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Q&A; Your money queries are answered by PETER RUTHERFORD, senior director of Rutherford Wilkinson Ltd, chartered financial planners.


QI have seen advertising for checking your credit score. Should I be looking at this and what advantage is there to me? A Credit scoring works by awarding points based on certain information and looks at your income, credit history, such as what loans you have had before and whether or not you made the repayments on time, how long you have lived at your current address, etc.

It is relevant if you are looking for a loan or a mortgage and you need to reach the lender's pass mark. By checking your credit report you can see whether or not you have a good one or one that is impaired. If you feel it is impaired and that it is unfairly so then you could take up the matter with the credit reference agency and seek to resolve the cause of the impairment. A good credit score is important if you wish to borrow money.

Q I am pregnant with my first child. I intend taking maternity leave from my employer but I would also like to know if I am entitled to any benefits from the state. Is this likely? A You will be entitled to benefits but as to which ones and to what extent depends upon your position. There is the potential to benefit from Child Benefit, Child Tax Credit, Income Support, Housing Benefit, Council Tax Benefit, Healthy Start Vouchers and other benefits such as free vitamins and prescriptions, eye tests etc.

You will need to make inquiries and you will find quite a bit of information from the Money Advice Service which is Government-sponsored on Q I am getting close to retirement and am thinking about my options for taking income. I am interested in a 'with-profits annuity' as this seems to give me higher income than an ordinary annuity and with the possibility of some growth. I would appreciate your comments.

A An ordinary annuity is like that old advert, "it does exactly what it says on the tin". In other words, you will get your payments when they are due at the amount stated. A with-profits annuity relies on bonuses that are added to your income. However, if the insurance company does not make a declaration of bonus that is sufficient to support the level of income you have chosen, then your income will fall, albeit by a small amount.

However, if the bonus rate announced is higher than the one you have chosen then your income will rise. You will need to consider whether or not you wish to take the risk of some fluctuation in the income and also it is crucial that the company you invest with is financially strong. It should also ideally offer a floor beyond which the annuity payment cannot fall. Also the option to switch from with-profits annuity to a guaranteed annuity would be preferred.

You really need to discuss this with an independent financial adviser who can describe the pros and the cons to you and also advise on which companies provide you with the most protection.

? To request a free Investor's Guide, and with any questions you would like answered, please contact me at Rutherford Wilkinson Ltd, Northumbria House, 21-23, NE13 6DS. Website Telephone 0191 217 3340 or email Rutherford Wilkinson Ltd is authorised and regulated by the Financial Services Authority.
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Publication:The Journal (Newcastle, England)
Date:Jun 11, 2011
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