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Family Finance.

Byline: By TONY HETHERINGTON

Q: It makes me angry to see everyone with a mortgage now paying tiny interest on their home loans, while savers like me suffer as our interest drops to almost nothing.

I have a fixed rate bond that matures shortly. It has been paying 6.50 per cent interest. I do not suppose I shall get anything like this, but what is the best account you can suggest? I already have the maximum in a tax-free Isa. KE

A: Savers have certainly lost out in the credit cr unch, while some mortgages linked to base rate are now virtually interest-free.

I am afraid you will not get 6.50% from a decent, safe bank at present.

The best yield I can find is 3.90 % cent from ICICI Bank's HiSave fixed rate savings account. This is a one-year investment on pounds 1,000 upwards.

ICICI Bank (0808 131 4151) is foreign-owned but is fully licensed by the Financial Services Authority so your money is protected by the official compensation scheme up to pounds 50,000.

Q: We are going to Spain at Easter, and as you will know, the pound does not buy as many euros as it did last year. Is it better to buy euros in advance or pay in Spain by credit card? Mrs FJ

A: The pound has clawed back some of its losses, and as I write, holidaymakers can get about 1.10 or 1.11 euros for their pound.

Will you get more by Easter? My guess is yes - but nobody has a crystal ball!

Should you use a credit card in Spain? The answer depends on which card you have. Most charge a foreign currency loading fee of about 2.75%, with interest on top, and another couple of percent if you draw cash.

A few card issuers, including Nationwide, the Post Office, Thomas Cook and Abbey have cards with no such loading, and Abbey's Zero Mastercard does not even charge a cash withdrawal fee.

Q: My husband is a self employed builder. If he employs me to do his paperwork, can he pay me enough to use up my tax allowances, and then deduct my pay from his profits and so reduce his own tax bill? I have no taxable income. Mrs NM

A: The simple answer is yes. Like everyone else, you can earn pounds 6,035 a year before paying a penny in income tax. And as an employee, you can earn up to pounds 90 a week before paying national insurance.

Whatever your husband pays you will be deducted from the pre-tax profits of his building business. But be prepared for questions.

The tax man is used to seeing husbands employ their wife to cut their tax bill, and you may well be asked exactly what work you carry out, and how many hours a week it takes you, so keep records.

Q: Do you know what happened to the Cavendish Insurance Company, please? Mrs DG

A: Cavendish is now part of Royal & Sun Alliance. If you have an old policy, write to RSA at 1 Leadenhall Street, London EC3V 1PP (0207 283 9 000).
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Title Annotation:Features
Publication:Huddersfield Daily Examiner (Huddersfield, England)
Date:Feb 11, 2009
Words:530
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