READERS' LIVES: How do I get rid of my fistful of dollars?

Changing foreign cheques into sterling ... 'privileged membership' schemes ... boosting pension income. Your queries answered
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As a freelance illustrator, I sometimes get work from the US and get paid by cheque in dollars. To cash the cheque in sterling I have been quoted a cost of up to around pounds 10. Having a dollar account also seems costly. Is there a better way of getting my money? AP, Brighton

Forget the banks and other even more extortionate high-street cheque- cashing operations. As well as their admin charges you'll probably get stung by a poor exchange rate.

A much better deal is on offer from Rothschild Asset Management, a big City investment company, through its Channel Islands subsidiary (01481 719700). Its Money Funds will accept cheques in a range of foreign currencies, payable to you or Rothschild. If payable to you, you will need to endorse them on the back (write: "Please pay to Rothschild Asset Management (CI) Ltd" and then sign). There is no charge for accepting cheques nor for becoming a Money Funds customer. You can either hold the funds on deposit in dollars - earning reasonable interest rates - or switch them into pounds at no specific cost and at a keener exchange rate than you'll find in any bank. Once in the sterling fund, the money can be transferred to a normal UK bank account in three days, again at no cost and so allowing you to get your hands on the folding stuff.

West Bromwich building society has sent me details of its "Privileged Membership" scheme. The scheme seems to be a gimmicky bit of puffery. Why can't the society just concentrate on its core mortgage and savings products? And why can't it restore its competitive Tessa rate?

WC, London

West Bromwich is the latest building society trying to justify its mutual status rather than pay a windfall. It wants to promote the benefits of being a mutual organisation over those of being a bank owned by shareholders who would have to be paid a dividend.

The new Privileged Membership package may or may not have substance. Full details will not be known until November. Certainly, the immediate benefit of pounds 3,000 worth of "free" personal accident insurance is no big deal. It simply means that pounds 3,000 will go to your heirs if you die accidentally. More attractive, for those wanting a personal loan, is the promised 1 per cent off the society's standard rate from an APR (annual percentage rate) of 13.9 to 12.9 per cent. By contrast, its Visa card "with gold card benefits" has a fairly unremarkable APR of 19.9 per cent.

Other offered goodies such as "low cost" travel insurance and "discounts on household name products and services" will need to be compared with what these things cost from other sources. The danger with all loyalty schemes is that people tend to accept without question that a deal really is in some way special. They lose their critical faculties and fail to shop around.

As you suggest, what really counts are the society's core areas of savings and mortgages. West Bromwich has announced that its standard variable mortgage rate will be reduced by 0.25 per cent from 1 December and that savings rates will rise by an average of 0.25 per cent from the same date (notwithstanding any general change in interest rates). So you'll have to wait and see then whether the society features in the Best Buy tables. But the sentiments you express are no doubt widely held. Forget all the gimmicks. If mutuals are all they claim to be, they should have no trouble dominating the tables.

My 74-year old mother has sold her house and moved into rented accommodation with a warden on site. After the sale she has been left with pounds 48,000. She has no other savings. What is the best way for her to increase her income to boost her widow's pension? JE, Berkshire

There is no straightforward answer. Where your mother invests her money depends on all her circumstances and plans and on how big her current widow's pension is. An important factor in your mother's case is her state of health. Does her admission to warden-assisted accommodation mean that she is in poor health? Or does she come from a family where people tend to live to a ripe old age?

Your mother should consider getting independent financial advice. The rules designed to protect investors require financial advisers to find out all the relevant information. The chances are that Tessas, monthly income savings accounts, guaranteed income bonds, gilts, corporate bond Peps and (possibly in a few years' time) an annuity are suitable.

What she should avoid are complicated investments and investments linked to life insurance policies that pay a high commission to a financial adviser. She can get a list of local advisers from IFA Promotion on 0117 971 1177 and, if she wants fee-based rather than commission-based advice, she can use the free Money Management service on 0117 976 9444.

Write to Steve Lodge, Personal Finance Editor, Independent on Sunday, 1 Canada Square, Canary Wharf, London E14 5DL, and include a phone number. Alternatively, fax 0171-293 2096 or e-mail s.lodge@ independent.co.uk. Do not enclose SAEs or any documents you wish to be returned. We cannot give personal replies or guarantee to answer every letter. We accept no legal responsibility for any advice given.

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