Each week we choose up to five questions for our panel of experts to answer – and publish the results on the FMWF site. Unfortunately we are unable to answer all the questions we receive or send personal replies.

To increase your chances of being chosen, please write your question carefully in simple, concise English and include any facts and figures that you feel will help us fully understand your situation.

Email: women@financialmail.co.uk 

Where can I find affordable travel insurance for my elderly mother?

I would love to take my elderly parents on holiday to the South of France for their 50th wedding anniversary, but my mother suffers from emphysema.  I am really struggling to find affordable travel insurance – quotes tend to be around the £400 for ten days mark.  Can you recommend a specialist insurer who might be able to provide a good policy that is a little cheaper? Kim, Surrey

Lesley Collins from Edinburgh based investment consultants Independent Women replied: ‘There are a number of insurers who do specialise in this, such as Pulse and World First; however, your best option would probably be to contact a general insurance adviser who would be able to obtain quotes from a number of insurers and help you select the most suitable provider.’

Who do I need to tell if I let out a room in my house?

I am really struggling to make ends meet financially and I am considering letting out my spare bedroom to help pay the mortgage.  I am 30 and work full time.  Do I need to notify my mortgage lender of this intention and is it simply a case of filling in a self-assessment form at the end of the tax year to declare this extra income? Ayisha, Maidenhead.

Lesley Collins from Edinburgh based investment consultants Independent Women replied: ‘You will only need to pay income tax on the income you receive from renting out your spare room if this exceeds £4,250 per annum.  If you do receive more than this, you will need to declare the income on a self assessment following the end of the tax year.  While you continue to occupy the property, you do not need to inform your lender of your intention to let out one of your rooms.

Am I saving enough for my old age?

I am 50 year old mother of three who gave up working 15 years ago to raise my family.  While my husband has a pension, I am seriously worried about my own.  I stopped paying into my personal pension when years ago and only have around £8,000 saved for my old age.  I am hoping to start working again soon but would only have around £50 per month spare to invest in a pension, is this enough or should I be worried? Jane, Cardiff.

Lesley Collins from Edinburgh based investment consultants Independent Women replied: ‘It’s important to bear in mind your goals and priorities when you are considering long term saving.  As well as your own retirement provision, you will also probably have built up some entitlement to the State Pension and you may want to contact The Pension Service for a forecast. 

‘Once you have a forecast, you should consider how much additional pension you feel that you will require to be comfortable in retirement, bearing in mind your husband’s provision. 

‘That should then be the deciding point to how much more you invest.  With current annuity rates, your current pension fund will provide an annual income of nearly £1,200 when you reach 65 (I have used a number of assumptions, including future investment growth, none of which are guaranteed so the actual income could be higher or lower than this).

‘Even after deciding how much income you need in retirement, this should be balanced with your other needs.  If you cannot afford more than £50 per month, the main thing is that you are doing what you can and this will make a difference even if you do subsequently need to reassess your retirement goals. 

Lesley Collins is CEO of Edinburgh investment consultants Independent Women

www.independentwomen.co.uk

The development of e-book versions of popular, as well as classical, texts has meant an author’s entire bibliography is at the very fingertips of their readers.

During the second quarter of 2010, Amazon reported 140 e-book sales for every 100 hardback book sales.

Over 2m free books were available for download as of August 2009 and the number is growing as more and more publishers respond to the demands of e-readers.

No matter whether from the glossy screen of an iPad or the yellowed pages of a second hand book, a best seller is a best seller and the author behind it is still cashing in.

We spent £1.752bn on books last year, but who got the biggest slice of the literary pie? Forbes’ list of the top 10 highest earning authors of last year reveals the secrets behind the success stories:

1. James Patterson

In at number one with 51 New York best sellers under his belt, and an estimated fortune of $70m in his bank account, is James Patterson. Creator of American forensic psychologist supersleuth Alex Cross, Patterson churns out at least two novels a year to keep his readers hooked.

Despite being a computer-phobe and writing all his novels out by hand, the man is even a rip-roaring success in the cyberworld of e-books with I, Alex Cross alone having sold 160,000 units digitally.

His repertoire includes a range of comedies, romances, thrillers and non-fiction titles and he is still going strong with a recent $100m deal for another 17 books.

2. Stephenie Meyer

This lucky lady managed to rack up $40m last year, even though she didn’t write or release a single book.

Since 2005 her vampire romance series Twilight has sold over 100m copies worldwide and been translated into 37 different languages, earning herself a dedicated following and a lucrative film deal with Summit Entertainment.

Before writing the series, Meyer had not so much as written a short story and despite her popularity, some are sceptical of her technical ability as a writer.

Stephen King, who is definitely not a fan, famously declared that ’she can’t write worth a darn’ but she’s in at number two anyway.

3. Stephen King

The godfather of American contemporary horror, suspense and science fiction takes the number three spot having amassed $34m in 2009.

Despite having battled with severe addictions to alcohol, drugs and prescription medicines, King remains one of the most respected story tellers of our time.

With over 80 book-to-screen translations based on his work, King has achieved truly global recognition, particularly with such favourites as The Shawshank Redemption, The Shining and Carrie.

Aside from this he contributes regularly to journals and magazines, and was awarded the Medal for Outstanding Contribution to American Letters in 2003.

As a child his creative (and entrepreneurial) streak was evident as it was discovered that he had been selling his stories to friends and doing nicely out of it – until teachers forced him to return the profits.

4. Danielle Steel

Holder of the impressive accolade of eighth best-selling writer of all time and queen of the romance genre, Danielle Steel has made it onto the list at number four.

Steel earned herself just over $32m last year, including a $1m settlement from a former employee caught embezzling her estate.

Astoundingly, her novels have been on the New York bestseller list for over 390 consecutive weeks and at least 20 of them have been adapted for television. Despite some criticism for ‘formulaic’ storylines, many readers respect her resolution to tackle difficult topics such as incest and suicide.

Recently she has declared that all 71 of her titles will be released in e-book format and is set to break more records in e-book downloads.

5. Ken Follett

The first Brit on the list and a formidable literary force having generated $20m last year. His historical novels and thrillers have sold more than 100m copies worldwide and four of them have made it to the top of the New York best sellers list.

Follett made his debut in 1978 with Eye of the Needle – his fastidiously researched and immensely popular World War II spy thriller, gaining him critical acclaim. He has continued to grow in popularity.

Novels tend to be based in the places he spends the majority of his time, and with properties in Salisbury, London, Antigua and South Africa he is rarely short on inspiration.

Those far flung locations became particularly important for the Folletts when his wife, former MP Barbara Follett, was uncovered as one of the worst offenders in the recent expenses scandal.

6. Dean Koontz

Annual earnings of $18m and 44 New York best sellers give Koontz the number six spot.

His novels include elements of science fiction, horror, thriller and suspense and he is widely accepted as ‘America’s most popular suspense novelist’ (Rolling Stone).

Initially nervous, Koontz wrote under an array of pen names until, after thirty-five novels, he made his first accredited breakthrough in 1980 with Whispers. An ardent dog-lover, one of his early pseudonyms was inspired by his first dog Trixy Koontz and his novels have continued to feature a variety of heroic canines.

With over 16 book-to-film translations and having published at least one book a year for the last 42 years, he shows no signs of slipping off the radar.

7. Janet Evanovich

Despite selling over 20m titles annually, Evanovich is only at number seven on this year’s list because of a failed deal with her publisher.

Having said that, bringing in $16m and achieving best sellers with all 16 of the titles in her romance series is not bad going for a woman who started writing in her 40s.

Evanovich is a slave to her trade and reportedly works for eight hours every day and an additional four hours a day at weekends. Her fans are treated to regular book signings and after book three of the Plum series, all titles have been selected from fan submissions.

The heroine of her romantic adventure novels, Stephanie Plum, is reportedly being to be brought to the silver screen later this year with actresses Reece Witherspoon and Katherine Heigl in the frame for the role.

8. John Grisham

This former lawyer did not stray far from his academic background and made over $15m last year from his legal thrillers.

His fictional novels have gripped readers since 1989 and over 16 films have been based around his courtroom dramas. After witnessing a horrendous rape case involving a young girl, Grisham began to wonder what would have happened if the girl’s father had murdered her attackers.

The lawyer spent three years getting up at 5am to write A Time to Kill before work, only to have it rejected.

After giving up his legal career to pursue his passion for writing he went on to sell well over 250m novels worldwide, making his publishers Wynwood Press very glad they took a gamble on his abilities.

9. Nicholas Sparks

Critically acclaimed screenwriter and author of several international best sellers, Sparks just makes it onto the list. Last year he is estimated to have earned $14m and with two books in the process of being made into films, he looks set to climb.

Six of his novels have already been made into successful screenplays with the most popular, The Notebook, having become something of a modern day classic. Sparks began his career back in 1985 whilst still at school, but was failed in his attempts to get published.

His back up plan to get into law school was equally unsuccessful and he then attempted careers in real estate, table waiting, selling dental products by phone and starting his own manufacturing business.

Luckily for his adoring fans, he persevered with his writing and got his break in 1996 with The Notebook.

10. J.K. Rowling

Having famously conceived the idea for the Harry Potter series on a train from Manchester to London in 1990, Rowling has gone on to become one of the most respected children’s authors of our time.

The Potter books have gained worldwide recognition and sold a staggering 400m copies, and counting. Originally Joanne, her publisher Bloomsbury suggested she adopted the ambiguous initials ‘J.K.’ after concerns that she would be unsuccessful as a female author of teenage male fiction.

The success of the books with adults and children of both sexes, led to the inevitable success of the film translations and has made Rowling into one of the wealthiest and most influential celebrities in Britain.

Thousands of travelers every year arrive in a foreign country only to find their bank card is frozen when they try to use it because of suspected fraud. And it will almost certainly happen to anyone visiting two or three different countries.

Even if your child informs their bank of exactly where they will be visiting, the account could be frozen anyway, as banks’ computer systems will automatically stop transactions. This can be a real headache if they are in the middle of nowhere.

Make sure your child has a mobile phone and they buy local SIM cards if they are intending to spend prolonged periods of time in any countries. Ensure their bank has their mobile number, as some will call them if their card is stopped.

Unfortunately, banks usually require the primary cardholder to call and confirm the transaction is not fraudulent. And no matter how well your bank knows you, it won’t let you unblock your child’s account.

This is another reason why it is a good idea to have a pre-paid card as well as a debit card. Call the number on the back of the card to report it as being frozen.

Some parents ask to be given a ‘third-party mandate’ on their child’s bank account, so they can manage the account from home.

But while a mandate allows a parent to make payments or transfers, it still won’t help them unfreeze their child’s account.

If you want to set up a mandate, make an appointment with your child at your local bank branch and ask for all of the relevant forms.

Strapped for cash

Money is tight for most gap-year travelers – and the majority massively underestimates how much they will need.

Your child can easily rack up hundreds of pounds in fees if they use the wrong credit or debit card to pay for goods abroad. For example, most banks charge at least 3 pc for every transaction on a debit card, so make sure they use these cards as little as possible

Credit cards can be even more expensive – make four £100 purchases on an American Express card and it will cost £11.96.

Make sure they have a fee-free pre-paid card and choose their cards carefully. Get them to keep the cards separately, so if one is stolen, there is another way to access cash.

The cheapest pre-paid cards are Travelex or Caxton FX, as these are free to load with money and use abroad at cash machines or in shops. Many other pre-paid cards charge upwards of £1.50 per transaction.

One option is for you to take out a card in your name and give your child a second card. This allows you to run the account — you can log in online or top it up over the phone.

Top-ups will be made instantly, which is perfect for that inevitable call when your child has run out of cash. An alternative is for your child to take out a card in their name, but then the only way for you to top up the card is through online banking.

The cheapest debit card to use abroad is Nationwide, as it only charges a fee of 1 pc for cash withdrawals and retail transactions.

Withdrawing £100 four times would cost £4 with Nationwide, but £18.96 for the same transactions with Santander, which charges 1.5 pc for cash withdrawals and a 2.75 pc foreign currency charge.

While a credit card is useful for emergencies, it should never be used to withdraw cash, as this will attract interest from the moment the money is withdrawn.

The cheapest credit cards for purchases are the Halifax Clarity Mastercard and the Santander Zero credit card, neither of which imposes charges for spending.

Make sure all your child’s payments are up to date, in case an unexpected direct debit suddenly takes them overdrawn.

For the best ways to spend money abroad visit www.thisismoney.co.uk/travel-cash

Danger and disaster

Unfortunately, accidents and injuries while on a gap year are all too common. Adventurous travelers overindulge in partying, go bungee-jumping off gorges, sky-diving, ride scooters in chaotic traffic, and fall ill while climbing or skiing and get bitten by strange creatures.

Overseas medical bills can be astronomical. Fixing a broken leg in the U.S. can cost more than £22,000, for example.

Insurers with the best quality policies are FlexiCover Direct at £255 for an annual worldwide policy, Citybond Suretravel at £331 and Insure & Go at £345, according to analyst Defaqto. Manor Insurance also rated well.

Ensure repatriation – the cost of returning someone to the UK if they are ill and can’t take a normal flight or need a nurse to accompany them – is included.

Check which countries they are covered for.

The Foreign and Commonwealth Office (www.fco.gov.uk) has a list of countries or regions it advises against travelling to. Daredevil sports such as white water rafting, quad biking or bungee jumping can be excluded from policies, so check carefully.

Insurers often try to wriggle out of settling claims for theft by claiming the possession was left ‘unattended’.

Your child should keep all valuables on their person or in a locked safe — otherwise, policies are unlikely to pay out, especially if something was stolen on a beach or at a swimming pool.

Emma Parker, of the Financial Ombudsman Service, which settles disputes between consumers and insurers, says: ‘Always check the excess charges, limitations and exclusions on the policy, and remember cheap cover may be a false economy.

‘If they will take part in activities like riding mopeds or scooters, make sure they have the necessary licenses and certificates – otherwise the policy may not pay out if they have an accident.’

If your child is travelling to Europe, make sure they have a European Health Insurance Card EHIC), as some insurance policies might not pay out without it.

Go to www.ehic.org.uk and avoid any scam sites that try to charge you for applying.

Lost contact

Grown-up children can be pretty hard to pin down at the best of times, on the other side the planet and with the lots of new places to see, getting hold of them is often almost impossible.

What’s more, using mobile phones abroad can be incredibly expensive, so make sure your child contacts their mobile phone provider before they leave the country to ask about cheaper international tariffs.

range, for example, charges a minute to make a call from Australia, 75p a minute to receive calls, 40p to send a text message and an astonishing £8 per MB for internet usage.

The cost of making calls is even more expensive in the U.S., at £1.10 per minute. These high charges can be avoided by signing up to a special tariff before they leave.

One of the best deals for travelers is Vodafone Passport — it is free for all customers and allows you to make calls charged at the normal network rate, plus a 75p connection charge, in 35 European countries as well as New Zealand and Australia.

Orange and O2 also offer good traveler services offering flat-rate costs for calls and texts for a small monthly fee.

If your child is staying in one country they could buy a local SIM card (the little chip that registers the card with a local network) and put it in their existing phone.

This would then allow them to call and text other people in that country much more cheaply and receive incoming calls from the UK for free.

They might need to have their phone unlocked so it can use any network, before they go.

Using the internet on mobile phones should be avoided when abroad. Always check automatic data roaming is switched off; otherwise users might be continuously paying to have their phone connected to the internet and downloading pages.

It may be best for them to use an internet cafe to access emails, where they can also use free video or phone calls.

Email and internet phone service Skype might well prove the best way to keep in touch regularly.

If you don’t have internet access at home, your local library might offer a cheap service (although this may not be ideal for internet phone calls), and internet cafes can be as cheap as 50p for 30 minutes.

Your child might also use websites such as Facebook to keep in touch with friends and post photos.

You can also open a Facebook account to see what they are up to. But be careful about how much of your own personal details you register with this site, and tell your child to be careful too, as fraudsters could take advantage of their prolonged absence to steal their identity.

Gap-year checklist

• Make sure they take a list of useful phone numbers such as family, consulates in the countries they are visiting, bank and travel insurer (including policy number).
• Get them to take a photocopy of their passport.
• Research security at the Foreign and Commonwealth Office website www.fco.gov.uk
• Make sure they have the right vaccinations at www.fitfortravel.scot.nhs.uk
• Make them carry a fake wallet with old cards and change. If they get mugged, they can hand it over.

I had my account frozen

Luke Dampier, 20, had his bank account frozen four times while on a round-the-world sailing trip after finishing his A-levels.

Even though he told Lloyds TSB where he would be during his travels, it still decided his attempted transactions were suspicious.

Because he was often at sea for several days, he was out of contact for long periods of time and was unable to contact his bank.

‘My mum was named as a third-party mandate on my account so she could deal with any problems,’ he says. ‘But a couple of times the bank still insisted on speaking to me, not my mum, to reactivate the account.’

Luke, pictured right, who lives in Sidcot, near Bristol, travelled to 14 different places over ten months, including South Africa, the U.S. and China. His father gave him a fee-free Caxton FX card, which he loaded online when Luke needed more money. ‘I wish I’d used the card more,’ says Luke.

‘I had about £300 worth of bank charges while away, as the bank charged every time I withdrew money or paid for something.’

Luke has an offer of a scholarship to study film and photography at the New York next year.

Cards stolen from handbag

Emily Bateson was one week into her ski season in Val d’Isere, southern France, when her handbag containing €1,000 and all her bank cards was stolen. 

The 22-year-old, who had completed a degree in marketing and management at Newcastle University, asked her parents to put money in her friend’s account and used this while she waited for a replacement card.

Ms Bateson, who lives in north London and works in marketing, says: ‘Natwest would only send a replacement card to my home address – not my address in France – so my parents had to pick up the new card and PIN then send the card to France. My travel insurer was useless.

They’d only deal with me, not my mum, so I had to sort out my claim when I got back seven months later. ‘I wasn’t covered for stolen cash and I was only covered for half of what was stolen.’

I had my cards stolen

Sonia Nootan, from Ilford, Essex, recently returned from an eight-month trip after finishing her degree at the London School of Economics.

The 22-year-old, pictured right, lost her Nationwide debit card while travelling and the building society was unable to send her a replacement, so she had to use her Natwest debit card, which charges 2.75 pc plus £1.25 for foreign transactions instead of the 1pc on her Nationwide card.

She says: ‘It was noticeable how much more expensive the Natwest card was abroad. Also, the bank froze my account after I withdrew £400 in one go. I had to phone via Skype to reactivate it.’

Ms Nootan, whose destinations included Indonesia and Brazil, bought local SIM cards when travelling in Asia to make cheaper calls.

She kept in touch with her family by using Skype at internet cafes or hostels.

She also had her iPod stolen from her luggage on her flight from Rio to London, so has claimed $349 (£226).

When the UK just doesn’t seem big enough to fulfil your business goals, it might be time to make a move overseas. Anita Brook looks at what to consider before seeking markets across the pond.

Making business moves internationally might seem like a scary prospect, but if successful, it is a risk well-worth taking, with global markets providing the opportunity for levels of expansion well-beyond the limits of our little islands. So, how can you minimise the risks and maximise your chances of success around the world?

1. 1.       Know your market

Do as much research as you can in order to gain an insight into how the market operates and what it wants. This is not as easy as researching the UK marketplace, but there are resources, detailed in point three, which can help.

1. Local employees

Invest in employing somebody local to the country you’re targeting as quickly as you can afford to. However much research you do nothing can replace true insider knowledge. And, as your business expands, overseas customers may respond better to people who understand their culture.

1. Utilise free support

UK Trade and Investment (UKTI) http://www.ukti.gov.uk, is a government body designed to help UK-based companies achieve success abroad, by helping forge contacts and encouraging overseas businesses to trade back with the UK. The Foreign and Commonwealth Office (FCO) http://www.fco.gov.uk/ can also provide information about overseas territories and is responsible for promoting British interests around the world.

The Chamber of Commerce http://www.britishchambers.org.uk/, Trade Associations http://www.britishservices.co.uk/associations.htm and the Chartered Business Institute (CBI) http://www.cbi.org.uk all have departments dedicated to helping businesses export or invest overseas.

1. 4.       Instil trust

There is a massive trust issue doing business with people hundreds and thousands of miles away from the head quarters. New customers in foreign climes will want to know if they can put their faith in you. Using the contacts listed above will help, as well as maybe instructing specialist agencies to make enquiries.

Make sure senior management pay regular visits to the new countries you’re operating in and set clear and monitored performance requirements, reporting procedures and responsibilities for any new staff.

1. 5.       Factor in the exchange rate

If you’re not confident with foreign exchange deals, then talk to your bank about overseas and investment plans. Fluctuations in the rate of exchange are a fact of business life and need to be considered in any plans. If you’re looking to invest try to raise finance in the same currency.

1. 6.       Check your tax

You may find that can’t get tax relief for losses on foreign exchange or, you may get taxed on gains you won’t have recognised. There could also be restrictions on how much you can finance by way of loans rather than equity capital. Visit http://www.hmrc.gov.uk  for more information.

1. 7.       Keep your finances safe

When trading overseas you need to consult your bank regarding what facilities might be available. In addition to exchange rate risk, you might consider keeping banking facilities closed to new customers – especially when there are difficulties in ascertaining reliable credit risk information.

1. 8.       Seek advice

Get as much advice as you can, talk to as many people as possible and make sure you’ve sought the guidance of a reputable accountant when it comes to keeping the monies of your overseas venture in order.

There’s a whole world out there that might just be waiting for your business idea, so now could be just the time to take the step off the UK and into markets around the world.

Each week we choose up to five questions for our panel of experts to answer – and publish the results on the FMWF site. Unfortunately we are unable to answer all the questions we receive or send personal replies.

To increase your chances of being chosen, please write your question carefully in simple, concise English and include any facts and figures that you feel will help us fully understand your situation.

Email: women@financialmail.co.uk 

Will taking a breast cancer gene test affect any insurance I take out in the future?

Breast cancer is in my family and I am tempted to take a test to see if I carry the cancer gene, However, I am worried this will affect any insurance I take out in the future.  I am 22 – please can you advise?  Francess, Harrogate.

Kim Faulkner, Independent Financial Adviser at Keighley based Thompson Faulkner said: ‘When you complete an application form for life or critical illness cover one of the questions that you have to answer will be whether or not any members of your family have died or suffered from a list of illnesses under a certain age, usually 60 or 65, one of which is cancer. You will need to give them information on their relationship to you, and the age at which they were diagnosed. The insurer will then use this information to decide whether or not they will ‘load’ your premium to take account of this potential risk. Depending on your answer, you may therefore pay a higher premium even if you don’t have the test. If you decide to have the test, the insurer may use the results may influence their decision one way or the other – but of course if the result comes back negative this could actually be beneficial to you as it will be weighed up against the other information you have provided. Although your life assurance premium may be affected, it is more likely to have a significant effect on a critical illness policy. Always be open and honest when filling in your application, because if they find out you have hidden anything from them they may not pay out on a claim.

How much should I be looking to save to make me feel more financially secure?

I am 35 and sometimes I feel I will never achieve financial stability.  I work full time but by the time I have paid my rent and bills I barely have a penny left to save.  I have no pension and no savings but could probably scrape together around £25 a month, which investments do you recommend? Susan, London

Kim Faulkner, Independent Financial Adviser at Keighley based Thompson Faulkner said: ‘Your first priority should be to build up some sort of ‘emergency’ fund so that you have cash available should you need it at short notice. Generally speaking this would take the form of a simple bank or building society deposit account in the early stages, until such time as the amount has built up to a comfortable level. Everyone is different, but as a guideline you should be thinking about holding the equivalent to between 3 to 6 months salary in cash for those rainy days.

You can invest up to £5,100 each tax year into a cash ISA and benefit from tax free growth on your savings, and several banks and building societies offer regular savings accounts. Interest rates change on an almost daily basis, and it is worthwhile shopping around for the best rates regularly. Internet accounts tend to offer better rates than branch based accounts, and there are several comparison sites on the internet that can give you information on the current deals.

How much money do I need to be saving to pay for my baby to be privately educated one day?

My daughter is 6 months and I would really like to privately educate her when she starts school in five years time.  How much money would I need to save per month and can you recommend a good investment? Amanda, Wiltshire

Kim Faulkner, Independent Financial Adviser at Keighley based Thompson Faulkner said: ‘Private school fees vary from area to area, and increase as your child progresses through the school. You will need to allow for extra expenses such as school uniform, trips and other extra-curricular activities, which can add a further 10% on the basic fees. You also need to decide whether she is going to board when she gets older, as this of course adds to the cost again. On average, private school fees increase at around 6% per annum, which means that by the time your daughter starts school you might be looking at a total outlay of between £6,000 and £10,000 in the early years, rising to perhaps £30,000 per year by the time your daughter is 18. This on the backdrop that some boarding schools are already charging in excess of £30,000 per year. Realistically you are looking at a total expenditure of perhaps £250,000 to £500,000 during your daughters schooling as a day pupil, which would require a minimum saving of £1,500 to £2,000 per month in the early years. There are several websites offering school fees calculators to help you decide how much you need to save, but because of the complexities surrounding school fee planning and the risk associated with the different types of investment it is worth obtaining specialist advice in this area.

Tel: 01535 210179

www.thompsonfaulkner.co.uk

Kim Faulkner is a member of the Personal Finance Society at Diploma level, and is actively working towards Chartered status. Her experience within the various working environments, and having attended seminars, meetings and other networking opportunities with fellow IFAs lead her to realise that her approach to financial planning differed to the traditional method of product based sales. In May 2008 Kim decided to become directly authorised to enable her to fulfil her own vision of financial planning, and provide a specialised service to fulfil an identified market need

Despite being two-years down the line, pension reform has come to the fore this month following a statement by the Federation of Small Businesses (FSB). They say that the smallest firms in the UK (10 employees or less) should be exempt due to the complicated nature of these changes – the FSB is currently lobbying government to simplify pensions for micro-companies:

http://www.fsb.org.uk/News.aspx?loc=pressroom&rec=6520.

Whatever happens, the more prepared employers can be for pension reform, the better. Here’s a quick overview of what these changes mean, and how they might affect your business:

Pension reform, the basics:

Initially, only employers with over 30,000 staff will be forced to offer their employees a company pension, with smaller companies brought in-line, in stages until 2016 (2013: 350 employees or more, 2014 – 2016: all other businesses.)

If you already have a qualifying pension scheme, then you don’t have to do anything. If your current scheme is too low, or you don’t have one at all, then you can either put in place the statutory pension, through NEST (National Employment Savings Trust) http://www.nestpensions.org.uk/index.aspx, which has been set up by the government to meet the needs of low to moderate earners, or implement your own scheme (as long as it meets or exceeds the basic criteria of NEST.)

Through NEST employees will be auto-enrolled and can expect their company to contribute a minimum 3% of any earnings between £5,035 and £3,540 into each worker’s fund. Contributions can be made on the full salary amount or band earnings.

In addition to the 3% from employers, employees will also be expected to make a contribution of 4%; the government will add a further 1% to the pot.

Bottom of Form

Steps to take now

Budget

There is no harm in budgeting now for these new measures. Consider the cost impact of the compulsory 3% to prevent a nasty financial blow in a few years time. You might also take this opportunity to review employees total remuneration package in order to absorb the extra costs.

Decide which type of pension you want to offer staff

Look at the pros and cons of your own employer pension scheme versus NEST. It may be that combination of the two is the best approach in the first instance, with different staff eligible for different schemes; providing more of an allowance for senior staff, for example.

Pensions help recruitment and retention

Having a pension scheme is not just about meeting the government’s requirements. A good pension scheme, as part of an overall benefits package, can help you win and retain staff. Organisations that provide pensions above the standard laid out by the Government are likely to be a more attractive proposition.

If you already, or intend to, offer a scheme with contribution rates above the statutory minimum then it could be worth applying for a pension quality mark, differentiating your scheme from others. http://www.pensionqualitymark.org.uk.

Administration

Make sure you are ready to deal with the administration. Your payroll and HR systems must be able to cope with any changes. This will be particularly relevant for organisations that intend to run both their own pension scheme and the NEST system.

The pension system in this country has been greatly criticised and like it or not, some sort of reform has to take place. We are all living longer and there isn’t enough cash to go round. With the UK’s smallest businesses being allowed the greatest amount of time to get ready for pension reform, hopefully SMEs won’t suffer too much at the hands of new Government legislation.

With current fixed interest rates of 2.65% AER available (based on First direct eISA Account) £5100 will become £5237* after one year.

The report, from research firm Datamonitor, reveals for the first time the number of ‘rich’ people robbed by the downturn.

It also highlights how hard the recession has hit the value of savings and investments, which may take decades to recover their value.

Before the credit crunch struck in 2007, there were 7.9million people in Britain who were classified as ‘affluent’.

To be ‘affluent’, you must have more than £30,000 in liquid assets, such as cash, savings, bonds and stock market investments. The value of pensions and property is not included.

Two years later, the number of ‘affluent’ Britons had dropped dramatically by 700,000 to 7.2million by the end of 2009, according to Datamonitor.

Many have been the victims of redundancy, with more than 500,000 private sector workers losing their jobs since the start of 2007.

Without a job, many have been forced to raid their savings to keep afloat.

For others, the plunge in the stock market since the start of 2007 has triggered their eviction from the ‘affluent’ club.

At the beginning of 2007, the FTSE index of Britain’s 100 biggest public companies stood at 6,220. Yesterday it closed at 5,109, a fall of nearly 18 per cent.

Some of the biggest victims have been the elderly who invested in ‘safe’ companies which used to pay generous dividends, such as Lloyds Banking Group and Royal Bank of Scotland.

Michele Gorman, a financial analyst at Datamonitor, said: ‘The affluent population will recover, in terms of the size of the population and their assets. But it will take time because we are not through the crisis yet.’

The report comes after an investigation by Britain’s leading independent economic institute into how much money people lost during the recession.

The average person lost £11,300, equal to £22,600 for a couple, according to the Institute for Fiscal Studies.

Hundreds of thousands of workers, whose salaries were frozen during the recession, are finally scooping a decent pay rise, a report reveals today.

It will come as a huge relief for those who have struggled to survive on a take-home pay packet which has been stuck at the same level for up to two years.

The research reveals one in three pay awards agreed between May and July were for three per cent or above, according to the pay experts Incomes Data Services.

Lorna Clow was given a week’s notice to leave after the health service decided she was no longer eligible for funding because she was too healthy.

But Mrs Clow’s daughter Diane claims her mother is crippled by arthritis, needs four staff members to help her bathe as she is too frail to use a hoist, and is very confused.

The family is now involved in a bitter showdown with the local health authority, Torbay Care Trust.

The stand-off highlights the problems of local health care trusts acting as judge and jury: they conduct the assessments and hold the purse strings for elderly residents.

Diane says: ‘My mum is severely disabled by her arthritis and is in constant pain. As such, she should be entitled to free NHS care. I can’t believe the system is letting her down in her time of need.’

Mrs Clow was in the fire service during World War II and worked all her life running a hotel with her husband Ronald, who died three years ago. She was living in sheltered accommodation in Torquay when her health suddenly deteriorated after she celebrated her 90th birthday last February.

A doctor advised she should be moved to a nearby nursing home under an intermediate care order. This meant the Torbay Care Trust would pay the £525 weekly fees for the home. It also required Mrs Clow’s health to be reassessed after six weeks.

The law states if a person’s primary need is health care, then all the costs should be met by the NHS. Before the position can change, there should be a review of the person’s health, which can be challenged by the family.

Mrs Clow’s health was assessed in April, when a care trust board meeting decided she was better and her funding should be stopped immediately. Her daughter Diane, 55, says: ‘I disagreed with them about virtually everything.’

A further assessment was carried out in May, but the care trust stood by its original decision.

At the beginning of June, the home gave Mrs Clow one week’s notice to leave.

Yet she has nowhere to go because her former sheltered accommodation had been rented out and her possessions put in storage. She wouldn’t be allowed to return anyway, as she is incapable of living independently.

Now the family are in a stand-off. Mrs Clow is still in the home, but no one is paying the fees.

As a result, the nursing home is threatening Diane with a court order to recover the fees of £5,400 incurred since funding stopped.

Healthcare rules state that while the review is being conducted, the trust should continue to provide funding until the outcome is known.

The family have enlisted the help of care fees campaigner Stephen Squires. He has won a number of cases against health authorities which have denied funding to elderly care home residents.

Mr Squires says: ‘The trust has ignored its own rules. The appeals and review process has not even commenced, let alone been concluded.’

Diane is so unhappy with the trust that she is desperately renovating her home so her mother can live with her. However, this is a massive job and she needs her mother to stay in care until it is completed.

A spokesman for Torbay Care Trust says: ‘We have followed the correct process absolutely. We’ve conducted a full multi-disciplinary assessment of Mrs Clow by healthcare professionals and found she is well enough to go home.

‘We’ve had no formal request for an appeal of our decision by Mrs Clow, and we’ve yet to see proof that Miss Clow has her power of attorney.’

Diane claims she showed the board her power of attorney, which grants her the power to act for her mother, at the April meeting when she contested the outcome.

For a  guide on how to apply for NHS funding is at www.thisismoney.co.uk/careguide

Boys are expected to narrow girls’ lead at age 16 following a reduction in coursework at GCSE.

More than a fifth of exams overall will be awarded at least an A – nearly three times as many as in 1988, when GCSEs were first widely taken.

Assessment experts said questions had become increasingly ‘predictable’ and pupils and teachers knew what to expect.

They also suggested grade ‘inflation’ was partly responsible for relentless year-on-year improvements in results.

A Government White Paper due out in autumn is expected to outline plans for a major overhaul of the school curriculum including qualifications.

GCSE results for 750,000 pupils in England, Wales and Northern Ireland, being posted in schools on Tuesday, are predicted to be the best in the exam’s 23-year history.

Pupils are expected to pass around 22 per cent of exams at grades A* or A, with girls topping last year’s 24.4 per cent.

Boys are expected to exceed last year’s 18.7 per cent A-grade pass rate.

In 1988, just 8.6 per cent of candidates scored As. The A* grade was introduced in 1994 for A-grade students with the highest marks.

At the same time, the percentage of GCSEs awarded A* to C grades is expected to rise to nearly seven in 10, exceeding last year’s 67.1 per cent.

This is more than 50 per cent up on two decades ago. In 1988, the figure was 42.5 per cent.

Professor Alan Smithers, director of the Centre for Education and Employment Research at Buckingham University, said suggested highly-tailored teaching and ‘built-in inflation’ were responsible were the consistent rises in results.

‘The questions themselves are becoming much more predictable; they are highly structured and teachers are increasingly familiar with them,’ he said.

There was a sense in which ‘examiners feel they are doing a good job if results nudge up a bit each year’, he said.

‘Exams just seem to have the same built-in inflation that our currency has,’ he said.
‘Although they will deny it, examiners seem quite happy if there is a little bit of inflation each year.’

However he raised concern about a decline in perfomance in English last year.
The proportion of pupils gaining at least a C in English dipped in 2009 from 62.9 per cent to 62.7 per cent.

The subject had benefited from significant investment through the last Government’s ‘national strategies’ for literacy and numeracy, he said.

Professor Smithers said the results for English and maths were ‘the best indication of what’s happening in the school system’.

He added: ‘It should be going up a bit faster given the investment in primary schools and National Strategies should be filtering through now.’

Teachers’ leaders demanded an overhaul of exams to ensure that youngsters leave school with the qualities employers are demanding.

Nansi Ellis, head of education policy at the Association of Teachers and Lecturers, said the UK’s exam system was ‘in disarray’.

‘It consistently fails the 40 per cent of young people who do not get five good GCSE passes and leave school feeling failures.

‘But even those who achieve a string of A s are not well served by GCSEs; they are taught to pass tests, rather than encouraged to learn skills and leave bored by endless testing.’