How to save for retirement

Jasmine Birtles is a TV and newspaper journalist and personal finance expert. In her articles she’ll be helping you get the most from your investment and reach your personal goals.  

Retirement seems so far away and there are so many other demands on your income that it’s easy to put it off.

However, the good news about investing for retirement is that even small amounts that are put away now can grow to an impressive pile once you decide to slow down a bit.

The aim is to amass a pot of money that is big enough for you to live on for a few decades (you should expect to have a retirement of at least 20 years, if not considerably longer). How you collect up this pot of money is up to you. Pensions are often a good way to do this – particularly because of the tax saving while you work – but it’s not the only way.

Here are a few ways to save for retirement without having to think too much about it!

Make the most of your workplace pension

This is a lovely easy one because if you are an employee – even if you work privately, say as a nanny or carer – you should automatically be enrolled in a workplace pension. According to the new rules, you should be paying 5% of your income into it and, crucially, your employer will also have to pay 3% extra on top of that. So that’s free money from your employer! Not only that, because it’s a pension, the rules say that the Government has to add in the tax you would have paid on that money. So from the start your pot has grown.

Consider setting up your own pension

If you’re self-employed then you will need to be responsible for sorting out your own pension, if you want one.

Personal pensions used to be expensive (in terms of the management fees) and generally poor-performing. Nowadays though they are forced to charge a lower management fee, so you have as good a chance of the pot growing as you would if you had a workplace pension. The only downside is that you don’t have an employer adding to your pot.

As a self-employed person you could consider investing in:

  • Stakeholder pension (the maximum management fee they can charge is 1.5%)
  • Self-invested Personal Pension (SiPP) where you decide what to invest your money in
  • NEST pension (National Employment Savings Trust)

Use your ISA allowance

While pensions have the advantage of tax put in at the start, when you come to retire and live off your pension you will need to pay tax on that income. However, with ISAs it’s the other way round. You pay into an ISA out of your taxed income, then you’re not taxed on the gains you make and when you take it out at the end you get it all tax-free.

However, if you’re using your ISA as part of your retirement savings (and that’s the right thing to do with it, by the way) then you should be putting money in an Innovative Finance or Stocks & Shares ISA. These do better than a Cash ISA in the long-term. Take a look at Index-Tracking Funds (more in this article on MoneyMagpie.com) as they are a cheap and easy way to invest in the stock market and you can get them wrapped in an ISA.

Get creative about retirement savings

There’s absolutely no law that says you have to invest in pensions or even stock market products for your retirement. Frankly all sorts of different things could set you up for your golden years.  The ideal is to have money in a range of products including pensions, ISAs and, ideally, other investments too.

Other things you could invest in include:

  • Property (either in the UK or abroad)
  • Online lending such as Funding Circle
  • Collections (like art, jewellery, classic cars, Elvis memorabilia, plastic action figures and more!)
  • Gold, silver and other precious metals.

Really, any of these could help you save for retirement. They all have pros and cons and it depends on your likes and your lifestyle which you would go for.

For example, with online lending you can support UK businesses and help the economy grow as well as your nest egg.

Property is usually a good investment long-term, although there are a lot of costs involved in maintaining it and you’re never sure if the price will go up, particularly if you buy abroad. Gold and silver are good ‘safe havens’ when we go through economic uncertainty. It’s worth having some of that if you can do it.

Collections on the other hand can sometimes grow exponentially in value – some Lego sets go up by 1000’s of per cent over a few years. Collections can be very lucrative if you get it right, but it’s more of a gamble. Some people have managed to fund a new conservatory by selling their collection of designer clothes. Others have lived well by selling good art they invested in early. However, you can never know if a particular collection will keep its value. For example, right now posh dinner services which might have fetched thousands a few years ago are hard to shift, and beautifully carved, heavy wooden furniture can barely be given away. So collections should be used as an extra to your core investments only.

For more information

To find out more about the Funding Circle ISA visit fundingcircle.com/innovative-finance-isa.

By lending to businesses your capital is at risk. The tax-free entitlement of an ISA depends on your individual circumstances and may change. Not covered by the Financial Services Compensation Scheme.

The views expressed here belong to the author and do not represent those of Funding Circle. Funding Circle is not authorised to, and does not, provide investment, tax, legal or regulatory advice.

The information and views contained here are provided solely for informational purposes and should not be construed as legal, tax, regulatory, accounting or investment advice, or as a recommendation or an offer or invitation by Funding Circle.

To the extent permitted by law, Funding Circle does not accept any liability for any loss or damage which may arise directly or indirectly from the use of, or reliance on, such information contained here.

If you have any questions, please speak to your professional adviser or seek independent specialist advice.

ISAs – a complete guide

ISAs have had a shake up in the last few years, giving you more choice and potential rewards. To help you understand the options available, below you’ll find details on the different types of ISA, how they work and key points to be aware of. Always remember that tax rules depend on your individual circumstances and may change in the future.

What is an ISA?

ISA stands for Individual Savings Account. They allow you to earn interest on your savings or investments tax-free. The amount you can put into your ISA is capped for each tax year, for 2018/19 and 2019/20 it’s £20,000. This is called your ISA allowance.

You can choose to split your ISA allowance across different ISAs, or put it all in one. How you choose to do this can make a big difference to your earnings.

What types of ISA are there?

There is a variety of ISAs to suit different risk appetites and life stages. You can choose from a Cash ISA, Stocks & Shares ISA, Innovative Finance ISA (IFISA), Lifetime ISA (LISA) and Help to Buy ISA. There’s also a Junior ISA to help you save for the kids.

You can only pay into one of each type of ISA in any tax year. Each has different benefits, so it’s important to understand how they work.

Cash ISA

A Cash ISA works like a savings account, only all the interest you earn is completely tax-free. As with savings accounts, there’s a whole host of Cash ISA providers and options out there, such as instant access, fixed-rate or regular savers. Most are free to set up, but some may charge to withdraw.

Although you may earn a lower interest rate with a Cash ISA than a Stocks & Shares ISA or Innovative Finance ISA, they are very low risk. Your money is also protected by the Financial Services Compensation Scheme, which will compensate you up to £85,000 if you lose your money. However, if the interest rate offered is below inflation, you could be losing out in real terms.

Stocks & Shares ISA

You can also use an ISA to earn tax-free interest on investments. These Stocks & Shares ISAs will normally be managed using an app, online platform, broker or fund manager.

Your money could be invested in shares in public companies, bonds (essentially a loan to a company or government) or funds (a mixture of investments pooled together).

These types of investment can give you higher returns than you’d get with a Cash ISA, but they carry more risk. Although the interest is tax-free, your investment could go down as well as up.

There are often more fees associated with a Stocks & Shares ISA as well. Providers may charge you for opening an ISA, changing investments, withdrawing or transfering to another ISA provider.

Innovative Finance ISA

Innovative Finance ISAs allow you to earn tax-free interest by lending to people or businesses. There are a variety of online providers (often known as peer-to-peer lenders or lending platforms) that will focus on different groups. Some only lend to individuals, others to property developers, and some like Funding Circle that lend to small UK businesses.

As you’re lending your money, there’s a risk that the loans won’t be repaid. Providers mitigate this risk in different ways, such as spreading your funds across multiple loans.

As you’re lending your money, there’s a risk that the loans won’t be repaid. Providers mitigate this risk in different ways, such as spreading your funds across multiple loans.

Consequently, Innovative Finance ISAs typically sit somewhere between Cash ISAs and Stocks & Shares ISAs. They typically offer better returns than Cash ISAs and savings, but are more stable than playing the stock market.

With the Funding Circle ISA you could earn a projected return of 6-7% per year*. Find out more. Capital at risk.

Help to buy ISA

Help to buy ISAs are a type of Cash ISA made for first-time house buyers. You can save £1,200 in the first month, then £200 per month from then on. When you’re ready to buy your property, the Government will then add 25% as a bonus (up to £3,000).

As they are a type of Cash ISA, you can’t pay into both a Cash ISA and a Help to buy ISA in the same tax year. If you’ve opened your Cash ISA this year, you can transfer the funds to your Help to buy ISA. If you have more than £1,200 in there, you can transfer the rest elsewhere.

Lifetime ISA

Like the Help to buy ISA, a Lifetime ISA can help you at important life stages. It can also help you buy your first home, or you can keep it open and use it for retirement.

You can deposit up to £4,000 per year and get a 25% bonus from the state. The bonus is paid monthly (if you make a deposit that month), and once it’s in your account it counts as your money, so you can earn interest on it too. You have to be between 18-39 to open one, and you’ll get contributions up to the age of 50.

If, however, you take the money out for anything other than buying your first home or retirement, there is a penalty of 25%. That leaves you around 6% down overall. It sounds counterintuitive, but here’s an example to show how it works:

£4,000 + 25% = £5,000

£5,000 – 25% = £3,750

How can I use my ISA allowance?

The ISA allowance is set every year. It’s risen from £7,000 in 1999 to £20,000 in 2019. While there used to be rules on how you can split your ISA allowance, now there’s more freedom.

As mentioned above, there are limits to how much you can put in a Lifetime ISA or Help to buy ISA. Aside from that you can choose to spread your £20,000 however you’d like to. You can put it all in one ISA, or spread it among a few.

Remember, if you choose to spread it out, it’s your responsibility to make sure you don’t go over your £20,000 ISA allowance in total. Providers will usually make sure you don’t exceed the limit in any one account, but they won’t know what ISAs you have elsewhere.

Any interest also won’t count towards your personal savings allowance. This is another allowance which lets you earn £1,000 of interest on savings each year without paying tax (£500 for higher tax rate payers). So if you have a lot of savings earning interest, an ISA will help you keep more of it tax-free.  

How do I get my money out of an ISA?

The rules for taking money out of your ISA depend on the type and provider you have. There is no set time period you need to start enjoying the tax-free benefits. However, some products may have fees for withdrawing or closing your account early.

Unless you have a flexible ISA, once you’ve taken out funds you can’t put them back in.

What is a flexible ISA?

With a flexible ISA, you can take money out and replace it within the same tax year without it affecting your tax-free ISA allowance. Here’s some examples to show how it works:

Judy has a flexible ISA. She’s paid in £20,000 already this year, using her whole allowance. She takes out £10,000 to buy a car, but because she has a flexible ISA she can pay the £10,000 back in before the April 5th deadline.

John has a non-flexible ISA. He’s also paid in £20,000 this year. He takes out £8,000 to redo his kitchen, but he can’t pay in any more until the next tax year.

Tina also has a non-flexible ISA. She’s paid in £5,000 this year, leaving £15,000 of her allowance left. She takes out £2,000 for a family holiday, but can still only pay £15,000 back in.

Whether an ISA is flexible or not depends on which ISA you have. Cash ISAs, Innovative Finance ISAs and cash in a Stocks & Shares ISA can all be flexible, but it depends on the provider.

Help to buy ISAs, Lifetime ISAs and Junior ISAs are not flexible.

When is the deadline for using my ISA allowance?

You must use your ISA allowance by April 5th to get the tax benefit for that year. The allowance does not roll over, so you will lose it if you don’t take advantage. From April 6th onwards it will be a new tax year with a new ISA allowance that you can use. The previous year’s allowance, however, will be gone.

Who is eligible for an ISA?

To be eligible for an ISA, you must:

  • Be 16 or over (18 or over for Innovative Finance ISA and Stocks & Shares ISA)
  • Live in the UK
  • Have a national insurance number

You can only take out an ISA in your own name. Joint ISAs with a friend, partner or relative aren’t allowed.

Can I transfer ISAs?

You can transfer ISAs from both the current tax year and previous years to a new provider. Just like your bank account or household bills, switching providers can help you get the best rates.

When transferring ISAs there are two important points to remember:

1 – Don’t withdraw the money yourself – speak to the new provider about a transfer

Transferring an ISA is not as simple as withdrawing from your bank account and depositing somewhere new. If you withdraw the money yourself, you can lose your tax benefit. Instead, speak to your new provider and ask them for an ISA transfer form. Normally they will then arrange the transfer for you.

As mentioned above, Stocks & Shares ISAs often charge a fee for transfering, withdrawing or closing an ISA.

2 – You can only pay into one of each type of ISA in any tax year

If you want to transfer a ISA from the current tax year, you’ll have to move all of it to the new provider. However, for ISAs from previous years, you can either move them all into one or split them across several providers.

What is a Junior ISA?

If your child is under 16, you can open a Junior ISA (JISA) for them instead. They only get an allowance of £4,260 at the moment, but if you open one when they’re born they’ve got plenty of years to rack up interest. You have a choice of Cash or Stocks & Shares, and you can divide the allowance between the two.

Although it’s in their name, the ISA is opened and managed by you. They can take over when they reach 16, but they can’t touch the cash until 18. Once they turn 18 though it’s their money to do want they want with.

The Funding Circle ISA

The Funding Circle ISA is an Innovative Finance ISA. By using the simple online platform, you can quickly lend to hundreds of small UK businesses. They get the money to grow and create jobs, and you can earn interest as they pay you back each month.

You can earn a projected return of 6-7% per year*. It’s a flexible ISA, so you can take money out without losing your tax-free allowance, and you can transfer ISAs from other providers.

Find out more about the Funding Circle ISA here.

By lending to businesses your capital is at risk. Tax rules depend on your individual circumstances and may change. Not covered by the Financial Services Compensation Scheme.

*The rates shown are the annual projected returns, after fees and bad debts but before tax, that a diversified investor could earn with the Balanced lending option. Your actual return may be higher or lower than projected, for example due to the performance of the individual loans your funds are matched with, or a change in macroeconomic conditions.

The information and views contained here are provided solely for informational purposes and should not be construed as legal, tax, regulatory, accounting or investment advice, or as a recommendation or an offer or invitation by Funding Circle.

To the extent permitted by law, Funding Circle does not accept any liability for any loss or damage which may arise directly or indirectly from the use of, or reliance on, such information contained here. If you have any questions, please speak to your professional adviser or seek independent specialist advice.

What the budget means for you – Jasmine Birtles

If you were hanging on to Phillip Hammond’s every word on Monday 28th October, waiting to hear what changes he would be making for investors, you probably came away disappointed…or relieved.

Because frankly, this year’s Budget had remarkably little news for investors and savers.

In the main that was a good thing. In the run-up to the Budget analysts were widely predicting a raid of the pensions annual allowance and possibly a reduction in the ISA limits and changes to IHT exemptions. But no. Silence on all counts. It was largely a giveaway Budget with very little clawed back by the Chancellor – particularly for investors.

ISAs

For the tax year 2019/20 the annual ISA allowance remains at £20,000, and pension investors can still stash away £40,000. Neither are to be reduced which is a huge relief for anyone looking to build their retirement savings. Combining the two, which many investors do in order to make the most of their tax advantages, these allowances enable most people to invest in a nest egg tax-efficiently.

Also if you are an ISA investor who holds Alternative Investment Market (AIM) shares you can breathe a sigh of relief too. Since 2013, AIM shares have been allowed in ISAs, enabling ISA investors to create portfolios that are free of inheritance tax as well as income and capital gains tax. Investors will be glad not to have lost this in the last Budget.

There is also a positive move for parents investing for their children. The annual subscription limit for Junior ISAs for 2019-20 will be uprated in line with inflation to £4,368.

Income tax

The thresholds for income tax are also being tweaked. Continuing the government’s policy of the last few years, the personal tax free allowance is edging up, as is the higher rate tax threshold. Here’s what they’ll be for 2019/20:

Personal allowance – £12,500

Basic rate (20%) – £12,500-£50,000

Higher rate (40%) – £50,000-£150,000

Additional rate (45%) – £150,000+

For those earning over £100,000, the personal allowance works a bit differently. For every £2 over £100,000 that you earn, your personal allowance will be reduced by £1. So, if you earn £125,000 or more, you’ll have no personal allowance and will have to pay income tax on all of your earnings.

Stock market investing

There was little for stock market investors in this Budget, but some of the chancellor’s ideas will have an impact.

“Investors breathed a sigh of relief as the Chancellor maintained the status quo in terms of allowances,” says Moira O’Neill from Interactive Investor. “For example, over the years, chancellors have been fond of meddling with venture capital trusts and enterprise investment schemes, which grant investors appealing tax advantages for investing in early stage companies. But no sign of more with these regimes in this Budget.”

Last year there were unexpected cuts to the dividend tax allowance, which was reduced to £2,000, but the Chancellor did not wield the axe further this time. It was hoped that he might have reversed the cut this year and it was a shame that he didn’t, but at least it wasn’t increased.

The tax advantages of shares listed on the Alternative Investment Market (AIM), London’s junior market, were expected to be in the Chancellor’s line of fire, but also escaped.

Savings

In the ‘small print’ of the Budget announcement we heard a few bits of good news for savers.

For a start the minimum investment required to hold Premium Bonds will fall from £100 to just £25 by the end of next March, which will be welcomed by small savers and those who like to give Premium Bonds as a gift to children and grandchildren.

Also, the criteria for buying bonds as gifts for children under 16 will also be loosened going forward. The new rules say that aunts, uncles and family friends are now going to be allowed to gift bonds worth up to £50,000 per child. Currently they can only be bought by parents, grandparents and legal guardians. National Savings & Investments will release further details of these changes later.

Still on the subject of saving for children, a consultation on draft regulations for maturing Child Trust Fund accounts will be published next year, as announced in the Budget. These were launched in 2002, but were then superseded by Junior ISAs in 2011. The Budget also included news that the annual subscription limit for Child Trust Funds for 2019-20 will be uprated in line with consumer prices index to £4,368.

For more information

To find out more about the Funding Circle ISA visit fundingcircle.com/innovative-finance-isa.

By lending to businesses your capital is at risk. The tax-free entitlement of an ISA depends on your individual circumstances and may change.

The views expressed here belong to the author and do not represent those of Funding Circle. Funding Circle is not authorised to, and does not, provide investment, tax, legal or regulatory advice.

The information and views contained here are provided solely for informational purposes and should not be construed as legal, tax, regulatory, accounting or investment advice, or as a recommendation or an offer or invitation by Funding Circle.

To the extent permitted by law, Funding Circle does not accept any liability for any loss or damage which may arise directly or indirectly from the use of, or reliance on, such information contained here.

If you have any questions, please speak to your professional adviser or seek independent specialist advice.

Saving for university – by Jasmine Birtles

Jasmine Birtles is a TV and newspaper journalist and personal finance expert. In her new column she’ll be helping you get the most from your investment and reach your personal goals.  

Passing the exams is the easy part. It’s saving for university that really hurts!

It costs the best part of £45,000 to do a three-year degree in the UK right now. That’s set to go up to at least £60,000 in the next ten years. So it’s not surprising that some parents start saving for their children’s university as soon as, or even before, their children are born.

However, even if you don’t have serious spare cash to put aside for your offspring’s education, there are ways to maximize the money you put in. Follow these steps and you’ll be able to help your kids even with limited resources.

Make full use of the JISA

Obviously the more tax you can save on your investments the better, so use ISA allowances as much as possible when saving for university.

Each child has an annual JISA (Junior Individual Savings Account) limit of £4,250 per tax year until they turn 18. Even if you don’t have that much to put in each year, just investing regular, small amounts each month will mount up if you put it in the right products.

Happily, children have time on their side when it comes to investing. If you start when they’re babies they have a good 18 years for the investment to grow, so you can use a stocks and shares (equity) JISA for them. The returns on these products are much higher than you would get on the average bank or building society cash version. Simple index tracking funds tend to be the cheapest and often the best performing. Encourage the grandparents, friends and other family members to add to the pot at birthdays and Christmas.

Of course, the JISA is in your child’s name and it’s not certain that they will use it for university by the time they get their hands on it at age 18. But if you spend some time educating them in the value of saving and help them to respect money then, even if they don’t go to university, they will still know to put that cash into something sensible once they come of age.

Take out your own Innovative Finance ISA

You also can take out an ISA for yourself and you have an annual limit of £20,000 per tax year. There are a few ISAs to choose from now including the Innovative Finance ISA which enables you put money into an online lending platform, such as Funding Circle, within an ISA wrapper. So any gains you make with your lending come to you tax-free.

If you put your money into the Funding Circle ‘Balanced’ ISA, that has a projected return of 6-7%. Then a monthly deposit of just £170 at 6% annual return, would give you £66,000 in 18 years, and that doesn’t even use up your whole ISA allowance.

Beware of ‘specialist’ products

There are, of course, investment products specifically designed for parents looking to save for their child’s university costs. Some of these may do well but on the whole you should be suspicious of any financial product that has clearly been packaged up for, and advertised to, a particular market. These products often have high fees attached to them and tend to be more about the marketing than the market.

Some Friendly Societies offer specialist products like these but their fees tend to be high. Similarly, well-known investment firms offer specialist products that involve a choice of managed investment trusts that you could put your money into. Usually the minimum monthly investment is £25 or £250 one-off lump sum. Again, though, watch their fees as managed funds are generally more expensive than simple index-tracking funds.

Get the kids saving for university too

One of the best ways to help your kids cope financially when they get to university is to encourage them to earn and save while they are teenagers. They really need the help too, as research by the savings association TISA has found that three in five 14-16 year olds borrow money to pay for something, even though four in five of those surveyed receive pocket money and a third of them have a part time job.

So start by helping them get a Saturday job in a local tea shop, car wash or supermarket. Help them fill in application forms, take them to the interview and even contact potential employers yourself. Then help them set up their own savings accounts, showing them how their money can grow over time if they leave it there. If you have the money you could even promise to match any savings they accumulate once they get to university.

For more information

To find out more about the Funding Circle ISA visit fundingcircle.com/innovative-finance-isa.

Your actual return may be higher or lower and your capital is at risk. The tax-free entitlement of an ISA depends on your individual circumstances and may change.

The views expressed here belong to the author and do not represent those of Funding Circle. Funding Circle is not authorised to, and does not, provide investment, tax, legal or regulatory advice.

The information and views contained here are provided solely for informational purposes and should not be construed as legal, tax, regulatory, accounting or investment advice, or as a recommendation or an offer or invitation by Funding Circle.

To the extent permitted by law, Funding Circle does not accept any liability for any loss or damage which may arise directly or indirectly from the use of, or reliance on, such information contained here.

If you have any questions, please speak to your professional adviser or seek independent specialist advice.

Saving for a house – by Jasmine Birtles

Jasmine Birtles is a TV and newspaper journalist and personal finance expert. In her new column she’ll be helping you get the most from your investment and reach your personal goals.  

Whether you’re after a home of your own, or you want to help the kids get on the housing ladder, saving for a house can be a daunting prospect. Fortunately there are various things you can do to get the keys to that first home quicker than you thought.

Add to your savings

To get a mortgage you’ll need a deposit and that’s where people struggle. Stay focused and make some sacrifices and you can get there:

  • If your parents are able to have you, you could move in with them temporarily and put aside money you would have spent on rent and bills.
  • Cut your costs including going out, getting takeaways, spending on clothes and the like.
  • Switch all the bills you pay to get the cheapest monthly rate.
  • Check your old direct debits and cut subscriptions including magazines, gyms and unused apps.

Use every scheme going

There are a few Government schemes around specifically aimed at first-time buyers, so make the most of them.

Help to Buy

Help to Buy Shared Ownership works like the schemes run by Housing Associations. You get the chance to buy a share of your home (between 25% and 75% of the value) and then you pay rent on the remaining share. Later on, you could buy bigger shares or the whole lot once you can afford to.

The Help to Buy Equity Loan is a government scheme that helps buyers get a new build property in England. It’s set to run until 2020 and is available to homeowners looking to move as well as first time buyers, but only for new-build homes that are worth under £600,000. It gives an equity loan of up to 20% of the price of the house you want to buy and it means that you personally only need to put down a 5% deposit to get a good mortgage.

The Help to Buy ISA is a savings scheme where the government will top up your savings by 25% (up to £3,000). Your first payment to your ISA can be up to £1,200 and then you can pay up to £200 each month. When you buy your property, your lawyer will apply for the extra 25%. Happily you don’t have to pay it back.

Find out more about all three here.

Starter Home Scheme

In this scheme, 200,000 new build homes will be made available (soon!) to first-time buyers under 40 years old. At least 20% will be taken off the market price, costing no more than £250,000 outside London and £450,000 in London. There’s more here.

Get your parents to help

You’ll probably have had this conversation already, but if your parents or grandparents can help with the deposit it can be invaluable.

However, if they want to help but don’t have the money, they could still be a guarantor for you. There are several ‘guarantor mortgages’ on the market that allow parents, grandparents, or friends to help you buy a property without actually having to hand over any cash at the start. Ask a mortgage broker which lenders offer these.

Try Shared Ownership

…with a housing association

Shared Ownership is usually run by a housing association or council. You own part of a property and pay a small rent on the other part which is owned by the housing association or council.

Competition is high for a place on a housing association list so get in as soon as you can. You can only be on it if your household income is less than £80,000 per year outside of London or less than £90,000 per year inside London. You can find out more here.

…with a friend

Consider doing your own, private ‘shared ownership’ scheme where you buy with a friend or partner. It’s a bit risky but so long as you know that you can get on with the other person, and you have watertight contracts in place, then it can work.

Make extra cash

Aim to make at least an extra £100 a month with a side-earner. You could be  a film extra, do focus groups or babysitting, make cakes to sell, mend computers and more, depending on your skills and time. See the Make Money section on my website, MoneyMagpie.com for more ideas.

The views expressed here belong to the author and do not represent those of Funding Circle. Funding Circle is not authorised to, and does not, provide investment, tax, legal or regulatory advice.

The information and views contained here are provided solely for informational purposes and should not be construed as legal, tax, regulatory, accounting or investment advice, or as a recommendation or an offer or invitation by Funding Circle.

To the extent permitted by law, Funding Circle does not accept any liability for any loss or damage which may arise directly or indirectly from the use of, or reliance on, such information contained here.

If you have any questions, please speak to your professional adviser or seek independent specialist advice.