Your Money: Readers Lives

Savings accounts ... buildings insurance ... the widow's allowance. Your everyday financial queries answered

I have some savings with Nottingham building society. Until last January they were in the society's Post Direct account. Then I discovered its Post Mark account was paying a better rate of interest and switched to that. Recently I found out that its Direct Reserve account was even better and switched again. All that seems to happen when I switch accounts to restore a proper interest rate is that a new sticker is put on my savings book. Isn't the society simply relying on the inertia of often elderly investors to cheat them of their expected interest rates?

DP, Surrey

It's a common complaint, but you may be being little unfair in this case. The simple advice for all savers is to keep up to date with the rate of interest their money is earning - and see how it compares with other accounts. A justifiable charge against many societies is that they launch competitive accounts to attract new savers while paring away the interest on older accounts that are no longer marketed. In the industry these old accounts are referred to as closed or obsolete.

The Nottingham, however, denies it plays this game. It says it has accounts that may be temporarily not available but they are not obsolete. The society opens accounts, closes them when it has pulled in enough money, then reopens them when it wants more money. This practice is adopted by some other societies.

The three accounts you have had do indeed pay different rates. Post Direct pays 3.95 per cent gross, Post Mark 5 per cent and Direct Reserve 6.1 per cent on balances of pounds 2,500. Importantly, though, the first is an instant access account; the second requires seven days' notice of withdrawals and the third requires 20 days.

As a general rule, the more notice you have to give for withdrawals, the higher the rate of interest. And all three postal accounts pay more than their branch-based equivalents. Accounts run by post have lower admin costs and they invariably dominate best buy tables.

In fact Direct Reserve is a brand new account launched in September. You became aware of it fairly soon after launch and switched into it. But it is not always easy to keep abreast of the current top rates. A number of societies, including Nottingham, run interest rate hotlines. Do get into the habit of using them on a regular basis, and compare rates with what you see in the Independent on Sunday's own table of Best Savings Rates (see right).

In the past I usually paid my buildings insurance premium as the renewal notice arrived. This year, I decided to get some other quotes. Norwich Union (via the AA) gave pounds 116, Sun Alliance quoted pounds 269 but Saga quoted pounds 335. Saga is supposed to offer good deals for the over-50s. It tells me it is competitive and secure. But is it exploiting people who maybe do not shop around?

RT, Surrey

Saga says it is competitive and cites house contents insurance (not the same as buildings) as an example. The average premium paid by its customers is pounds 70, compared with a market average of pounds 110. But it acknowledges that it won't be cheapest for everyone. Insurers set their premiums according to their own claims experience in different postcodes. They would always advise people to shop around.

Many insurers offer "special" deals - to those in certain occupations, those who have fitted extra security, those over a certain age and so on. But don't assume that you're getting the best deal on the market just because you fall into a particular category.

In fact, there has rarely been a better time to shop around for buildings insurance. Insurance goes in cycles. There are currently too many insurers chasing the same business. This is helping to keep premiums down, so it is a buyers' market.

But beware of buying on price alone. Find out, for example, exactly what cover you get for fences and garden walls, a garden shed or even a swimming pool (assuming you have one). Check the excesses that you have to pay on any claim. Find out what alternative accommodation cover you get. This pays out if you can't live in your own home because of, for example, a fire. And make sure you are insuring for the correct figure -what it would cost to rebuild your home from scratch. The Association of British Insurers (0171 600 3333) publishes a free leaflet on how to work this out.

Arguably those most at risk of paying over the odds for buildings insurance are home owners who automatically buy the policy offered by their mortgage lender without shopping round.

My husband died in September 1993. Shouldn't I be entitled to an extra tax allowance of pounds 1,790?

AW, Manchester

You may well be entitled to what's called the widow's bereavement allowance in both the 1993-4 and 1994-5 tax years. The allowance runs for two tax years unless you get married again during that time. Benefiting from the allowance also assumes you had enough taxable income to make use of it during those tax years.

Put in a claim to your tax office, as claims can be backdated by up to six years. If you're not sure which tax office deals with your affairs, contact any Tax Enquiry Centre listed under Inland Revenue in the phone book.

The allowance was worth pounds 1,720 in 1993-4 and the tax saving depended on your top rate of tax. It was worth pounds 430 to a basic-rate taxpayer. In 1994-5 the tax saving was restricted to 20p in the pound for everyone, making it worth pounds 344.

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.

Suggested Topics
Voices
voicesGood for Lana Del Rey for helping kill that myth, writes Grace Dent
Sport
The Pipes and Drums of The Scottish Regiments perform during the Opening Ceremony for the Glasgow 2014 Commonwealth Games at Celtic Park on July 23, 2014 in Glasgow, Scotland.
Commonwealth GamesThe actor encouraged the one billion viewers of the event to donate to the children's charity
Sport
Karen Dunbar performs
Entertainers showcase local wit, talent and irrepressible spirit
Arts and Entertainment
The Tour de France peloton rides over a bridge on the Grinton Moor, Yorkshire, earlier this month
film
PROMOTED VIDEO
Life and Style
fashion Designs are part of feminist art project by a British student
News
Very tasty: Vladimir Putin dining alone, perhaps sensibly
news
Life and Style
Listen here: Apple EarPods offer an alternative
techAre custom, 3D printed earbuds the solution?
News
The University of California study monitored the reaction of 36 dogs
sciencePets' range of emotions revealed
Arts and Entertainment
The nomination of 'The Wake' by Paul Kingsnorth has caused a stir
books
News
Joining forces: young British men feature in an Isis video in which they urge Islamists in the West to join them in Iraq and Syria
newsWill the young Britons fighting in Syria be allowed to return home and resume their lives?
News
Snoop Dogg pictured at The Hollywood Reporter Nominees' Night in February, 2013
people... says Snoop Dogg
News
ebookA unique anthology of reporting and analysis of a crucial period of history
News
i100
Life and Style
food + drinkZebra meat is exotic and lean - but does it taste good?
News
Bey can do it: Beyoncé re-enacts Rosie the Riveter's pose
newsRosie the Riveter started out as an American wartime poster girl and has become a feminist pin-up. With Beyoncé channeling her look, Gillian Orr tells her story
Life and Style
Donna and Paul Wheatley at their wedding
healthShould emergency hospital weddings be made easier for the terminally ill?
Arts and Entertainment
Residents of Derby Road in Southampton oppose filming of Channel 4 documentary Immigration Street in their community
tv
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

PMO Analyst - London - Banking - £350 - £400

£350 - £400 per day: Orgtel: PMO Analyst - Banking - London - £350 -£400 per d...

Cost Reporting-MI Packs-Edinburgh-Bank-£350/day

£300 - £350 per day + competitive: Orgtel: Cost Reporting Manager - MI Packs -...

Insight Analyst – Permanent – Up to £40k – North London

£35000 - £40000 Per Annum plus 23 days holiday and pension scheme: Clearwater ...

Test Lead - London - Investment Banking

£475 - £525 per day: Orgtel: Test Lead, London, Investment Banking, Technical ...

Day In a Page

Screwing your way to the top? Good for Lana Del Rey for helping kill that myth

Screwing your way to the top?

Good for Lana Del Rey for helping kill that myth, says Grace Dent
Will the young Britons fighting in Syria be allowed to return home and resume their lives?

Will Britons fighting in Syria be able to resume their lives?

Tony Blair's Terrorism Act 2006 has made it an offence to take part in military action abroad with a "political, ideological, religious or racial motive"
Beyoncé poses as Rosie the Riveter, the wartime poster girl who became a feminist pin-up

Beyoncé poses as Rosie the Riveter

The wartime poster girl became the ultimate American symbol of female empowerment
The quest to find the perfect pair of earphones: Are custom, 3D printed earbuds the solution?

The quest to find the perfect pair of earphones

Earphones don't fit properly, offer mediocre audio quality and can even be painful. So the quest to design the perfect pair is music to Seth Stevenson's ears
Climate change threatens to make the antarctic fur seal extinct

Take a good look while you can

How climate change could wipe out this seal
Should emergency hospital weddings be made easier for the terminally ill?

Farewell, my lovely

Should emergency hospital weddings be made easier?
Man Booker Prize 2014 longlist: Crowdfunded novel nominated for first time

Crowdfunded novel nominated for Booker Prize

Paul Kingsnorth's 'The Wake' is in contention for the prestigious award
Vladimir Putin employs a full-time food taster to ensure his meals aren't poisoned

Vladimir Putin employs a full-time food taster

John Walsh salutes those brave souls who have, throughout history, put their knives on the line
Tour de France effect brings Hollywood blockbusters to Yorkshire

Tour de France effect brings Hollywood blockbusters to Yorkshire

A $25m thriller starring Sam Worthington to be made in God's Own Country
Will The Minerva Project - the first 'elite' American university to be launched in a century - change the face of higher learning?

Will The Minerva Project change the face of higher learning?

The university has no lecture halls, no debating societies, no sports teams and no fraternities. Instead, the 33 students who have made the cut at Minerva, will travel the world and change the face of higher learning
The 10 best pedicure products

Feet treat: 10 best pedicure products

Bags packed and all prepped for holidays, but feet in a state? Get them flip-flop-ready with our pick of the items for a DIY treatment
Noel Fielding's 'Luxury Comedy': A land of the outright bizarre

Noel Fielding's 'Luxury Comedy'

A land of the outright bizarre
What are the worst 'Word Crimes'?

What are the worst 'Word Crimes'?

‘Weird Al’ Yankovic's latest video is an ode to good grammar. But what do The Independent’s experts think he’s missed out?
Can Secret Cinema sell 80,000 'Back to the Future' tickets?

The worst kept secret in cinema

A cult movie event aims to immerse audiences of 80,000 in ‘Back to the Future’. But has it lost its magic?
Facebook: The new hatched, matched and dispatched

The new hatched, matched and dispatched

Family events used to be marked in the personal columns. But now Facebook has usurped the ‘Births, Deaths and Marriages’ announcements