Personal finance queries answered

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I have pounds 50,000 in a Northern Rock Postal 60 account, but I've noticed I can get a higher rate elsewhere. Would withdrawing this money affect the value of the bonus shares I will get when the society converts into a bank? I also have a Northern Rock Tessa and, jointly, a Go-Direct account.

MR, Cambridge

Be very careful. The society has yet to give details of its share handout. In particular it has not said whether savers who touch their money now will affect their windfall eligibility.

A balance of pounds 50,000 in the Postal 60 account could be valuable in windfall terms. Assume the building society's conversion to a bank takes place as planned next autumn. How much are you losing by keeping your money where it is for another year? Each extra 0.5 per cent interest you could get on your pounds 50,000 elsewhere would be worth pounds 250 if you're a non-taxpayer, pounds 200 if you're a 20 per cent or basic-rate taxpayer, and pounds 150 if you're a higher-rate taxpayer. But the conversion windfall may well be worth more than the extra interest you could earn by moving.

Savers will get a better idea of what they stand to gain (or potentially lose) when the society publishes its transfer document early next year. This will give details of the conversion proposal.

The free shares distribution is likely to consist of a basic number and then an additional hand-out related to the size of larger savers' balances. But the degree of skewing is anyone's guess.

Without exact details of your Tessa account, it is probable that this account on its own will entitle you to the basic payout. However, any balance-related payout will be based on the aggregate of balances in all your qualifying accounts.

But while it might prove unwise to take your Postal 60 savings out of the Northern Rock, you should consider switching this money to the society's Great North Postal account. Such a switch will not affect your entitlement on conversion, says the Northern Rock, but you must get advice from the society on how to do it. In particular, you must make it clear that you are transferring funds from an existing qualifying account.

Great North Postal is an instant access postal account with a penalty. The account cites an interest rate of 5.85 per cent gross on pounds 50,000, but all withdrawals are subject to 30 days' loss of interest. By contrast, Postal 60 pays 3.85 per cent gross on pounds 50,000 (or 3.78 per cent if you receive interest monthly).

Over a year and if interest rates remain the same, the switch would earn you pounds 800 extra after basic-rate tax. If you then wanted to close the account, the 30-day interest rate penalty would cost you around pounds 192 on the pounds 50,000.

Northern Rock's members' information line can be reached by calling - 0345 448866.

About 20 years ago I bought 50 krugerrands through Lloyds Bank. I now want to sell them, but Lloyds no longer buys and sells gold coins. Can you give me any advice?

PL, Surrey

Try the British Numismatic Trade Association. Send a first class stamp to get a free directory of members, showing what each trades in. Write to BNTA, PO Box 474A, Thames Ditton, Surrey, KT7 OWJ or phone 0181-398 4290.

The exact price you get changes all the time and depends on how many coins you have to sell. One BNTA member, Spink & Son, says that on Wednesday (2 October 1996) you could have received pounds 11,900 for your 50 krugerrands (pounds 238 a coin). Spink & Son will give its current price to callers on 0171- 930 7888. Its address is 5-7 King St, St James, London SW1Y 6QS.

I enjoyed your recent article about unusual insurance policies. You mentioned a firm called Grip, but I cannot get a number from directory inquiries. Can you give me details?

MV, London

Grip stands for Goodfellow Rebecca Ingrains Pearson Ltd, a broker whose bread-and-butter business is redundancy and disability insurance.

The firm also offers what can only be described as a range of wacky policies. pounds 25 will buy an "erection all-risks" policy. It gives pounds 100,000 worth of cover and is thought to be attractive to women fearful of penile failure in their male partners. A different policy allows prostitutes to get insured against backache and headache.

The firm insists it has customers for its off-the-wall policies. But, as with all insurance, anyone tempted to buy an unusual type of policy should read the small print very carefully. Find out exactly what the payout is and the precise circumstances in which you can claim.

Grip's phone number is 0171-929 5198 and the address is 150 Minories, London EC3N 1LS.

q Write to Steve Lodge, personal finance editor, Independent on Sunday, 1 Canada Square, Canary Wharf, London E14 5DL, and include a telephone number. Do not enclose SAEs or documents that you wish to be returned. We cannot give personal replies and cannot guarantee to answer every letter. We accept no legal responsibility for advice.

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