Month: February 2013

Free Travel Insurance from your Bank

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I’m back from holiday now, but I’m still in the travel mood, so here’s a quick guide about free travel insurance with free bank accounts.

If you’re travelling abroad, you need travel insurance to cover you for medical expenses abroad, lost or delayed baggage, and trip cancellation, should you need to postpone your holiday due to illness. Hopefully none of these things will happen to you, but it’s always safer to be covered, particularly if the insurance is free!

Please ensure you read the policy documents – in particular the key facts boxes, in order to ensure that the insurance is right for you.

Free Worldwide Travel Insurance with Citibank Plus / Citigold

If you’ve got £1,800 to credit into your bank account each month (use your salary or a standing order), and have two direct debits paid out a month, the Citibank Plus account gives you free worldwide travel insurance, including winter sports cover. This covers your family (partner and children).

If you’ve got £5,000 to credit each month, then you can apply for a Citigold account, which gives you a concierge service and eight free SWIFT/CHAPS transfers a month to make payments abroad each month in addition to the travel insurance.

Free European Travel Insurance from Nationwide

If you aren’t travelling outside of Europe, Nationwide’s Flexaccount offers a lower monthly credit requirement: £750, and no need to transfer over direct debits. You do need to plan a bit in advance though, the money needs to be credited in for three consecutive months, and they’ll write you a letter when you’re eligible.

Dynamic Currency Conversion – a real world example

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I’m writing this from Kuala Lumpur, Malaysia, where I’m currently on holiday with my family over the Lunar New Year period. Whilst here, I needed to get some local currency out – the Malaysian Ringgit – to pay for some bills (I’d use the credit card, but they don’t seem to have as wide an acceptance here!)

At the cashpoint, I was offered the choice in Pounds Sterling rather than Malaysian Ringgit – around £213.00 for RM1,000.00. Because I was using my Metro Bank Debit Card, I knew that being charged in the local currency would be the best option: fortunately it was possible to opt out. On getting back, I found out that my card had been charged £205.79: £7 less than if I’d opted to pay in pounds.

This isn’t restricted to cash machines, however: it can also be found at credit card terminals in shops – so, if you’re ever asked whether you’d like to pay in pounds abroad, you should always decline if you’re using one of the recommended cards.

Matched Payroll Giving – How a £75 donation could be worth £1,000 to charity

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If you’re working in a big company, chances are that they’ll have a payroll giving scheme, which lets you donate part of your salary to a named charity (or into a charity giving account such as CAF or Charities Trust, who provide you with charity vouchers which you can pass on to a charity of your choice).

Additionally, many large companies participate in matched and fundraiser matched giving, in which they’ll double the amount you donate or fund-raise for charity, up to a set limit each year.

How could my £75 donation turn into £1,000

The headline title admittedly requires quite a unique circumstance: if you’re a higher rate taxpayer whose employer participates in a matched giving scheme, and you’re donating funds to someone who works at a company who matches fundraising donations, to a charity that’s part of the UK Aid Match scheme, your donation would be doubled three times, resulting in that £1,000 headline figure.

You start by donating £125 through your matched giving scheme. As a 40% taxpayer, this is the equivalent of donating £75 after tax.

Your employer then matches this £125, giving you a £250 donation which you pass on to the fundraiser. They then apply for another £250 from their own employer, making a total donation of £500. This total donation is then matched by the UK Government as part of the UK Aid Match scheme, making a grand total of £1,000 for that charity.

At the time of writing the only participant in the UK Aid Match scheme is Opportunity International UK – City AM Christmas Appeal 2012, but there should be more charities later in the year – Sport Relief was just one of the many charities supported last year.

Your everyday donations probably won’t be matched this many times, but there’s still some financial advantages in giving to charity via payroll giving rather than claiming gift aid later, particularly if your company participates in matched giving.

How does this compare Gift Aid?

If you’re a 40% higher rate tax payer, Gift Aid will only cover the basic rate of income tax of 20%. In order to claim the difference, you’ll need to send in the details on your tax return, or tax review form if you don’t normally fill in an annual return.

Additionally, most employers won’t match the gift aid element of your donation.

What if my company doesn’t participate in Matched Giving or Payroll Giving?

If you’re a lower rate tax payer, simply complete a gift aid form with your donation. If you’re paying 40%, you’ll need to send in the details on your tax return, or tax review form if you don’t normally fill in an annual return to claim your money back.

Can I donate to fundraisers using online donation sites such as Just Giving or Virgin Giving?

No. You can send the fundraiser the charity voucher directly, and they should be able to add this to an “offline” donated amount.

High interest current accounts – two 3% accounts

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It might not be the most interesting item to tick off your financial checklist, but don’t overlook the importance of having a good current account. Since you’re likely to have a bit of money in there to cover your everyday expenses, it’s important that you select one with a good interest rate.

At a time in which savings accounts don’t often get above the 3% mark, it’s also a good place to put in your excess savings (after you’ve exhausted your tax free ISA allowance, of course!)

Santander 123 Account

If you’re paying for your phone contract, utilities and council tax, then the Santander 123 account could be right for you.

It comes with a rather unique features: cashback on your direct debit bills. With 3% cashback on phones, TV and broadband, 2% on gas and electricity, and 1% on your council tax and water (and Santander mortgage payments), it could work out as quite good value. The caveat is the £2 monthly fee – you need to do a few sums to work out whether the cashback will outweigh the charge.

If the account makes sense for you, then it pays 3% on balances above £3,000 up to £20,000 when you pay in £500 a month.

Plus, apply through TopCashback and you’ll earn £45.45*

Lloyds Classic Account with Vantage

Someone else paying the utility bills? Here’s an alternative account for you:

Lloyds TSB’s basic current account offers a great 3% on balances between £3,000 and £5,000: and if you’ve got more than £5,000, you can simply open up to two more. To be eligible, you need to pay in £1,000 a month and stay in credit.

Find out more at the Lloyds TSB website.

*I earn a commission from this click if you are a new TopCashback user. An amount equal to this commission will be donated to charity once it it paid to me.