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Just 60 years ago, the economy was rarely spoken about. Today, you can barely escape it. But has our economic literacy kept up? Moneywise explores the case for making it compulsory…

Every autumn, the Chancellor of the Exchequer poses outside 11 Downing Street with his ministerial red box, before being whisked away to Parliament to deliver his Budget speech.

This speech is his chance to tell the country how he intends to spend the billions of pounds gathered from us in taxes – and how he plans to collect more from us in the next year.

What he says affects all of our lives. It impacts how much we pay to fill up a tank of petrol, whether we can afford to buy a home or go on holiday.

But how many of us actually understand what he’s on about?

In his speech this October, Chancellor Philip Hammond used the word ‘economy’ or ‘economic’ 28 times.

But a charity called Economy, which campaigns for understandable economics, asked 5,000 people last year how much they felt they understood about the economy.

The answer? Not very much.

As Ali Norrish, the charity’s head of research and schools, explains: “Ask an adult to tell you what the economy means. Most will pull a horrified face and draw a blank. Almost none will give you a confident answer.”

Only 10% of us know what Gross Domestic Product (GDP) is, the measure the Chancellor uses to judge the size of the economy and whether it’s getting bigger or smaller.

Only 15% understand the definition of inflation, the measure of how prices are rising, which the Bank of England tries to control by doing things that cut or boost savings rates and make mortgages more or less affordable.

A growing movement is trying to close that knowledge gap.

It believes that economic arguments leach into all parts of our everyday lives. They are used to justify everything from freezing the wages of nurses to curbing immigration to building new roads. Therefore, everyone should have access to economic literacy to gain the confidence to engage in these issues and speak the language in which they are discussed.

At the first-ever Economic Literacy for Everyone Summit in October, teachers, students, public figures and national education bodies met to come up with a plan to make economic literacy widely available.

The event in London was organised by Economy. It points out that 76% of the UK public think we should receive a foundation in economics before we leave school, but that it does not have a single mention in the national curriculum.

The summit was not pushing for everyone to be taught the technicalities of economics – macroeconomics, monetisation or monopsonies.

Baseline of knowledge

Instead, it wants all of us to have access to a baseline knowledge of what the economy is, and how it functions and relates to us.

But does it matter that so many understand so little?

Bank of England chief economist Andy Haldane says: “You could argue – and some have – this doesn’t matter much. There are all sorts of things in life where we’re not really literate. We’re not literate, most of us – certainly not me – in how our car works or how our hearts work.

“But those complex subjects are very different. When it comes to the economy and finance we cannot avoid those complexities. We’re reliant on some understanding to make everyday decisions every day of our lives whether it’s jobs or spending or saving or borrowing.”

He adds that on an individual level the cost of being financially illiterate is a “recipe for the three Ds, which are debt, default and depression”.

“The economy matters because it affects you and you affect it”
Andy Haldane

Collectively, a general lack of economic knowledge could even have an impact on the strength of our economy itself.

Mr Haldane continues: “Illiteracy economically gives rise to people making decisions, which if anything amplify bad outcomes in the economy such as recessions and depressions.”

“So the popular narratives people use about their lives and the economy have been found to be an important driver of the economy,” he explains.

Talk of the economy is a relatively recent phenomenon, but appears to be growing every year, making the case for economic literacy ever more powerful.

Economy chief executive

Joe Earle puts it like this: “Before the 1950s, the economy wasn’t mentioned in any winning party manifesto. Now it is central to society.”

He adds it was even used by a children’s charity recently as a reason why parents should read to their children before bed – because it would boost the economy. The same social issues were always discussed, but not using the economics jargon so prevalent today.

Economy is running economics crash courses with adults in marginalised communities, developing courses in schools and running a free teacher training conference next year to show teachers how to embed economic literacy in schools.

While it doesn’t teach A-level or degrees, some hope that by making economic literacy more mainstream it will pique the interest of – and create greater confidence among – a wider pool of students who will then go on to take the subject further.

This could also help address the imbalance whereby those who make decisions about the economy are far from representative of the people affected by those decisions.

At the moment, 0.8% of state-educated children go on to study economics, compared to 9.8% of those who are privately educated. Just 28% of economics undergraduates are women.

Gender gap

It’s perhaps no surprise, then, that Britain has still yet to have a female Chancellor of the Exchequer or Governor of the Bank of England.

Rachel Reeves, Labour MP for Leeds West, speaking at the summit explained that in her career as an economist and at the Bank of England her peers were overwhelmingly of a particular background.

She says: “The people who study economics, at school and then at university, then go on to be in the positions, either dominant in the City... but also in places like the Bank of England and the Treasury, are making policies that affect all of our lives... [There are] inequalities about who has access to those types of jobs and opportunities.”

Ms Reeves adds: “I wonder how many times people in communities like mine all around the country are asked for their views and input into economic decisions [made] on their behalf and that have such a drastic effect on their lives.”

Having a more diverse group of people talking about the economy may even help shape the language itself, making it more relevant to people’s lives.

It was Margaret Thatcher who said in 1985: “You and I come by road or rail. But economists travel on infrastructure.”

Of course, there are areas of economics that are technical, but there are times when jargon creeps in needlessly, making it harder for everyone to engage in issues that affect them.

It is easier for politicians to justify social decisions as ‘best for the economy’ when so many people don’t feel comfortable talking about economic issues.

What then is economics?

At the summit, a group of school children put the question to Andy Haldane.

He says: “They said ‘give me a one sentence description of what economics is. Now I’ve never been asked that question before and I didn’t have an instant answer. So, in true official style I threw it back to them and crowdsourced a solution. And Fatima and her team brought me, after an hour, their description of what economics is – and it’s brilliant.

“She says: ‘Economics is defined as how the decisions you make in everyday life impact the community and the community’s decisions impact you.’

“And that is exactly what the economy is about. The economy matters partly because the economy affects you and partly because you, the person, affects it.”

Tanya Gupta, 16, who studies economics at Watford Grammar and came along to the summit, says that lots of her friends don’t really know what she’s studying. “They think it’s all about money. I tell them economics is just about the decisions you make.”

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Christmas is approaching and another New Year beckons. Bring it on. For me, on Christmas day it will be turkey, Christmas crackers and the odd tipple or three with my dearest mother

Time to reminisce about Dad, visit his memorial plaque at the crematorium, lay some flowers and say a few words – and maybe even go for a painful jog around the Brabazon golf course, made famous by epic Ryder Cup battles lost (once), won (twice) and drawn (once).

Then it will be straight back to London, for work, New Year’s Eve and a pyrotechnic display to end all displays in central London. I shall watch from my 3ft square balcony while Barry Manilow purrs away on my retro record player (for some inexplicable reason Copacabana is a New Year’s Eve favourite of mine).

Like everyone else at this time of year, I will take time out to reflect on the year just gone – and think about what 2019 will bring.

A marriage in the family? Maybe: the middle of my three ‘boys’ – now aged 26 – has just got engaged and he seems happier than I have ever seen him.

Freedom from a mortgage at long last? (50/50). A visit from Agent Million of National Savings & Investments telling me I am its latest Premium Bond ‘millionaire’ prize winner? No way, I have more chance of travelling to the moon while holding hands with Sir Richard Branson and persuading him to sing Copacabana than Agent Million rattling my front door.

In fact, when it comes to Premium Bonds, my middle boy never seems to stop winning.

At this time of year, I also always look back and forward from a personal finance perspective (yes, I know, it is somewhat sad but it is what most money geeks like me tend to do).

Don’t forget to listen to Barry Manilow on New Year’s Eve

Looking back, I feel somewhat indifferent about how things have panned out on the family finance front in 2018. Of course, it is heartening that 10 years on from the 2008 financial crisis we seem at long last to be creeping out from the long jaws of austerity.

But the economy is hardly bouncing along – more trundling – and stock market wobbles are a regular occurrence as interest rates start to rise (for the record, equity markets do not particularly like it when interest rates are on the march). There may not be a banking crash on the horizon, but do not rule out a severe market correction in the months ahead.

A further bank base rate hike to 0.75% in August this year should have brought a little joy to savers. But some naughty building societies and many naughtier banks decided to act Scrooge-like four months early by passing on little of the rate rise to savers. Unimpressive behaviour. Despite welcome entrants into the savings market such as Goldman Sachs (trading under the Marcus brand), earning a half decent return from cash will remain a challenge for the foreseeable future.

Of course, while savers are suffering from the parsimony of the banks and building societies, borrowers continue to enjoy competitive loan rates. I am currently in a fixed-rate mortgage and if you are a homeowner I implore you to follow suit. I can think of no better financial protection for the challenges that lie ahead – post Brexit and beyond and that includes the possibility of a free-spending Labour government.

If there were one wish that I could have granted this New Year’s Eve, it would be for the personal finance industry to become more welcoming and embracing. It still amazes – and annoys – me that most financial companies are not interested in cementing long-term relationships with customers. It’s behaviour that often results in loyal customers being discriminated against in favour of new ones – across a broad spectrum of product areas including broadband, insurance, mortgages and savings.

Maybe the super complaint that Citizens Advice has recently lodged on this issue with the Competition and Markets Authority will help change behaviour. I hope so because it is illogical and unfair.

So I wish for a 2019 where TLC (tender loving care), not QS (quick sale) becomes the mantra in financial circles, where loyalty is routinely rewarded by financial companies that are built on a commitment to customer service. Dream on I hear you chirp? Maybe, but you have got to aim high.

All that remains is for me to wish you a super remaining 2018, a wonderful Xmas and prosperous New Year. And don’t forget to play Copacabana on New Year’s Eve. You will go into 2019 with a smile on your face. It’s 100% guaranteed – a bit like NS&I (100% guaranteed by HM Treasury).

Jeff Prestridge is the personal finance editor of The Mail on Sunday. He won the Contribution to Personal Finance Education category at the Santander Media Awards 2016. Email him at columnists@moneywise.co.uk.

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Given the focus on the shortage of affordable housing, it’s surprising that there are thousands of empty properties around the UK, many of which could make great homes. Here, we explain how to find one, bag a bargain – and even get money towards doing it up

There are around 700,000 empty homes around the UK. While a good proportion of these are just temporarily vacant, the estimated figures for long-term empty properties – those that have been empty for over six months – are still high at approximately 271,390. In England, there are 205,293; in Scotland, 37,135; in Wales, 27,000; and in Northern Ireland, 1,962.

There are several reasons why homes are empty. Chris Bailey, campaign manager for charity Empty Homes, says that while some expensive flats bought solely for investment purposes by overseas landlords or investors are left empty, the vast majority of properties are empty because of ordinary financial concerns.

“One of the most common reasons that properties are empty is because the owner cannot raise the money to do the property up to let it out, or sell,” he explains.

“Perhaps they previously rented it out and it now needs more works done to it or maybe they inherited it. Then there are those bought unseen at auction as investments; these can prove challenging and may require more working capital for refurbishment than the buyer has available.”

For those seeking to find a cheap property to buy, it’s certainly worth considering such properties. With so many spread around the country, there is a good chance that there is an empty property near you. Moreover, with no residents or tenants, it is likely to need some remedial work and may therefore be priced to reflect this.

“You may need a broker to find a lender willing to lend on an empty home”

How do you find empty properties?

You will have to be prepared to do some research to find empty homes in your area. If you live near an empty property, there may be a gardener or occasional visitor whom you can approach. Alternatively, a neighbour may know something about it. You can even drop a note through the letterbox giving your contact details, explaining that you are potentially interested in buying the property.

Estate agents are also worth contacting as they may know of a local flat or house that needs rescuing or have one languishing on their books that needs work.

Alternatively, you can try to obtain information from the local council about the property. Many have an empty property officer, who may be able to tell you more about an empty property you’re interested in or about other empty properties in the neighbourhood. If the property is embroiled in a planning dispute, the local authority planning office should have a record of any planning applications registered to that address.

As many local authorities have schemes to try to get empty properties back into use, they may be able to trace the owner and pass your details on to them. However, there are limits to what they can do for you as there are data protection guidelines that need to be adhered to.

Once you’ve identified a potential property in England or Wales, you can carry out of a search for the empty property’s owner on the Land Registry’s website. For only £3, you can then download a Title Register providing this information. For properties in Scotland, you need to contact Land Searches Scotland. Strangely, in Northern Ireland you need to physically visit a Land & Property Services customer information centre or write in.

Online auction catalogues are also a good place to find empty properties for sale. For instance, Savills Auctions publishes its catalogues two weeks before a sale and allows those interested to attend a viewing before the auction.

“Online auctions are a good place to start”

Buying the property

It’s crucial to make a proper assessment of any property before you buy, as Mr Bailey points out: “If it’s cheap, there is a reason.” Therefore, it’s advisable to get a full structural survey done, as it should pick up costly defects such as subsidence.

Some councils, such as Kent County Council, provide interest-free loans to help get empty homes refurbished or converted into good-quality residential accommodation. Rhondda Cynon Taf County Borough Council in Wales even provides grants of up to £20,000 for owner-occupiers to renovate an empty property they’ve purchased – an invaluable aid to first-time buyers.

Getting a mortgage

Cash buyers obviously have an advantage when buying empty properties requiring work, but if you need to borrow funds there are many options available.

If the property is run down but habitable (has a working bathroom and kitchen) and needs only minor improvements, a standard mortgage is an option. However, many lenders may only lend up to 80% to 95% of the current value of the property and may withhold some funds as a ‘retention’ until works are complete.

If the property is not habitable, you may need the help of a mortgage broker to find a specialist lender willing to lend against it. David Hollingworth, London & County’s spokesperson, advises that owner-occupiers contact a lender such as the Ecology Building Society or Buildstore Mortgage Services.

“A stage-payment mortgage is most suitable if the property is not habitable, or you need help to fund the property purchase and improvement works,” says Rachel Pyne, director of financial services at Buildstore Mortgage Services.

“Your borrowing capacity is not limited by the current value of the property. You can potentially borrow 85% to 95% of the property purchase and improvement costs, up to a maximum of 85% of the expected end value of your home when works are complete,” she adds.

Saffron Building Society offers buy-to-let mortgages for properties that are not immediately lettable and require light refurbishment (new kitchen, bathroom, rewiring, central heating or general decoration within three months of completion but not structural works).

Mr Hollingworth adds that investors can also consider a bridging loan to secure short-term funds for renovation works on a buy-to-let property. These are available from specialist lenders, such as Precise Mortgages or Shawbrook Bank.

Mr Bailey points out that if you’re taking on your first refurbishment project it’s worth bearing in mind:

“It’s crucial to do your research, expect some cost escalation and check the local market for comparative cost estimates by talking to reputable local builders, such as one that is a member of the Federation of Master Builders.”

Given the huge number of long-term empty properties in the UK, it is certainly worth keeping an eye out for a potential property bargain.

“We couldn’t afford to have the house lying empty”

A frequent reason for a property lying empty is a change in family circumstance, such as a death or marital breakdown.

When Ms Jones and her partner split up in early 2017, both moved out of their three-bedroom semi-detached property in Enfield, north London. Within a couple of months, the property was up for sale for £539,000. After a year empty, they agreed to switch estate agents and dropped the price, with the property selling in September for £440,000.

She explained: “The buyer definitely got a bargain as similar properties in the area go for much more, but we were forced sellers. With a mortgage and council tax to pay, we couldn’t afford to have the property lying empty.”

“Being focused on our end goal gave us the strength to carry on”

Victor Evans and Robin May (pictured left to right) both live in Dover and learnt from an estate agent of a local property that had failed to sell at auction.

They had previous experience of refurbishing properties and liked St Martins Yard in Lorne Road, Dover, so much that in 2010 they took out a £190,000, 100% mortgage with NatWest to buy it. The building, formerly used for car sales, had been derelict for 10 years.

Their aim was to transform the site over 18 months to provide family homes and flats for sale.

However, things didn’t go according to plan as obtaining planning permission from Dover Council took far longer than expected. Permission was only granted in 2012 for five houses and seven flats on the site.

By then, the original development loan from NatWest for a further £650,000 had expired. Fortunately, Kent County Council’s (KCC) ‘No Use Empty’ initiative stepped in to unlock phase 1, with an interest-free loan of £125,000 to develop the five houses.

After the houses were completed in June 2016, KCC then approved another loan of £425,000 at 5% interest to ensure the project completed, creating a further seven much-needed flats.

The homes, which are currently rented out, are now valued at £1.6 million and the KCC loan of £550,000 in total, is due to be paid back in March 2022. In addition, there is still around £160,000 of the original NatWest mortgage remaining.

Victor and Robin did 90% of the work themselves and spent £100,000 of their own money on materials over the years to complete the mammoth project.

Despite all the ups and downs, Victor told Moneywise: “Being totally focused on our end goal gave us the strength to complete the site.”


Chris Menon is a freelance financial journalist and runs the investing blog Safestocks (Safestocks.co.uk)

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Jon Bannister (pictured below) was challenged by friends to collect a complete set of 54 rare 50p coins. But when coins became harder to collect, he switched to cryptocurrency. Here, he shares his experiences as a collector

When I was originally challenged to collect a whole set of 54 rare 50p coins, I managed to complete the challenge within two months.

I have now collected four whole sets of every coin including rare coins, such as the Kew Gardens 50p, the London 2012 Olympic 50p series and the 2005 50p commemorating the 250th anniversary of Samuel Johnson’s Dictionary.

At the time I completed the first collection, the value for all 54 coins was nearly double its face value. Recently, I have seen some Samuel Johnson’s Dictionary coins on eBay for up to £3,000 and I’ve actually got 50 of them in my collection.

But now that I have four complete sets of the 54 rare 50p pieces, I’ve stopped collecting. Each set is worth between £500 and £600, and I think I’ve withdrawn around 18,000 to 20,000 50p coins while collecting.

I’ve found getting valuable 50p coins by withdrawing from the bank to be harder and harder. When I first started, I was probably getting around 200 or so good coins, but more recently I would withdraw £1,000, and would only get around 15 to 20 valuable coins.

My feeling is that over time more people have started to collect, so it has become more difficult to find rare coins. I ended up wasting three to four hours, only to find around £10 to £15 of rare coins. It wasn’t worth the hours I spent.

I’ve given sets of rare 50p coins to my wife, son and daughter, and kept one for myself, so we have a collection each to hold on to and decide if we want to sell one day.

Now I’ve moved on to digital currency, as I think it is more financially rewarding. For instance, the Kew Gardens 50p is valued at between £180 and £200 and I have five of them, but the value of a cryptocurrency coin can go much higher. Bitcoin peaked at $19,000 (£14,850) in January 2018.

I had a few friends who were buying and selling digital currency. I’d heard of Bitcoin a while back and ended up dipping my toe in the water.

As a result, I’m now working for a number of different initial coin offerings (ICOs). They’re trying to raise funds to launch their own cryptocurrencies, with some quite large and high-profile companies raising up to $19 million (£14,853 million) each.

I’m also thinking about starting a business offering hints and tips on buying cryptocurrency.

I was quite sceptical at first. I have an IT degree and I’ve done a lot of computer development. I understand computers but it was hard for me to get my head around crypto – that you can’t physically hold it in your hand or put it in a bank.

I use a Trezor hardware wallet [a special type of bitcoin wallet that stores the user’s private keys in a secure device] to store my crypto coins. Right now, I have around five million coins in my portfolio.

I’m aware that I need to do my own research on each company and each coin before investing. I need to see the team behind it too. I want to know if the coin solves a problem and I try to find innovative companies. For example, I’m working with a company called AirWire. It is developing a way to send cryptocurrencies via email, text message or social media.

I try to keep my portfolio at around 40 to 50 different tokens, so I have a diverse spread.

If some go off really well, then fantastic. But you have to be careful about what you are investing in. Find out more about how it works. Some currencies I bought for less than 1 cent are now worth around $5.

Those who got into Bitcoin at the right time could have bought it for around 3 cents. It was valued at $19,000 at one point. I kick myself that I didn’t get involved four or five years ago.

Unfortunately, though, I’ve been scammed a number of times. I’ve lost some money on certain companies as well. That’s something you have to be alert to.

You need to know what you’re buying and selling, and the apps you use, or you could end up losing a lot of money.

It’s also easy to lose your money if you lose the password to your digital currency wallet or your hardware wallet. Your currency could be gone for ever. That’s a big risk.

The hacking of an exchange and theft of your cryptocurrency is a risk too. It’s not regulated, and there’s no financial protection.

I think the age of physical coins is coming to an end and digital currency will be the future of money. That’s why I’m collecting cryptocurrency now, in case some become big winners in the future, like some of my 50p coins.

Do you have a lesson you’ve learnt about money you’d like to share? Please email editor@moneywise.co.uk


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We look at the biggest funds across different sectors, why they’re so popular, whether it’s justified and if they’re better investments than smaller rivals

They are the giants of the fund management industry, with billions of pounds under management and an enthusiastic following of investors.

Their status as major shareholders in companies also means they often wield enormous power inside boardrooms.

They can influence business decisions, ratify or block managerial appointments, and campaign for cultural changes within organisations.

But is that enough to make the largest UK funds attractive? Should you be putting your faith and money into these portfolios or opting for smaller alternatives?

Unfortunately, there is no simple answer. Funds grow for a variety of reasons – and these will determine whether or not they should warrant your attention.

In many cases, the size – and popularity – of a fund will be driven by past performance figures, according to Patrick Connolly, a chartered financial planner with Chase de Vere.

“Many investors will jump into top-performing funds, hoping and expecting that the strong performances will be maintained,” he explains.

However, there are no guarantees – which is why there are constant warnings that past performance is never a reliable indicator of future success.

A fund’s rapid growth may also be due to a strong, well-resourced sales and marketing operation behind it that is constantly reaching out to investors.

Past performance often drives the size and popularity of a fund

Such investment houses will plough millions of pounds into high-profile advertising campaigns on social media, as well as paying for billboards at railway stations.

Funds can also benefit from being in fashionable asset classes, despite the fact their soaring popularity can easily nosedive should investors get seduced by the next trend.

Having a well-respected manager making the investment decisions can also attract investor interest, as can having particularly low charges.

The situation is further complicated by the fact these large funds don’t all concentrate on the same areas. In fact, they may buy into totally different asset classes.

Some of these portfolios will be focused on equities, some on fixed income. Then there are multi-asset products that embrace equities, bonds and alternative investments.

Quick guide: Is this approach right for me?

Consider investing in larger funds if…

  • You want to be in funds that are popular with other investors.
  • You want to be with a manager who has power in boardrooms.
  • You like the fund’s aims and objectives and they align with yours.

They can also differ in the way they manage money.

For example, active funds are run by managers who enjoy a greater degree of flexibility when it comes to buying and selling stocks.

Passive products, meanwhile, have far less scope as their role is to replicate and track particular indices.

An examination of the largest funds in the UK illustrates the point, with those focused on generating income sitting alongside multi-asset portfolios pursuing absolute returns.

This list also includes a number of UK stock-market trackers and even a portfolio that invests in large and medium-sized equities across the Asia Pacific region.

Passive funds can usually compete in terms of charges because they replicate particular indices, rather than being actively managed, so there are less costs involved.

In many cases, these can track a popular index, such as the FTSE 100, which gives people broad access to the largest UK companies, points out Mr Connolly.

“As the popularity of passive investments has grown, with more investors deciding it isn’t good value to pay the extra costs of active management, some passive funds have also grown large,” he explains.

Distribution channels can also play a vital role in influencing the size of an investment portfolio – especially in the current environment.

“If a fund is too big, it makes it hard to invest in small caps”

“All funds with aspirations to be larger need to be available on the main investment platforms,” adds Mr Connolly.

Many of them can boost inflows substantially by appearing on the ‘best buy lists’ of industry players, such as Hargreaves Lansdown.

Of course, there is always the possibility that a well-performing fund may continue to deliver, points out Darius McDermott, managing director of Chelsea Financial Services.

“However, funds can get too big, which means the manager has to change or tweak their strategy to deal with the extra assets – and then it doesn’t perform so well,” he says.

He cites the example of a multi-cap manager investing in the UK.

“If they get to a certain size, it makes it difficult to invest in small caps at that point as you would own too much of individual companies,” he explains.

Of course, the same golden rules apply with any investment.

Whether or not a fund is suitable will also depend on your goals, the length of time you’re willing to lock away money, and your attitude to risk.

Therefore, the best advice is to monitor a fund to ensure it still meets your needs and there haven’t been significant changes to its size, objectives or management.

“Keep an eye on performance and that the fund is still investing in the same style and strategy as it was when it was growing,” adds Mr McDermott.

Fund to watch: M&G Optimal Income

This hugely popular fund, which aims to deliver income and capital growth, has more than £23 billion of assets under management.

Richard Woolnough has been at the helm of the portfolio since its launch back in December 2006 and is one of the most respected names in the industry.

A graduate of the London School of Economics, he boasts more than 20 years of experience in fixed-interest investing and has been with M&G since 2004.

The Optimal Income fund invests in a broad range of fixed income securities, governed by where he sees the greatest opportunities.

It may also hold up to 20% of the portfolio in company shares when he believes they offer better value than bonds.

Exposure to these assets is gained through physical holdings and the use of derivatives, with an in-house team of credit analysts on hand to help select individual bond issues.

Currently, the fund is 48.6% invested in investment-grade corporate bonds, with 26.3% in government bonds and 12.3% in high-yield corporate bonds.

As far as credit ratings are concerned, it has 38.1% in those rated BBB, with 23.7% in AA, 12% in AAA and 10.8% in BB.

Meanwhile, the largest issuers in the fund – excluding government bonds – are Verizon Communications (4%), Microsoft (3.1%), AT&T (2.8%) and Bank of America (2.1%).

Value of £100 invested in the fund over five years
Year *Year to date 2017 2016 2015 2014 2013
Fund percentage movement in year (%) -1.52 5.77 8.14 -0.86 5.16 7.67
Value of £100** (£) 126.46 128.4 121.4 112.26 113.23 107.67

* To 22 October 2018 **The £100 was invested on January 1, 2013

Manager Richard Woolnough
Launch date 8 December 2006
Total fund size £23.2 billion
Minimum investment £500
Initial charge 0%
Ongoing charge 1.41% (including AMC)
Annual management charge 1.25%
Performance fee None
Contact details for retail investors Mandg.co.uk

Rob Griffin writes for the Independent, Sunday Telegraph and Daily Express

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From making reusable loo paper to paying only for the ingredients you need, living a sustainable lifestyle can save you money. Read our guide to creating your own eco home

A few changes to your home and habits can cut your impact on the environment and save you money. To get you started, we’ve highlighted 10 ideas that can easily be carried out in your spare time.

1. Switch energy supplier

This is one of the quickest and easiest ways to make big savings fast. Although renewable energy used to come at a premium, half of the cheapest tariffs now come from green fuel, with companies such as Bulb, ENGIE and Octopus often beating the Big Six energy giants including British Gas and EDF. Households can save £273 a year, on average, on a typical standard variable tariff by switching to green fuel. E.ON and Npower now offer a green tariff, which is cheaper than their equivalent standard tariff.

2. Fix – don’t replace

Rather than assuming something is beyond repair, try fixing it yourself. Search on YouTube and you will probably find a step-by-step guide on how to repair your particular appliance. Or find out if there is a free repair café in your area via Repaircafe.org and pick up some tips at the same time. Make sure you repair them safely though – especially if they’re electrical. If you do have to replace an item, make sure it is built to last by using sites such as Buy Me Once (UK.buymeonce.com), where products are tested for their longevity such as cooking pans with a lifetime guarantee.

Don’t assume an item is beyond repair and try fixing it

3. Throw a swishing party

Swishing is a fun way to swap clothes with friends and get a whole new wardrobe without spending any money or throwing fashion into landfill. Get a group of friends together, ask them to bring along any clothes they are bored of or that don’t fit and provide some drinks and nibbles. Alternative ways to find cheap secondhand clothes, or to sell on your own items, is to join local Facebook selling groups or make use of apps such as Gumtree and Shpock.

4. Reduce food waste

The average UK household loses £470 a year on avoidable food waste, so planning your meals before your weekly food shop will prevent impulse buying and ensure you only buy what you need. Portion planning, batch cooking and freezing leftovers are also cost-effective ways to ensure your meals go further.

Zero-waste shops, such as Refill Revolution’s shop in Market Harborough, Leicestershire, enable shoppers to buy recipe-size portions, such as a teaspoon of cardamom, for a few pence so they don’t end up with a jar of unused ingredients.

Smartphone apps, such as Good to Go, can help customers pick up takeaway, restaurant and hotel food at massive discounts before it is thrown away. Similarly, Olio (Olioex.com) connects neighbours and shops so surplus food can be shared for free.

5. Take your own Tupperware

Shoppers are now adept at bringing their own bags, so the next step is to shop with your own reusable containers. Plastic containers, glass jars and vacuum flasks can all be used at a growing number of zero-waste shops, market stalls and coffee shops where great deals and discounts can be found.

“It is the traditional way of how our grandparents shopped. It is about thinking ahead and looking back to what we did before plastic,” says Georgina Wilson-Powell, editor of sustainable living magazine Pebble. And if you are attending an event or meeting with hospitality don’t be embarrassed to turn up with containers to take home unwanted food. You will get a free meal and prevent food from being thrown in landfill.

6. Make your own products

There are many inventive recipes online to make haircare and skincare products out of items in your kitchen cupboards. Meanwhile, bicarbonate of soda, lemon and vinegar are great cleaning products and cost less than £1 each.

Jen Gale, sustainable living champion of Asustainablelife.co.uk, also recommends using white vinegar instead of dishwasher rinse aid. Five litres can be bought for £10 on Amazon compared to £1.30 to £3.50 for 100ml of rinse aid.

“I also make my own deodorant from coconut oil, cornflour, bicarbonate of soda and essential oils. It is so much cheaper than buying it,” adds Ms Gale.

7. Apply for home improvement grants

Under the Energy Company Obligations scheme, eligible customers can apply for thousands of pounds’ worth of energy-efficiency improvements, including replacement boilers and loft and cavity wall insulation.

Free loft and cavity wall insulation is easier to come by, and even if you are not eligible for a 100% grant you will probably only have to pay a tiny amount for the work, often less than £30.

Homeowners can also get money towards the costs of renewable heating, such as biomass boilers, solar water heating and heat pumps, via the Domestic Renewable Heat Initiative. And if you are elderly, disabled or on a low income, your local Home Improvement Agency may help you to repair, improve, maintain or adapt your home.

8. Learn how to sew

Being able to darn clothes and stitch hems is a great skill to have and will prevent you from throwing away otherwise good clothes. Sewing ability also comes in handy for making kids’ costumes rather than buying them and creating items to keep the house warmer to avoid spending more on fuel, such as draft excluders or lining curtains with old blankets.

Reusing and upcycling items in this way cuts down on the energy used to make and transport bought goods and reduces plastic packaging.

9. Invest in reusable menstrual products

On average, women menstruate for around 40 years, having approximately 480 periods, costing an estimated £4,800, according to the charity Bloody Good Period.

Ella Daish, a campaigner to end period plastics, says there are huge financial benefits to going green with your flow.

“Reusable products, such as menstrual cups, have a 10-year lifespan so women only need four in a reproductive lifetime. Each cup costs around £20 so that works out at just 16p per period with an overall saving of £4,720.”

Other alternatives are reusable pads with a lifespan of five years. These cost around £5.50 each, and an initial pack of 15 pads for a cycle would cost £82.50. Over 40 years, this would cost £660 – a saving of £4,140.

Only buy items you need and try not to spend any cash for a day

10. Just stop buying

Being aware of your consumption and only buying new items when absolutely necessary can have the biggest impact on your wallet and the environment.

Buy Nothing Day, which took place on 23 November this year, is the antithesis to Black Friday and advocates spending no money for the whole day.

Ms Gale and her family spent a year buying nothing new and saved £2,000. “Being thrifty is not about being tight with money it is about being careful with resources and more thoughtful about your consumption,” she says.

“My solar panels have paid for themselves now”

Investing in an electric car and solar panels has meant that Susanna Riviere (pictured right), 64, has reduced her monthly outlay and is an investment in the planet she feels passionate about.

Her net annual fuel bill is £500 for a three-bedroom, semi-detached house in London and, after almost 10 years, the solar and hot water panels have paid for themselves.

“It cost us £10,400 for the eight panels, but we got a grant of £2,500 from the Energy Saving Trust and we get £800 a year back from the feed-in tariff,” she says.

The panels are also used to charge her electric car and bicycle, which she does when the sun is out so the electricity is free.

“I got a £4,500 grant towards the cost of the car and a free home charger. The car was a similar price to a non-electric model, so in the long run I will be saving money.”

The running costs of Susanna’s car are low because the insurance is less and there is no road tax or congestion charge to pay.

The retired solicitor and meditation teacher also advocates refusing to buy goods just for the sake of it.

“If I want to acquire something, I think do I actually need it? We buy a lot of stuff we don’t actually need,” she adds.

“We make our own reusable loo paper”

From making her own “foof wipes” to cultivating yoghurt and cooking popcorn, community exercise assessor Kelsey Sprintall (pictured above with her two daughters, Neve, aged 10, on the right, and Willow, aged eight) is doing everything she can to reduce waste at home.

“You tend to spend out a little bit at the beginning but then you save from that point on,” says Kelsey, who lives with her husband and daughters in Market Harborough, Leicestershire.

Her most radical creation has been homemade toilet paper.

“The girls and I made them out of terry towelling. We spent about £10 on a metre square and cut them up. We use them just for wees, and the kids and their friends have just adapted to using them. We make a joke out of it and call them foof wipes. Now a pack of toilet roll lasts for months,” she explains.

The wipes are deposited in a small bin scented with essential oil and then washed inside a mesh bag alongside a regular dark wash.

“It is just like having a few extra pairs of socks to sort out,” says the 41-year-old.

The family has also invested in a yoghurt maker for £30 and they forage for fruits and scrumping for apples to get their flavourings.

And instead of buying multi-packs of crisps, they now spend 35p on 100g of popcorn, which they flavour with household spreads such as Marmite.

“A bag of popcorn kernels goes far so that’s a good saving. I also make my own butter with cream from the dairy, which is comparable in price with the supermarket but is much better quality,” she adds.

Lily Canter is a freelance journalist who writes for a wide range of publications including Metro, The Guardian, The Daily Telegraph and The Times

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Moneywise helps a reader hoping to recover cash from a pre-paid card

In 2013, I loaded money on to a Euro cash passport with Sainsburys ready for a holiday. When I came back, I had €150 left on my card.

I have not needed to use it until now, but found out that it had expired. So I rang Sainsbury’s Bank and it told me that my €150 had been used up in non-use fees over the past five years.

I knew nothing about these fees, but it responded that it was all in the terms and conditions on the booklet I received when I signed up.

However, who reads these? I had expected that all the money would remain until I used it next – if anyone had mentioned non-usage fees when I took the card out, I wouldn’t have done so.

The company now refuses to return my money, saying that I had notice of the fees in the booklet. Is there anything I can do?


I’m afraid not. You’ve fallen victim to the hidden-fees syndrome. I was a victim myself some time ago when I left a currency card languishing in a drawer for a couple of years.

Many of the cards have these stinking, non-use fees, which means your cash simply disappears.

A Sainsbury’s Bank spokesperson explained: “Pre-paid travel money cards can be very convenient as you can track your spending and add more cash at any time. If you don’t use your cash within 18 months, a small monthly fee will be applied. Our terms and conditions can be found on our website and at the point of purchase. There are a number of options to re-activate the card and avoid incurring the fee such as topping it up, using it at an ATM or arranging a buy-back.”

It’s a lesson for all readers: check the charges if you don’t want to lose the cash on a currency card.

OUTCOME: Failure to check fees costs reader €150  


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Rock-bottom interest rates mean savers have seen their returns dwindle in recent years.

Savers looking for an alternative might want to consider a credit union, which sometimes offer better rates.

What is a credit union?

A credit union is a non-profit making co-operative controlled by its members who pool their money together and lend to one another. Once dubbed the ‘poor man’s bank’, their popularity is growing with the number of members hitting two million for the first time this year, according to the Bank of England.

There are more than 380 credit unions in the UK. They operate on the principle of helping people and often have savings rates better than those offered by high street banks.

Like banks, credit unions accept deposits, provide loans and mortgages as well as a host of other financial services. However, unlike banks, credit unions don’t have to pay shareholders, so the cash can be used to reward members.

They are authorised and regulated by the Financial Conduct Authority, and up to £85,000 of your money is covered by the Financial Services Compensation Scheme.

Alternative to major lenders

Credit unions provide a useful alternative for people who have trouble getting credit from major lenders. While some unions offer a fixed rate on savings many still pay a yearly dividend, which is how profits are shared with members.

Andrew Hagger, a personal finance expert at Moneycomms, says: “Unfortunately, many people probably aren’t aware they have one in their local area. They are all individual providers offering different products, so as a consumer you have to do a bit of digging around.”

As an example, My Community Bank is currently offering very attractive rates. Its one- and two-year fixed-rate bonds both pay 2.20% AER, while its three-year fixed-rate bond pays 2.25% AER. The minimum you need to open an account, which needs to be opened online, is £1,000 and the maximum you can save is £50,000.

There are other restrictions. As it is a fixed-term bond, you can’t withdraw the funds early. You must also have a job in what the Office for National Statistics designates a ‘minor’ occupation. This includes nurses, teachers and engineers. A full list is on the My Community Bank website.

“Many people probably don’t realise they have a credit union in their area”

Not just for savings

Credit unions are also seen as a cheaper alternative to payday lenders and sometimes offer better rates than high street lenders.

However, some credit unions may require you to have been with them a certain amount of time before they will lend to you. Be cautious, though, as rates can start from as low as 6% but can go as high as 43%.

My Community Bank, for example, offers loans from £1,500 to £15,000 over one to five years at an APR of between 5.9% and 42.6%, depending on your circumstances.

Meanwhile, credit union retailCURe, which launched last year, offer interest rates ranging from 7.4% APR to 26.8% APR on loans from £250 to £10,000.

You can find out more about local credit unions at Findyourcreditunion.co.uk or you can contact the Association of British Credit Unions (Abcul.org).

Note: Rates are correct as of 20 November 2018.

FEATURED PRODUCT retailCURe Easy Access Savings Account

RetailCURe’s savings account pays 1% AER as well as the annual dividend. You can access your account online or with the mobile app and deposit up to a maximum of £15,000. In order to qualify for the account, you have to work in retail. You can withdraw money whenever you want by transferring electronically to a nominated account.


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Sajiv Vaid (left) and Kris Atkinson, co-managers of Fidelity MoneyBuilder, give Stephen Little the lowdown on their fund – a Moneywise First 50 Fund for beginner investors

What is the Fidelity MoneyBuilder Income Fund?

The fund aims to achieve an attractive level of risk-adjusted return from a richly diversified portfolio primarily invested in Sterling-denominated bonds.

The strategy is designed to generate an attractive income and maintain a relatively low level of risk to other asset classes such as equities and property.

It is invested in corporations that have access to bond markets to fund their business. These include banks, such as Lloyds, firms in the retail sector such as Tesco or utility companies such as Severn Trent or Thames Water.

It is not just UK companies: we also have a lot of international companies that issue in Sterling as well. We have around 300 holdings and around 170 issuers. While this may seem a lot, we are confident in having that type of coverage, as our research team is one of the largest in the City.

What do you look for in companies?

Given the focus of the fund on downsize protection, the fund has a structural bias to non-cyclical sectors such as regulated utilities, consumer goods and secured bonds. A good example of this is housing associations in the Sterling bonds market. We look for sectors that should outperform in a downturn or in a recession, so we have very little exposure to retail or cyclical sectors such as commodities.

What are your top holdings?

As opposed to other retail funds in this space, the top holdings are really dominated by asset-backed securities, utilities or quasi-national European investment banks.

Our exposure to UK government bonds accounts for around 12% of the portfolio. Other top holdings include EDF, Thames Water and Aspire Defence Limited, a bond secured on cash flow from the Ministry of Defence for military barracks in the South West.

What have you recently bought and sold?

Mostly, we have been quite defensive. We have increased our government exposure on UK gilts and also participated in a few new deals in the property sector, such as the housing association, Peabody.

We have been very cautious on the banking or financial sectors because of the volatility and the high correlation to equities. Given the defensive nature of that, we have actually been paring down some of our exposure in that sector. We have reduced our exposure to Axa, Vodafone and EDF.

“We look at many sources for our exposure”

Investment jargon explained

Downside protection: Strategies that aim to reduce the impact of losses

Non-cyclical sectors: Stocks that do well during economic downturns

Concentrated position: When a share or stock represents a large percentage of the portfolio

A bottom-up perspective: Where investing focuses on a company’s performance rather than predictions of what will happen in the industry

How do you manage risk?

Our risk profile is quite asymmetric, but you can balance that by running quite a lot of diversification in the portfolio. So you are looking at multiple sources of income as opposed to concentrated bets.

An equity portfolio can have 20 to 30 stocks where one stock can fall 10% to 15% and then on the flip side another can go up 60%, so it can totally offset that. We don’t usually have that with corporate bonds. If you have a concentrated position and it goes wrong, it is very hard to recover from that. That is one of the reasons why we run diversified portfolios.

How do you identify companies to invest in?

Price and valuation are the key things when we make an assessment about whether we should be investing or not.

Our team of analysts is 30-strong and they spend a lot of time on a bottom-up perspective identifying opportunities.

Companies have to demonstrate a clear strategy regarding capital structure and we look at the cashflows to determine whether the balance sheet is sustainable. How it engages with stakeholders is also important.

Companies which have really ambitious growth strategies that are entirely dependent on raising debts in the capital markets are less sustainable than those that don’t rely on access to them in stressed environments.

What’s been your worst investment decision?

There has not been a particularly bad decision. We were exposed during the financial crisis but the fund’s defensive nature and its underweight exposure to financials really stood it in good stead.

In contrast to how equity investors look at things, we don’t just identify one opportunity to deliver a return - we look at multiple sources in our exposure.

If you had a top tip for a new investor, what would it be?

For me, investors have to understand why they want to be in an asset class.

If you want modest volatility and a low correlation to equities, you should consider exposure to fixed income as part of a diversified portfolio.

As we are late cycle, investors need to adjust their risk profiles as returns going forward are likely not just to be lower from fixed income but also across other asset classes.

The Fidelity MoneyBuilder Income Key Stats:
  • Launched: September 1995
  • Fund size: £3,641 million
  • Ongoing charges (OCF): 0.56%
  • Yield: 2.7%

Sources: Fidelity.co.uk and Fidelity MoneyBuilder Income September 2018 Factsheet

The managers behind the fund

Sajiv Vaid has managed Fidelity MoneyBuilder Income since 2015.

Sajiv was previously at Royal London Asset Management where he managed its flagship retail and institutional corporate funds.

He has also previously managed money at Gerrard Group and Fuji Investments, where he managed global fixed income portfolios.

Co-manager Kris Atkinson joined the fund this year. He started at Fidelity in 2000 as a credit analyst and has over 14 years of investment experience.

Ian Spreadbury, who co-runs the fund, is set to retire at the end of the year.

Five-year discrete calendar performance of Fidelity MoneyBuilder Income Y
Year 2014 2015 2016 2017 2018
Fidelity MoneyBuilder Income Y 5.7% 3.0% 9% 3.3% -0.1%
Sector average 5% 2.2% 8.8% 4.3% -0.2%

Source: FE, 1 November 2018

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