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Whether you are thinking about retirement or just starting to earn, knowing how your pension works, how to build one and how to withdraw your pension are all important.

Your pension is an important investment and you should know your options so you can begin planning your future.

State pension

When you are 66 years old, the government will provide you with a state pension, a monthly payment which comes from taxes to allow those who have retired to afford the necessities.

You will receive a letter from the government when you reach the suitable age with information on withdrawing your pension as regular payments.

The age at which you can withdraw your state pension is gradually increasing.

The state pension is determined from the amount of National Insurance contributions you have made throughout your working life. You will need at least 10 qualifying years on your National Insurance record to receive your state pension. You will be able to receive a state pension without National Insurance contributions if you have been on any type of benefits including, universal credits and a carer's allowance.

The Government aims to increase the state pension allowance to remain in line with the cost of living and inflation each year.

What are Qualifying years?

If you are employed and earning over a set amount you will be paying National Insurance tax which will build up and you will receive your state pension if you have been doing this for a minimum of 10 years. This does not have to be 10 years in a row, just 10 years throughout your working life.

 

Workplace Pension

You will be auto-enrolled by your workplace into a pension scheme where a percentage of your salary will be added to the pension pot. This will usually be 8% in total with 3% coming from your employer and the rest from your salary. You should receive a letter from the pension provider chosen by your workplace when they have set this up, you will be given details of the specific scheme in full.

You can choose to opt out of the workplace pension if you wish however this is a great way to start a pension pot without it affecting your take home salary too much. The money that goes into your pension is also tax-free.

Private pension

Setting up a personal pension scheme could be beneficial if you are not in a job that automatically enrols you on one, you want to start saving for your pension early or you want to have extra money for your retirement.

 

The state pension will only be enough to afford the basic necessities once you retire so it would be beneficial to choose another option as well. When you make payments into your pension pot you are investing into your future and ensuring you will be able to have a good life in retirement.

It is never too early to begin your pension pot!

There is a lot to organise when you are moving, especially when moving across the world!

If you are permanently moving to Australia you will want an Australian bank account, this will help you avoid charges and give you a secure way to spend, save and receive payments whilst in Australia.

There are 4 main banks in Australia

ANZ – Open an everyday account with ANZ to hold money and receive your salary. There will be a $5 monthly fee to have an account with them. ANZ have wide access to ATMs across Australia so you will be able to withdraw without any fees if you use these.

Commonwealth Bank – Known as Australia's largest bank. Offering assistance with your move to Australia to help you settle in quickly. You can open an everyday account and a savings account. There will be a $4 monthly fee to have an account however they offer new customers 12 months free to set you up with ease. You will be able to avoid withdrawal fees as they have a network of ATMs and branches across the country.

Westpac – One of Australia's first banks. You will have a $4 monthly fee to have an account here, after your first 12 months which you can get for free as a new customer. They offer fast and secure banking using mobile apps and more. You will have no fees when sending money overseas, meaning you can send money back to your friends and family with no trouble.

NAB – Known as Australia’s largest business bank helping small, medium, and large businesses take care of their finances. You can enjoy no monthly fees or withdrawal fees when you have a transaction or savings account with NAB. You will have to go into a branch to set up your account when you arrive in Australia.

These banks will often waive the monthly fees if you meet these requirements;

What you will need to set up a bank account

You will be able to start the process of setting up a bank account whilst still in the UK however, you will have to complete the process once you arrive and go into a branch.

To start the process online you will need.

Once you have uploaded the correct information online you will have to verify all the documents again in person so you can withdraw, spend, and move money.

Accounts you can open before you leave

 

 

As per reporting by the ONS (The Office for National Statistics) for the second quarter in a row, the GDP (Gross Domestic Product) of the UK has declined, meaning that for Q3 & Q4, GDP in the UK shrank by 0.5%.

This was the mildest start to a recession since the 1970s, with the last five in the UK seeing the economy shrink by more than 1%, and in further promising news, forecasters believe this will only be a short-term recession.

What caused the recession?

The BoE (Bank of England) has set interest rates at 5.25% (the highest rate in 16 years) to combat inflation, which has indeed shrunk from the 11.1% high in October 2022 to 4% as of February 2024. And whilst this is promising news, it does mean that the cost of borrowing is high. Furthermore, the inflation rate is still double the BoE's targeted 2%, so interest rates are unlikely to fall until the summer of 2024 at the very earliest.

Why raise the rates?

Increasing the rates forces people to stop spending as freely as the interest on borrowing for products such as mortgages, credit cards, and personal loans is higher.

By raising the rates, disposable income is lower, and it encourages people to save instead of spend which impacts services such as retail and despite Christmas, December retail sales fell by 3.2%. ONS figures show that all major sectors - services (by 0.2%), production (1%) and construction (1.3%) contracted in the final three months of 2023. 

What does this mean?

The promising news is that it's thought to be a short-term recession and despite this recession at the back end of 2023, the economy did grow by 0.1% in 2023, while not inspiring, does mean that there is a platform for growth in 2024. 

Interest rates will likely come down this year, which should help ease the burden of the ongoing cost of living crisis. And lead to a stronger end of year for the UK. As these interest rates come down, and if inflation remains low, this should have a corresponding impact on growth for the UK as it will free up capital for investment.

Politically it could have a large impact on current Prime Minister Rishi Sunak, who pledged last year to halve inflation and grow the economy. Whilst the inflation rates coming down will be a sign of promise, the recession will come as a large blow to Mr Sunak & the Conservatives with an election looming.

 

The February half term is here and many families are planning trips and days out for the week ahead. Trying to find activities that the whole family will enjoy and that won’t put a strain on your bank account can prove quite difficult.

We have found free activities you can do at home or lower cost days out to plan for the week. Spend time with your kids without worrying about the cost.

Go Camping!

Finding a pitch to go camping can be a low cost plan for a one night stay or more. Find campsites near you using Pitchup. Pack lots of layers in the car and head over to spend a night under the stars. You could find a campsite which will host events for the kids but if not, take a stroll around the countryside and see what wildlife you can spot. Reserve a campfire to roast marshmallows,

To make this even more budget friendly, you can pitch your tent in the garden, make some s’mores and tell spooky stories for the night. The kids will love the idea of making a bedroom in the garden and you don’t have to spend a thing.

Make a den inside!

The February weather may make you lean towards more indoor activities and we don’t blame you! Why not try out den making? Push the chairs and sofa’s together, bring down all your sheets and work as a team to build to ultimate den. You can create a name for the new kingdom and give everyone a role to defend the land, get the kids working together and spark their imaginations.

Host a mini Olympics!

Set up an obstacle course and make them jump through hoops, literally. Set it up outside, or in the house if you’re brave and select fun prizes for them to win for each round. This could be chocolate or it could be choosing the movie the family watches that night.

The egg and spoon race, beanbag race (using pillowcases), set up a course around the house and see who gets to the finish line first, use chairs and soft cushions to slow them down and make them jump over them.

This will be great entertainment, for you and the kids and will result in very tired children by the end of the day. Keeping them active, engaged and entertained.

Visit your local farm park!

There are farm parks all across the UK and usually with low entry costs too. Take the kids to visit the animals and learn all about farm life. This is a great way for kids to learn and being around animals is always positive, they could even feed them.

Craft days!

Getting messy and creating something fun is usually a hit and you can do this at home for a low cost. Visit your local Hobbycraft or other craft store and pick out something fun. At Hobbycraft you will find ceramic money boxes which you can paint. For £5 you can choose from a wide variety of characters including a dinosaur, a fairy, a car, an octopus and more and it comes with the paint and the brushes already. Lay down a sheet on your table at home and let them get to work. Once they are done they will have a creation of their own, and a place to keep any pocket money too.

You might also find that the Hobby craft near you is hosting workshops that are only £5-8 to join in on activities like canvas painting and making clay animals.

Make a photo album!

Let your kids create a book of memories that you can all enjoy looking back on. Help them pick the photos and add them to a book. Write notes for each picture and go wild with creativity. Even with the finger marks, the bad spelling or the smudges, this will be something you can look back on as your children write messages about each memory in the photo.

Disorder and turbulence may result from this kind of susceptibility. Your duty as an administrator is to guide your team through these difficult circumstances and withstand the storm. 

Nevertheless, the strain might become intolerable if you don't have precautions and contingency plans for potential catastrophes. We'll consider 5 strategies you may use to deal with unfavourable workplace circumstances to help you overcome these obstacles while keeping your employees on track.

#1 - Communicate transparently

During emergencies, it is critical to communicate clearly and promptly. To keep everyone up to date, create numerous communication avenues both inside and outside routes. Ensure the information supplied is reliable, consistent, and accessible with frequent updates.

Your supervisors should have the final word on any ideas you propose. This will be very beneficial for analyzing and enhancing answers with each circumstance. Keeping everyone in the loop about incidents can help the team gain insight into the bad ones. To communicate efficiently and transparently, consider affording an emergency management degree, which will help provide the best resolution. 

#2 - Put employee safety first

During an emergency, you should put the security of your staff first. Ensure the employee's safety, take responsibility for all of them, and give them the required help. The instances of a physical crisis, like a fire, and a psychological emergency, like exhaustion or an emotional breakdown, can qualify as such. Observe the correct procedures for reacting to uphold the company's fundamental principles.

#3 - Set up an emergency response plan

Create a thorough strategy outlining positions, duties, and protocols for various situations. Ensure everyone on staff is aware of this strategy, and regularly run drills and exercises to evaluate its efficacy.

Have several meetings with different groups to start this process and discuss potential issues that might occur. Evaluate the most practical and effective methods to address these problems with these groups. Create thorough procedures that will be advantageous to all stakeholders.

#4 - Evaluate the situation diligently

To properly comprehend a crisis or disaster's effects, get the correct data. Analyze the hazards, the resources at hand, and possible outcomes. This knowledge will guide your decision-making, and it will assist you in creating an adequate response. Finding ways to figure this out can help you deal with such complex scenarios most successfully.

#5 - Gather learnings from the experience

After the emergency has been addressed, take time to reflect on it and draw lessons. Perform a post-incident assessment to find out what worked well and what needed improvement. Use this information to improve and modify your emergency management strategy.

Managing emergencies and catastrophes calls for an amalgam of leadership, planning, and adaptation. These 5 strategies can help managers steer their people through challenging situations, mitigate the implications of emergencies, and emerge victorious. Your management choices have an immediate influence on the mental and physical health of your employees as well as the overall viability of your business.

 

Today, thanks to digital leaps, our banking tasks are as simple as sending a text. A great example? Getting a credit card free of any cost. It used to be a maze of paperwork and patience. Now, with banks like Kotak Mahindra, it's a breeze. A few taps, and a bit of typing, and you're set.

Why Opt for Kotak Mahindra for Your Credit Card?

Choosing where to get your credit card is a bit like choosing a dining spot. You'd pick a reliable place, that offers variety, and perhaps gives great discounts. That's Kotak Mahindra Bank for you in the banking world. They're not just any bank; they've earned their stripes and trust over the years. Their credit card options? There’s something for everyone. The ease, the benefits - it's a choice you'll thank yourself for.

Eligibility Criteria Comes First

Think of getting a credit card like planning a trip. You wouldn't just hop on a plane without checking visa requirements, right? Similarly, before shooting off that credit card application, there are some boxes to tick. For starters, banks, including Kotak Mahindra, have a set of eligibility criteria. This usually revolves around your age, income bracket, and sometimes, the city you reside in. Then there's the paperwork. It's not as tedious as it sounds, promise. Keep handy proof of identity, address, and recent income statements, and you're good to go.

Securing Your Kotak Credit Card in Just Three Steps

Getting your hands on a Kotak credit card isn’t some long, drawn-out epic. It's more like a short story, with just three concise chapters:

#1 - The Online Advantage:

It starts on Kotak Mahindra Bank's sleek website or its user-friendly app. Look out for the credit card section, dive in, and key in the specifics they ask for. It’s mostly basics like your name, occupation, and income details.

#2 - Documentation Needed:

Remember the prerequisites we talked about? This is where they come into play. Kotak Mahindra Bank offers a smooth ride here. You can either upload scanned copies of the required docs directly or, if you're a tad traditional or just love human touch, schedule a doorstep pickup. A representative will swing by, collect what's needed, and give you a smile to boot. The mantra? Keep things crisp and clear for a seamless verification process.

#3 - The Approval Process:

Once you've hit that 'submit' or ‘credit card online apply’ button, behind the scenes, Kotak Mahindra Bank's efficient systems are bustling. They're assessing your details, making sure everything aligns. If all's good, you'll get a nod of approval in no time. And before you know it, your brand new credit card is zipping its way to you. The wait isn’t long, and once it's with you, activation is a cinch.

Key Features of Kotak Credit Cards

A Kotak credit card is packed with features to help you in nearly every financial situation. Firstly, every time you swipe, you aren't just paying; you're earning too. With every purchase, reward points stack up, waiting to be redeemed. And if that isn't enough, some sweet cashback offers come your way. Think of it as a little "thank you" for every transaction.

Furthermore, if you're a shopaholic, you'll relish the special deals. Kotak Mahindra Bank's partnerships with brands bring exclusive discounts right to your fingertips. And fear not, with Kotak, security isn’t an afterthought. The bank equips its cards with advanced protective features. Should you ever hit a snag, their customer support jumps into action, ready to steer things right.

Squeeze the Most Out of Your Kotak Credit Card

Owning a Kotak credit card is like having a ticket to an exclusive club. But, you'll want to strut in and use all its facilities. For starters, use the card responsibly. It's tempting to go on a spree, but timely payments ensure you reap the benefits without drowning in debt.

When Kotak Mahindra Bank rolls out those exciting promotional offers, take them up! They're designed to give you maximum value. And here's a pro tip: Link your card with your Kotak Mahindra savings account. Not only does it make payments a breeze, but it also lets you monitor and manage your finances seamlessly. It's like having your cake and eating it too!

Conclusion

The banking world is in a state of constant flux, moving from crowded queues to a few clicks. It's an era of convenience. And in this digital parade, a Kotak Credit Card isn't just a participant; it's leading the march. Look it up, apply now, and let Kotak elevate your banking journey to levels unimagined.

Both banks and credit unions carry their strengths, but what suits you is heavily dependent on personal needs and preferences. So let’s dissect these institutions and empower you to make an informed choice.

Understanding the Basics: Know Your Banks and Credit Unions

It's crucial to grasp what distinguishes banks from credit unions before deliberating over which one best suits you.

In simple terms, a bank is an institution licensed under state or federal laws that gains profits by lending money at higher rates than what they pay to their depositors.

On the other hand, credit unions operate as not-for-profit organizations owned by their members (i.e., account holders) who share common characteristics like workplace or geographical area.

Peeking Under the Hood: How Banks Operate

As mentioned, banks are driven by profits obtained through interest charges on loans and financial products. Here's an inside look:

Understanding these aspects helps evaluate whether you find their operation mode appealing or otherwise.

Credit Unions Offer Similar Products to Banks, e.g. Savings Accounts

Just like banks, credit unions provide a gamut of financial offerings. This includes savings and checking accounts, consumer loans such as personal or auto loans, and mortgages just like traditional banks.

Their not-for-profit status often results in low fees and competitive interest rates compared with banks. For example, you can open up a regular savings account at most credit unions that are insured by the National Credit Union Administration (NCUA) against default risks.

They cater to individualized customer service due to their community focus. Hence they might have strict membership requirements based on common bonds among members (e.g., residing in certain regions or working for specific employers). Having access to similar products coupled with other perks gives us a firm basis for comparison.

Weighing Bank Fees Against Credit Union Dues: Down to Brass Tacks

In terms of cost-effectiveness, both banks and credit unions have their pros and cons. Yet it boils down to what provides more value for you.

Banks may charge higher fees related to overdrafts, minimum balance requirements, or withdrawal penalties which can frequently be subjectively minimized by diligent financial management. In return for a variety of wide-ranging services and conveniences such as extended banking hours, branch networks across the country, and technologically advanced online platforms.

Credit unions typically offer lower fees due simply to their non-profit nature but might come with limited coverage regarding locations or operating hours.

Knowing where your priority lies regarding these aspects will make choosing between the two an easier feat.

Making a Decision: Which Suits You Best?

In weighing both alternatives, there isn't a 'one size fits all' answer. It depends on personal preferences and needs:

The Bottom Line

The last thing to mention is that neither of these options is exclusive. You can utilize both systems for different financial aspects (e.g., auto loans from credit unions while maintaining checking accounts at traditional banks). So consider your needs prudently and choose accordingly.

 

Mastering Your Legacy:

The Essential Guide to Estate Planning

Clive Barwell, TEP CFP™ Chartered FCSI

 In a world where financial acumen is pivotal to one’s peace of mind, delving into the intricacies of estate planning and wealth management is imperative. Today, we sit down with Clive Barwell, TEP CFP™ Chartered FCSI, who has a journey as intriguing as his advice. Starting his career serendipitously after a simple bank visit, he swiftly became an expert in matters of Wills, Trusts, Probate, and Tax Advice. With a remarkable 53 years of experience in the industry, Clive’s specialisation in the later-life market has made him a beacon of guidance for many. In this insightful conversation, we explore the vast world of estate planning, unpack the complexities of inheritance tax, and dive deep into the essence of a well-structured will. Join us as Clive demystifies the financial intricacies of our lives and illustrates the importance of planning ahead for the future.

 

Clive, could you start by telling us about your journey into financial planning and why you chose to specialise in the later life market?

In common with many from my generation, financial services wasn’t my first choice of career. The family profession is teaching, and I thought I was going to teach biology.

However, when that didn’t come to pass, and being an impoverished former student, I asked my Bank Manager for an overdraft whilst looking for a job. Instead of interviewing me for an overdraft, he interviewed me for a job, and the rest, as they say, is history. That’s 53 years ago; I started just seven months after decimalisation.

My initial career in the bank was in their Executor & Trustee Department, so Wills, Trusts, Probate, Investments, and Tax Advice. My first client was a widow in her 70s whose late husband had appointed the bank executor. Not only was this lady vulnerable because of her bereavement, she was also vulnerable because of her lack of financial acumen; her husband had dealt with everything secretively, believing he was doing his wife a favour.

I realised that I had an aptitude for dealing with older people, and the outstanding training I received from the bank through a 24-year career stood me in good stead to advise on not only investments but succession planning and taxation, particularly Inheritance Tax (still Estate Duty when I started). I have continued in this vein as an Independent Financial Adviser for the last 29 years.

 

Could you briefly explain to our readers what estate planning is and why it’s so crucial?

 

Estate Planning is the process of cascading wealth down through the generations in the most tax-efficient and timely manner. This is oversimplifying it. Although it is the case for most families, it also encompasses using some of the accumulated wealth for altruistic purposes.

Most of my clients consider estate planning to be crucial because they feel they’ve already paid enough tax whilst amassing their nest-egg and don’t want to pay any more.

The old business adage, “Failing to plan is planning to fail”, applies equally to estate planning.

The first obstacle to achieving someone’s intentions is the loss of capacity.

The recent, tragic case of Derek Draper, Kate Garraway’s husband, who had a dreadful reaction to Covid-19 in his early 50s, serves to illustrate it is never too early to be thinking of a Lasting Power of Attorney. In the absence of a Lasting Power of Attorney, the only alternative is an application to the Court of Protection for a Deputyship order which is costly, laborious, and onerous.

To be fair, Attorneys under a Lasting Power of Attorney for Property & Financial Affairs are limited in the scope of the estate planning they can undertake. However, with a robustly drafted document, Attorneys can certainly continue what has already been started.

The second obstacle is failing to make or update a Will. In the absence of a Will, the Laws of Intestate Succession dictate who has what and when. It is inappropriate to discuss all the ramifications in this article, but in the case of a married couple with young children, the spouse would get the first £322,000 (increased from £270,00 on 23 July 2023) and half of the balance. The remaining half-share goes to the children at the age of 18. Ask yourself what the 18-year-old you would have done with a substantial inheritance at that age. Would the answer have been different at 21 or 25?

The third obstacle is potential care costs, especially following the first death. At least with Inheritance Tax, there’s a reasonable tax-free threshold (see later comments), but in England, the lower means-tested threshold is just £14,250.

According to Lottie, in May 2023, the average cost of a care home in the UK is £928 per week, and a nursing home £1,025, so it doesn’t take long for a king-sized hole to be made in any inheritance.

 

Inheritance tax can be a complex topic for many people. Can you simplify it for us and highlight the most important aspects people need to be aware of to legally mitigate tax liabilities?

 

Simplify it? The HMRC Inheritance Tax (IHT) Manual runs to 40 volumes alone, so it isn’t easy to summarise, but I’ll give it a go. I’ll use the words “couple” and “spouse” by which I mean people who are married or in a Civil Partnership, so it doesn’t include unmarried people living together, regardless of whether they have children together or not.

For ease, I’ll say it is payable upon death when assets pass by Will or Intestacy to a non-exempt beneficiary. An exempt beneficiary is, in essence, a spouse or UK-registered charity. The first £325,000 (frozen since 2009 and until 05 April 2028, at the earliest) is known as the Nil Rate Band (NRB), which isn’t an exemption but a band of net assets (total value of the estate less liabilities) charged at 0%. Everything above this is taxed at 40% (36% if at least 10% of the taxable estate goes to UK-registered charities).

A Residence NRB was introduced in April 2017, which now increases the standard NRB by up to £175,000 if the share in a residence passes to a lineal descendent – basically children, including stepchildren, and all subsequent generations.

This additional NRB is capped at the value of the interest in the property or £175,000, whichever is the lower. Also, it starts to reduce by £1 for every £2 the total estate exceeds £2m.

At £2.35m, the Residence NRB has gone completely.

Unused NRBs pass from one spouse to the other, so for someone with a property valued more than £350,000, with a total estate less than £2m, the total NRB on the second death could be £1m.

The latest statistics from HMRC for the year ending 05 April 2021, show that only 3.73% of UK estates pay IHT, which has been a consistent figure in recent years. For that 3.73% IHT was onerous, with the average IHT bill being £209,000.

 

What are some common mistakes people make when it comes to planning their estate and inheritance tax, and how can they avoid them?

 

We’re back to “failing to plan”, which involves several issues. In some ways, wealth can almost “creep up” on people, particularly in later life – accumulated savings, increase in property value, pension lump sum, an inheritance – and, without realising it, IHT rears its ugly head. There is also the issue of not knowing what you don’t know, so some people, even if they are aware that they have an IHT or long-term care problem, don’t know that there are things they can do to protect their family’s inheritance.

Those that do realise they have an issue often leave it too late to seek guidance. For example, the simplest way to save IHT is to give away surplus wealth during your lifetime. At the point of making a cash gift, there are no tax implications for either the Donor or the Donee, regardless of the amount given away. However, for the gift to be fully effective for IHT purposes, the Donor must survive for 7 years from the date of the gift. If they don’t, the value of the gift is added back into the IHT calculation upon death. Consequently, seeking advice in your late 70s or later greatly limits the options.

I say, “cash gift”, because a gift of an asset subject to Capital Gains Tax (CGT) – a buy-to-let property, for example – constitutes a disposal for GGT and could trigger an immediate tax liability.

 

How has the landscape of estate planning changed in recent years, and what should people be aware of looking forward to, particularly with a likely change in government and, therefore, policies at the next election?

 

IHT was introduced in 1984 and the broad principles remain unchanged, but the key landmarks have been: 2006 limitation on the use of Trusts; the 2007 introduction of the transferable (between spouses) NRB; the 2009 freezing of the NRB; the 2017 introduction of the Residence NRB.

For many in the group known as the “Mass Affluent”, the introduction of the Residence NRB, which effectively fulfilled the Conservative Party’s promise of a £1m NRB, has lifted them out of the IHT net. However, the freezing of the main NRB against a background of increasing asset prices, particularly housing, has exacerbated the IHT issues for higher net-worth individuals.

As already mentioned, means-tested long-term care has the potential to be more detrimental to a family’s inheritance than IHT, so the repeated failure of successive Parliaments to deliver on any of the recommendations in the Dilnot Report is a key consideration in estate planning – low asset thresholds and no cap on expenditure.

As for the future, I think we can see two polar opposites emerging, with the Conservative Party toying with a manifesto promise to abolish IHT and the Labour Party likely to make it more onerous. The Treasury, for example, is keen to reform some lifetime gifting, which has remained unchanged since 1984. Annual gifts of £3,000 are exempt from IHT but if that amount had been index-linked since 1984, it would now be some £9,300. The Treasury has in mind £15,000 but with a sting in the tail – regular, affordable gifts out of income would no longer be exempt. If you are a Billionaire with an income of several million pounds a year, you can really exploit the gifts out of income exemption, with £15,000 per annum hardly noticeable. It doesn’t take much imagination to think that if Rachel Reeves is in number 11 Downing Street as Chancellor of the Exchequer, the Treasury would be pushing at an open door with such reforms.

Another reform on the Treasury’s agenda which might also benefit from that open door is a reintroduction of CGT on death. Currently, taxable assets such as shares and second properties are revalued on death for IHT purposes, but any potential CGT is forgiven whether IHT is payable.

 

Could you delve deeper into the importance of a will in the process of estate planning? Are there any prevalent misunderstandings about wills that you’ve noticed among your clients when they first contact you?

 

Fundamentally, a Will achieves two things that the Laws of Intestate Succession don’t, the appointment of an Executor or Executors to manage your finances after your death and to specify who has what and when. Remember, currently, the Laws of Intestate Succession don’t recognise the concept of a “Common Law Spouse”, even with children, so a Will is absolutely essential in this situation.

Most couples with children, the common solution is to have a Will leaving everything to each other and then on to the children on the second death, which is what most people want to happen. However, there are several factors this doesn’t address, such as:

ü Long-term Care Costs. Prior to the first death, there is a disregard for the matrimonial home for means-testing whilst the other spouse is living in the property, so the cost of care may not be so much of an issue at this point. However, following the first death, the property may have passed by survivorship and everything else via the Will, so the combined assets are available to pay for care.

ü Divorce or bankruptcy of a main beneficiary. An absolute gift to a child on the second death is just that; the inheritance immediately becomes intermingled with the existing assets of that child. Any subsequent divorce or bankruptcy could see some or all the inheritance disappear.

ü Generational IHT. Are you cascading the IHT problem down the generations alongside the wealth?

These potential problems can be overcome using suitable Trusts in the Will, accompanied by a severance of the joint tenancy on the matrimonial home, meaning that a half-share of the property falls into the Will Trust on the first death rather than passing by survivorship. With the Trust including all subsequent generations of the family, it is easy to skip a generation or two if a beneficiary already has their own IHT problem, which will only be exacerbated by an inheritance.

 

In your opinion, when should someone start thinking about their will, and what are the key factors to consider?

 

As soon as you have something to leave – cash in the bank or equity in a property – it is never too soon. My eBook, “Will Writing the dos and don’ts” has a link to a cost-effective, professional starter Will.

Having written a Will, remember it isn’t a “tablet of stone” that will stand the test of time. Your circumstances are constantly changing, and so should your Will; at minimum, it should be reviewed every 5 years.

Whilst you have young children, your Will should appoint Guardians and probably make those Guardians the Executors. Generally, Guardians will be from your generation but, as you get older, they age with you, and you really need someone from a younger generation as Executor(s).

 

Equity release is another term often associated with estate planning. Could you explain what it means and when it could be a suitable option?

 

Equity release is the process of unlocking some of the money tied-up in your home without having to downsize. The most common reasons for accessing equity release are:

ü Paying off debts, especially interest-only mortgages.

ü Home improvements

ü Helping family and friends

ü Gifting

Generally, this is achieved by way of a lifetime mortgage, which is only repayable on the sale of the property, death, or earlier entry into residential care. In the meantime, interest rolls-up on the loan, so is compounding until the loan is repaid.

At the time of writing, interest rates are over 6% per annum, fixed for the duration of the loan. At this rate, a loan of just £10,000 with interest compounding over 10-years, increases to some £18,200.

Over the years, I’ve come across numerous families who have discovered that parents have responded to a television or newspaper advertisement for equity release, gone ahead and not consulted the family and/or taken fully independent advice. In some cases, the parents had other savings or investments which should have been accessed first. In others, children or grandchildren would have been only too willing to help to protect their eventual inheritance.

Equity release is a legitimate tool in the Estate Planner’s kit but something that should only be used as a last resort.

 

 

Lastly, do you have any general advice or important points that you think everyone should know when it comes to estate planning and managing their financial legacy?

Seek professional advice; estate planning is a broad and complex area of financial planning.

Preferably, seek the views of someone you know and find out who their trusted adviser is. If you don’t know anyone who can make a recommendation, then a great starting point is the Society of Later Life Advisers (SOLLA). SOLLA is a not-for-profit consumer protection organisation set up to protect potentially vulnerable individuals from unscrupulous or inadequately qualified financial advisers. Their robust accreditation process is the most arduous test of knowledge, skills, and attitude I’ve undertaken in my 53 years in financial services. Also, it isn’t a once and for all “tick in a box”; the entire accreditation process must be undertaken every 5 years.

 

It will interest you to know that to determine the value of a 1979 quarter, you need to be made aware of factors ranging from coin rarity, coin color, and mint errors, as these have a huge impact in determining how well a coin performs in the coin collectors world.

For this reason and to ensure that you get the highest value for your coin this detailed guide is expertly curated to guide you on ways to determine that 1979 quarter value.

1979 Quarter Value Chart

Here is a breakdown of the 1979 penny price. You’ll find the coin’s grade, variety and their respective prices as determined by PCGS.

Mint Mark Good – Extremely Fine Uncirculated

MS64

Uncirculated

MS66

Uncirculated

MS67+

1979 No Mint Mark Quarter Value $1 $5 $28 $825
1979 D Mint  Quarter Value $1 $16 $34 $2,250
1979 S Mint Mark Quarter (Proof Set) $2 $6 $8 $10
1979 Proof Set  Quarter Value Type 2 $1 $5 $5 $7

 

We recommend using this coin value checker to help you determine the value of the 1979 no-mint mark quarter in your possession. Also, you need to know that the coin's price will vary depending on the grade, which is determined by its condition.

History of the 1979 Quarter

The first time the U.S. Mint struck the Washington Quarter was in 1932. With its arrival on the scene, the standing Liberty quarter was discontinued.

Although the intention was to create a coin that would be produced for one year alone in honor of the first American president, George Washington, on his 200th posthumous birthday anniversary, the 1979 quarter would go on to be used till 1998.

The design adopted spanned longer than planned because the design of the 1979 quarter was in every regard preferred to that of the standing liberty quarter, which it replaced.

To determine the design to be featured on this coin, hundreds of artists submitted designs based on the famous Washington bust sculpture created by French sculptor Jean Antoine Houdon.

After reviewing all the entries by different designers, the Coin Commission chose Laura Gardin Fraser's design. However, when the commission submitted the designs to Treasury Secretary Andrew Mellon, he refused Fraser’s design.

This led to a controversy about whether Mellon refused this design because he didn't believe a female designer should design such a significant coin or if there was another reason he didn't agree with the selected design.

Fraser’s design eventually lost out as Mellon picked John Flanagan's design. However, her design came back to life when it was issued in 1999 as the 1999 George Washington Commemorative Gold $5 Coin.

Features of the 1979 Quarter

This section paints a mental picture of the physical and distinguishing features of the 1979 quarter.

The Obverse

As stated earlier, the 1979 Washington quarter obverse is based on a pre-existing sculpture of George Washington originally sculpted by French sculptor Jean Antoine Houdon.

Here, a left-facing image of George Washington takes center stage.

Common phrases you’ll find here include;

Finally, the 1979 quarters had their mint location inscribed on the obverse. You’ll find it by the right carrying a “D” or “S” mint mark to signify either the Denver or San Francisco mint. Only Philadelphia minted quarters didn't carry such a mark.

The Reverse

The reverse of the 1979 quarter  is totally different from the obverse, as the American eagle occupies the center of the coin here. The eagle clutches a quiver with its talons; this represents war. It also has an olive branch beneath it, representing peace.

In addition, here are some phrases you'll find on close examination of the coin's reverse.

UNITED STATES OF AMERICA: At the top of the coin and very close to the rim

E PLURIBUS UNUM: Right above the eagle’s head

QUARTER DOLLAR: At the lower end of the coin

The Edges

The 1979 Washington Quarter features a reeded edge. This means there are 119 carefully carved-out lines around the edge of every coin that defines its appearance.

1979 Quarter Details

Coin Series: Washington Quarters

Year: 1979

Total Mintage: 1,009,174,955

Designer: John Flanagan

Mint Location: Philadelphia, San Francisco, and Denver

Composition: 75% Copper and 25% Nickel

Diameter: 24.3 millimeters

Weight: 5.67 grams

Edges: Reeded

Melt value: $0.0545

 

In addition to the physical details above, you should also know that this coin is 75% Copper and 25% Nickel over a pure Copper center. The 1979 quarter weighs 5.67 grams and has a melt value of $0.0540.

Finally, this coin holds a face value of $0.25 and comes with a diameter of 24.30 mm and a thickness of 1.95 mm.

 

Varieties of the 1979 Quarter

Depending on the presence or absence of a mint mark and the mint mark itself, 1979 quarters are divided into three different varieties. These mint marks serve as an indication of where the coin was produced.

Mintmarks Location Mintage
1979 No Mint Mark Penny Philadelphia 515,708,000
1979 “D” Mint Mark Penny Denver 489,789,780
1979 “S” Mint Mark Penny San Francisco 3,677,175

 

1979 No Mint Mark Quarter

First, let's begin with the 1979 quarters from the Philadelphia Mint. These quarters possessed no mint marks and total 515,708,000, making it the highest mintage in the Washington quarter series.

You'll find that this coin variety generally holds a market value higher than its actual face value. A 1979 Philadelphia mint quarter in an MS 64 grade which is more common, is worth $5, while a rarer MS67+ grade is worth as much as $825.

In addition to the above, you should also know that the record for the most expensive 1979 no-mint mark quarter sold is held by an MS68 coin worth $1,440. It was sold by heritage auctions in August 2022.

1979 “D” Mint Mark Quarter

In addition to the Mint at Philadelphia, 1979 quarters were also minted in Denver in large numbers, with a total mintage of 489,789,780. Coins from these two mints bore the same physical features. However, the Denver mint possessed the "D" mint mark, while the Philadelphia mint did not.

Although “D” mint 1979 Washington quarters tend to be a little higher in value than those from Philadelphia, factors like the grade of a particular coin will also help determine the disparity in price when valuing the coin.

A low-grade D mint mark 1979 quarter in okay condition will only sell for $1 or $2; those graded higher, like the MS66, can sell for as much as $34, while an MS67+ grade 1979 quarter can rise to as high as $2,250.

The record sale for this coin currently stands at $1,078.

1979 “S” Proof Quarter

In 1979, the San Francisco mint produced 3,677,175 proof quarters in two known types. One proof was called Type 1, and it possessed a filled “S'' mint mark on the right side of the coin's obverse, while the second was tagged Type 2 and has a clear “S” mint mark.

The Type 2 1979 "S" proof quarters are more sought after than their Type 1 counterpart. This is because they possess a clear "S" mint mark. As seen in the table above, this translates to a slight price disparity between the two types.

1979 Quarter Errors

Error coins are common during production. These errors often affect the coin's value, mostly resulting in an increase in the price. Here we’ve put together known 1979 quarter errors

1979 Quarter Filled D Error

The thought of a mint mark being filled immediately brings to mind the type 1 San Francisco proof quarter and not a Denver mint which is why finding a filled D error is quite interesting.

This error makes the coin one of a kind and is in demand by collectors making it worth double the regular asking price. An error coin of this kind sold for $450 on eBay.

1979 Quarter Triple D error

Due to a die error, the D on a quarter may appear to be tripling. This is not a common error. Quarters with this error tend to have a higher value due to this defect.

On eBay, a 1979 quarter with this error currently stands at $500, making it one of the most valuable 1979 error coins available.

FAQs

On What Side Of The 1979 Quarter Will You Find The Mint Mark?

Philadelphia mints do not have any mint marks on the coin. However, you’ll find marks on the Denver Mint and San Francisco proof coins on the right side of the coin's obverse.

Are The 1979 Washington Quarters Rare Coins?

These quarters are not rare because they have very high mintages from the Philadelphia and Denver mint. However, there are rare error coins among them that are high in value.

 

Managing Debt for better mental health

In today's fast-paced society, financial stress has become one of the leading contributors to mental health issues. The debt burden can weigh heavily on individuals, causing anxiety, depression, and even addiction. However, by taking proactive steps to reduce debt and improve financial health, it is possible to alleviate the mental toll that debt can have.

Proactive Steps to Reduce Debt and Improve Mental Health

Dealing with debt can be overwhelming and stressful, but taking proactive steps to manage it can not only improve your financial situation but also have a positive impact on your mental health. Here are some additional strategies and insights to help you on your journey toward debt reduction:

  1. Prioritize your debts strategically:

While it's important to pay off all your debts, it can be beneficial to prioritize them strategically. Consider focusing on high-interest debts first, as they tend to accumulate more quickly. By tackling these debts first, you can save money on interest payments in the long run. However, it's also essential to maintain minimum payments on all your debts to avoid penalties and late fees.

  1. Explore debt snowball or avalanche methods:

The debt snowball method involves paying off your smallest debts first, regardless of interest rates. This approach can provide a sense of accomplishment and motivation as you eliminate smaller balances one by one. On the other hand, the debt avalanche method focuses on paying off debts with the highest interest rates first, potentially saving you more money in the long term. Consider which method aligns better with your financial goals and personality.

  1. Seek professional advice:

Managing debt can be complex, and seeking professional advice can make a significant difference. A financial advisor or credit counsellor can help you develop a personalized debt repayment plan based on your unique circumstances. They can provide insights into budgeting, negotiating with creditors, and exploring debt consolidation options.

  1. Implement lifestyle changes:

Reducing debt often requires making lifestyle changes and adjusting your spending habits. Take a closer look at your monthly expenses and identify areas where you can cut back. This might mean reducing discretionary spending, finding more affordable alternatives for everyday items, or even downsizing your living arrangements temporarily. While these adjustments may be challenging in the short term, they can have a substantial impact on your debt repayment efforts.

  1. Build an emergency fund:

Unexpected expenses can derail your debt repayment progress. By setting aside some money each month into an emergency fund, you can create a financial safety net. This fund can help cover unforeseen costs, such as medical bills or car repairs, without resorting to credit cards or taking on more debt.

  1. Celebrate milestones along the way:

Reducing debt is a long-term journey, and it's essential to celebrate your achievements along the way. Set milestones for yourself, such as paying off a specific debt or reaching a certain amount of debt reduction. Rewarding yourself for reaching these milestones can provide motivation and reinforce positive financial habits.

Remember, managing debt takes time, patience, and perseverance. By implementing these strategies and staying committed to your financial goals, you can reduce your debt and improve your mental well-being in the process.

How to Create a Budget to Help Manage Your Debt

Creating a budget is one of the most critical steps towards managing debt effectively. A budget allows you to track your income and expenses accurately, giving you a clear understanding of where your money is going. When creating a budget to help manage your debt, consider the following:

 

Start by listing all your sources of income, including your salary, investments, or side hustles. Determine the total amount you earn each month.

 

When listing your sources of income, it's important to consider all possible avenues. This may include not only your primary job but also any additional income streams, such as rental properties or freelance work. By including all sources of income, you'll have a comprehensive view of your financial situation, allowing for more accurate budgeting.

 

Next, identify your fixed expenses – these are expenses that recur every month and remain relatively constant, such as rent or mortgage payments, utility bills, and insurance premiums.

 

Fixed expenses are the backbone of your budget. They are the regular payments you make each month that are necessary for maintaining your lifestyle. It's important to carefully consider these expenses and ensure they are accurately reflected in your budget. By doing so, you'll have a clear understanding of the minimum amount you need to cover each month.

 

Take into account your variable expenses – these are expenses that may fluctuate from month to month, such as groceries, transportation, entertainment, and dining out. Be sure to allocate a realistic amount for each category.

 

Variable expenses can be more challenging to budget for since they can vary from month to month. It's important to review your spending habits from previous months to get an idea of how much you typically spend in each category. By allocating a realistic amount for variable expenses, you'll have a better chance of sticking to your budget and avoiding unnecessary debt.

 

With a clear understanding of your income and expenses, calculate how much you can afford to allocate towards debt repayment. Prioritize this amount in your budget and make it a non-negotiable expense.

 

Debt repayment should be a top priority when creating a budget to manage your debt effectively. By allocating a specific amount towards debt repayment and making it a non-negotiable expense, you'll ensure that you're actively working towards reducing your debt. It's important to be realistic in your calculations and avoid overcommitting yourself, as this could lead to financial strain.

 

Track your spending diligently and make adjustments as necessary. Be mindful of any unnecessary expenses that can be eliminated or reduced to free up additional funds for debt repayment.

 

Tracking your spending is an ongoing process that requires discipline and awareness. It's important to regularly review your budget and make adjustments as necessary. By being mindful of unnecessary expenses, you can identify areas where you can cut back and allocate more funds towards debt repayment. Small changes can have a significant impact on your overall financial health.

 

Creating a budget may initially seem daunting, but it is an essential tool in managing debt effectively. By tracking your expenses and prioritizing debt repayment, you will be taking positive steps toward better financial health and improved mental well-being.

The Impact of Poor Money Management on Mental Health

Poor money management can have a significant impact on mental health. The stress of living paycheck to paycheck, being overwhelmed by debt, or constantly worrying about financial stability can lead to various mental health issues.

One of the primary consequences of poor money management is increased stress. Constantly worrying about money can lead to anxiety, sleep disturbances, and even panic attacks. Financial stress can also strain relationships, as it often leads to arguments and tension between partners or family members.

Moreover, the impact of poor money management goes beyond just the immediate stress. It can have long-term effects on an individual's mental well-being. For instance, the constant struggle to make ends meet and the inability to save for the future can create a sense of hopelessness and despair. This feeling of helplessness can contribute to the development or worsening of conditions like depression and chronic anxiety.

Additionally, poor money management can contribute to feelings of guilt and shame. Individuals may feel inadequate or irresponsible for their financial situation, resulting in low self-esteem and a negative self-image. These emotions can further exacerbate mental health conditions such as depression and anxiety.

Furthermore, poor money management often leads to a lack of financial security, making individuals vulnerable to unexpected emergencies or financial crises. The fear of not being able to cover essential expenses or facing insurmountable debt can be overwhelming, leading to feelings of hopelessness and despair.

It is important to recognize the impact that poor money management can have on mental health and take steps to mitigate these effects. By actively working towards improving financial literacy, seeking professional advice, and taking control of your finances, you can improve both your financial well-being and mental health.

Improving financial literacy is a crucial step in managing money effectively. Understanding concepts such as budgeting, saving, and investing can empower individuals to make informed financial decisions. By educating oneself about personal finance, individuals can gain the confidence needed to take control of their financial situation.

Seeking professional advice can also be beneficial for those struggling with poor money management. Financial advisors or credit counsellors can provide guidance on budgeting, debt management, and creating a financial plan. These professionals can help individuals develop strategies to improve their financial situation and reduce the stress associated with money management.

Furthermore, taking control of your finances involves developing healthy financial habits. This can include setting realistic financial goals, tracking expenses, and creating a budget. By implementing these habits, individuals can gain a sense of control over their financial situation and reduce the anxiety and stress associated with poor money management.

In conclusion, poor money management can have a profound impact on mental health. The stress, guilt, and insecurity that come with financial instability can lead to a range of mental health issues, including anxiety, depression, and even panic attacks. It is crucial to recognize the importance of financial well-being and take proactive steps to improve money management skills. By educating oneself, seeking professional advice, and developing healthy financial habits, individuals can enhance both their financial situation and mental well-being.

The Benefits of Good Financial Health for Your Mental Health

On the other hand, striving for good financial health can have significant positive effects on mental well-being. When individuals feel in control of their finances and have a solid understanding of their financial situation, they experience reduced stress and improved psychological well-being.

One of the primary benefits of good financial health is increased peace of mind. Knowing that you have an emergency fund in place, are saving for the future, and are actively managing your debt provides a sense of security and stability. This certainty helps reduce anxiety and allows individuals to focus on other aspects of their lives.

Good financial health also promotes a sense of empowerment and self-confidence. Taking control of your finances and achieving financial goals fosters a positive self-image and a belief in your ability to overcome challenges. This increased self-esteem positively impacts overall mental well-being and contributes to a higher quality of life.

Beyond the individual, good financial health can also improve relationships and social connections. Money is often a source of conflict within partnerships and families. By managing finances together, openly communicating about money matters, and working towards shared financial goals, relationships can be strengthened and trust can be cultivated.

The benefits of good financial health extend beyond mental well-being. Being financially stable allows for greater freedom and flexibility in career choices, lifestyle decisions, and the ability to pursue personal passions and interests. This overall sense of fulfilment and happiness further enhances mental health and overall life satisfaction.

In conclusion,

managing debt effectively is crucial for maintaining good mental health. By taking proactive steps to reduce debt and creating a budget to manage finances, individuals can alleviate the stress and anxiety associated with financial burdens. The impact of poor money management on mental health is substantial, but by striving for good financial health, individuals can experience improved mental well-being and a higher quality of life. Don't let debt control your life – take control of your finances and prioritize your mental health.

When we hear the likes of ex-Prime Minister Liz Truss accused of reverting to an economic theory known as trickle-down economics, what do ‘they’ mean?

What is trickle-down economics?

In its simplest form, trickle-down economics is the theory that by increasing the wealth of the rich, they will spend more money, which would trickle down throughout society, leading to more wealth for all.

How does trickle-down theory work?

The theory itself is relatively simple, with the concept being that if we cut income and corporation taxes in our society and de-regulate our financial institutions, the increased wealth of these individuals and corporations would result in the rich being able to spend more of this additional money. The rich would then, in theory, invest and spend this new excess in wealth, which would, in turn, result in an increased demand for goods and services, increasing employers’ ability to recruit more staff and offer higher wages.

In this theory, the argument presented is that cutting taxes increases the incentive to work. If workers have a lower income tax, they would then be incentivised to work longer. In addition, reducing taxes such as corporation tax should encourage businesses to invest, which would, in theory, increase wealth.

Another outcome would be that the wealthy would invest in businesses, creating new jobs and more income for those employed. If the wealth is invested in new companies, it will create new jobs and increase the incomes of those employed.

As a result of the above-referenced spending and investment, it is theorised that this would stimulate economic activity, which in turn would increase tax revenues through more income tax due to the increased jobs or higher VAT due to increased spending.

These higher tax revenues could then fund public programmes such as healthcare, education, and welfare payments to the poorer in society instead of, the higher taxation that limits the richest in our society from investing.

Does trickle-down economics work?

This is mostly subjective and down to which side of the economic spectrum you lean on. It has both its pros and its cons, and essentially, as with most things in life, it would depend on how you would be personally affected.

There are examples of trickle-down economics in practice. Famously, President Ronald Reagan and his “Reagonomics” became a beacon to those who believed in trickle-down economics when he passed two tax reform bills in the 1980s which brought tax down for higher earners from 73 percent to 28 percent, as well as reducing corporation tax from 46 percent to 40 percent. It is argued that as a result of this, the USA came out of recession in the 1980s and is lauded as an example of trickle-down economics working.

However, this paints only a small picture of that time, as in addition to reducing taxes, government spending increased by 2.5 percent a year, and federal debt in the USA tripled. Therefore, it is argued by its detractors that trickle-down economics in its purest form wasn’t ever implemented fully, and it could have been the increased government spending that, in fact, ended the recession.

There are further examples of this theory being put into practice, such as President Herbert Hoover’s Great Depression stimulus after the crash in 1929, Prime Minister Margaret Thatcher’s policies in the 1980s, and President George Bush’s Tax Cuts in 2001. So the theory has been tested, though some would argue not to its full extent and in its purest form.

In reality, however, one thing that becomes very apparent when this process is applied is that economic inequality increases. Suppose we use President Reagan’s and President Bush’s cuts as examples. According to trickle-down economics, Reagan’s and Bush’s tax cuts should have helped those at all income levels. But the opposite result took place: income inequality worsened. Between the years 1979 and 2005, the bottom fifth saw a 6% rise in after-tax household income. While this on its own seems great, it’s important to note that the top fifth experienced an 80% increase in after-tax household income. The income of the top 1% tripled, showing that prosperity was trickling up rather than down.

Why does economic inequality happen as a result of trickle-down economics?

In most cases of its implementation, the rich get much richer because they don’t want to invest their excess wealth. As a result, money is often stored in off-shore accounts to further preserve their new wealth. Furthermore, tax cuts for the richest in society don’t often translate to increased consumer spending, rates of employment, and government revenues in the long term. Inequality rises, and examples of the opposite system seem to work better with tax cuts for middle- and lower-income earners driving the economy through the trickle-up phenomenon.

In Conclusion

The trickle-down economics system does have its merits; however, in most practical examples, the successes are somewhat clouded due to the use of other measures to prop up trickle-down economics as a system. Therefore, it seems that as yet, we haven’t seen the theory work on its own, and with the recent failure of the Liz Truss & Kwasi Kwarteng mini-budget in the UK in October of 2022, it seems that this may continue until a severe shift in economics and public opinion can happen.

Jacob Mallinder – Finance Monthly

With digitalisation rapidly progressing and affecting every aspect of our lives – from the way we play to the way we pay – eCash levels the playing field for cash payers.

Much of society is becoming increasingly cashless, with the volume of cashless payments globally expected to rise by 80% between now and 2025. But it’s vital to remember that underbanked and unbanked communities don’t have the luxury of bidding farewell to physical currency. Many people around the world simply don’t have access to a bank account or a debit or credit card.

By digitalising cash, we can offer marginalised, cash-reliant communities access to online payments and enable them to participate in the world of eCommerce and digital financial transactions. It also allows security seekers to pay in cash and avoid having to provide personal financial data online.

In fact, according to our latest Lost in Transaction research study, which examines changing payment habits and preferences, 52% of consumers globally reported that they don’t feel comfortable sharing their financial details online. And 68% said they prefer using payment methods that don’t require them to share their financial details when paying.

 

Digitalising cash for online transactions

 

eCash, which enables cash to be used for online transactions, provides access to the digital world to cash payers and security seekers. Popular examples include the prepaid solution paysafecard as well as the post-paid barcode solution Paysafecash.

 

Paysafecard comes as a voucher with a 16-digit code that can be purchased in various denominations at petrol stations, supermarkets and convenience stores. The balance can then be redeemed by entering the code at the online checkout. This solution is particularly popular in the world of online entertainment and includes a spending control aspect that appeals to consumers as they can only spend the amount they have previously purchased with cash.

Paysafecash payments are made by generating a barcode during the online checkout, which can then be scanned and paid for in person at a nearby payment point. This solution has become increasingly popular for online transactions such as rent and bill payments, loan repayments, cash deposits into wallet-based financial services as well as a cash-in/cash-out solution for banking.

 

Paying for essential services in cash

 

When it comes to rent, utilities, loans and countless other essential services, cash is still the most available and most immediate payment method for unbanked and underbanked communities.

 

While many are revelling in how online payment platforms have simplified the process, this same proposition presents a huge hurdle for typically low-income groups who must find a way to pay for these services using cash funds without the luxury of a simple bank transfer or credit card.

 

eCash can facilitate this process, boosting financial inclusion and reducing missed payments. It allows cash-reliant communities to enjoy all the benefits of paying for services online without having to become banked. They can simply select “cash” as a payment option on the checkout page, generate a barcode and settle the amount in cash at a nearby payment point.

 

Bridging the gap between cash and banking

 

There are a number or reasons why people remain unbanked or underbanked and the high cost of traditional banking has certainly played a major role. While digital banks pose an attractive solution in terms of being less cost-intensive, they are still out of reach for anyone who relies heavily on cash.

 

Implementing eCash helps bridge that gap. It makes digital banking more accessible for cash-reliant consumers, providing them with an easy solution to cash-fund their accounts. Similar to choosing cash as a payment method during checkout, in this case, a barcode for a cash deposit can be generated in the digital bank’s mobile app. The barcode is then scanned at a payment point, the consumer pays the balance in cash and the amount gets credited to their digital bank account.

 

This also works for other financial service providers that utilise eCash for cash-funding their accounts, providing users access to any number of app-based budgeting and money management tools, setting up savings pots, or transferring money easily to friends right from their phone.

 

Beyond digital banking, eCash can also enable greater access to cash services in partnership with traditional banks. With bank branches closing and the availability of cashpoints decreasing, eCash payment points at participating retail locations can also be used to withdraw money. To do so, users would follow the steps above, generating a barcode in the banking app for the desired amount.

 

Paying with cash online

 

Taking it a step further, eCash doesn’t need to be limited to merchants and service providers who have integrated it as a payment solution. In combination with digital wallets like Skrill and NETELLER, eCash can open the door to online shopping in general.

 

Users can simply choose paysafecard or Paysafecash to deposit money into either of these digital wallets. This, in turn, allows consumers to use their cash funds with merchants that have integrated Skrill or NETELLER. They can also use prepaid credit cards available through these digital wallets to make payments literally anywhere.

 

Making progress inclusive

 

While there is no stopping digitalisation, it doesn’t have to go hand in hand with financial exclusion or remove cash from the payment mix. eCash is a powerful tool to mitigate the challenges of an increasingly cashless world, providing those who continue to rely on cash the ability to pay online for anything from online shopping to essential services.

 

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