. The few seedlings left lay limp. I spotted the culprit – a female blackbird. Furious, I shouted at her. From a safe distance, her beady eye stared at me with total insolence. She had a job to do. Shortly afterwards I noticed a mess of twigs and stems on the window ledge beside the dining room window box. It was only when I spotted a nest being built the other side, that I realised my sweet pees had been part of the beginnings of the first abandoned build. The switch of location was obvious. The other side was much more sheltered by geraniums that had survived the winter and were spilling over the window ledge. My anger switched to delight.

However, alongside the excitement came dilemmas. I no longer dared open the window and water the geraniums. It was dead geraniums or abandoned nest. Any visitors to the flat were made to walk and talk quietly. My feathered guests were twitchy and took flight at sudden noise or vibration. Three eggs appeared.

I don’t remember how long it was before they hatched but suddenly there was a hive of activity. Two (one egg didn’t hatch) extra mouths to feed meant a lot of to-ing and fro-ing. By this time I was tip-toeing around my own home, fascinated but protective. Friends were intrigued, but house rules were strict and photography had to be banned. The blackbirds were frightened if we went near the window.

In the end, and to my dismay, it was me who caused these two tiny birds to fly the nest. By mistake I frightened them. In a nanosecond, off they soared, or off one soared. The other hit the neighbouring house. The commotion was extraordinary. The male blackbird squawked and stamped up and down the roof in a state of total anxiety high above the stunned and terrified fledgling cowering on the ground. The female blackbird sang and darted about in a frenzy, but neither went down to the ground to be with it. Rightly or wrongly, I did. I burst through my neighbour’s flat, scooped up the tiny bird and brought it back to the window ledge. By the next morning it had hopped into the shelter of the geraniums where it remained seemingly paralysed with fright.

I supposed the adults wouldn’t go near once I had touched it. Perhaps they wouldn’t have anyway. But they were still on the roof opposite. I left for work and when I came home it and they had gone. Who knows how this ended, but a few weeks later I saw in the park, just yards from where I live, an adult female blackbird pecking about with two younger ones. I just had to hope it was my friends.

I left the nest on the window ledge for many weeks, but eventually it seemed time to move it. The mark it left was of a perfect circle that could not have been bettered by a compass.

Maybe it was a coincidence, but the following spring there were no flirtations on the roofs opposite. I felt I had offered an unsafe house and the word had got around. The next spring was the same. So the arrival of a male blackbird on the balcony last week has been a big moment. I’ll let you know if I spot any romance in the air in coming weeks.

DON’T MISS the RSPB Big Garden Birdwatch this weekend, January 28/29. Just take an hour to watch and count the birds you see in your garden or local park. Click on the RSPB Big Garden Birdwatch link for counting sheets and information on how to submit your results.

The Three-Year Allotment Notebook by Joanna Cruddas with photographs by Edwina Sassoon is published by Frances Lincoln at £12.99