Multiple Credit Applications: How Many Credit Inquiries Are Too Many?

Applying for a credit cardhome improvement loan, or will generally include a credit check so that the lender can assess your creditworthiness and any risks associated with lending to you. These searches, known as a hard check, will leave a mark on your credit file, so it’s sensible not to submit too many credit applications at once, but this doesn’t mean you can’t shop around.

What is a credit application?

A credit application is when you apply for any form of credit, such as:

Credit card
Secured Loan
Personal loan

Your potential bank or lender will ask for your consent to run a credit check as part of the application process.

When should you apply?

Before you apply for any type of credit, it’s good to check your credit file to ensure that all the information is accurate, up to date, and free of errors. Some of the mistakes that you need to look out for are:

Missed payments on your credit accounts
Wrong addresses linked to your name
Credit applications you haven’t made
Payments that aren’t recorded
Debts that are already paid yet inaccurately recorded

What information is in my credit record?

Your credit report will contain information about your financial history. This comes from banks, credit card companies and building societies you have borrowed money from in the past or currently owe to. There will also be information from publicly available sources, from your mobile phone provider and others. Your report is likely to have the following information:

  1. Your name, current address and other personal details
  2. If you are on the electoral roll at your present address
  3. Joint financial products you currently hold (such as a current account)
  4. How much credit you have outstanding
  5. Missed payments on past or existing accounts
  6. Late payments on past or existing credit cards or unsecured loans / secured loans
  7. If you joined an Individual Voluntary Arrangement (IVA)
  8. County Court Judgements (called “Decrees” in Scotland) filed against you, bankruptcies and home repossessions for six years after they occur
  9. If you have ever moved away whilst owing money

Why are too many applications bad?

When a lender obtains your credit record, they will review how you handle your finances. Each credit check is recorded on your credit report, whether you get accepted or rejected.

Every credit application you’ve made will be apparent to the next lender or creditor you apply. They can view if you’ve been rejected or approved before.

Lastly, making numerous applications over a short time, it could appear to lenders that you are desperate for a loan or credit, which unfortunately may decrease the likelihood they will lend to you.

Money Transfer Credit Card: The Benefits That You Can Get

Money transfer credit cards can be a helpful way to transfer cash into your current account for whatever reason. Some can even charge you 0% interest on the money you transferred for a set period. Read this guide to learn more about how money transfer credit cards work.

What are money transfer credit cards?

A money transfer credit card is a type of credit card that allows you to transfer money straight to your current account. It works the same way as a balance transfer card. However, the transfer goes to your bank account instead of transferring the outstanding balance between credit cards. This can be useful for clearing an overdraft or if you need access to cash.

How does it work?

If you have a money transfer credit card, you’ll have the ability to transfer cash from your credit card to your current account. During any interest-free period, you won’t have to pay any interest on any money you transfer; however, you may have to pay for the money transfer transaction known as the money transfer fee.

What are the benefits of a money transfer credit card?

Money transfers credit cards can help pay off your overdrafts or loans, although it’s essential to ensure you pay off your balance before the interest-free period ends. They can also be useful when wanting to spread the cost of a purchase that can’t be paid by a credit card.

How much does a 0% transfer card cost?

You do not have to pay interest on a 0% transfer card until the interest-free period ends and your outstanding balance remains unsettled. However, you have to pay a one-off fee for processing the transaction to transfer the money to your bank account. This can cost around 2%-4% of the amount you initiated to transfer.

For instance, if the transfer fee costs 3% on a £2,000 transfer, it will cost you £60.

Keep in mind that a money transfer credit card is a type of credit card; hence, they can have similar charges. We’ve created a guide to help you understand credit card charges even more.

Is a money transfer credit card right for me?

To help you decide whether a money transfer card suits you, scrutinise the following factors when comparing money transfer credit card:

Interest-free period

Check on the length of the interest-free period and try to compare which one gives you more time to pay off your balance. You have to ensure that you can afford to pay off the amount before the agreed 0% period ends.

Money transfer fee

It would be best if you considered checking the fees for transferring money to your bank account. The usual fees you can get range between 2% to 4% of the amount transferred.

Time frame for transfers

Several money transfers necessitate you to make a transfer within 60 days of the receipt of the card. If you fail to do so, you could be at risk of losing the 0% introductory rates.

Fees or charges

When choosing the right card, you must understand the fees for transactions and terms. These include charges for transactions outside the UK. You should also check on the costs for exceeding credit limit or fees for foreign usage.

Credit Card Charges: What are they and How to Avoid them?

person using laptop and holding credit card

Before having your very own credit card, it might look like an absolute magic trick seeing someone swipe through the register and walk away with their bag of purchase. It may look simple but credit card charges need a deep understanding for you to avoid it. This guide will show you the different credit card charges and how you can shun them.

Interest Charges

Since credit card allows you to use the credit limit set by your card provider, this acts as a loan. This means that using your credit card means borrowing money which comes with interest charges.

For instance, if your credit card outstanding balance amounts to £100 with an APR of 20%, you’ll likely get an interest rate of £20 per year.

To shun this interest, you must pay off your debt each month. When not possible, you can pay lesser by checking for a card that carries a lower APR.

Fees For Breach Of Terms

Late Payment Charges

Your credit card agreement includes terms for minimum repayments each month; hence, non-payment or delayed payment will be charge for a fee costing £12. If you want to avoid delayed payment fees, you can set up a direct debit to ensure that you do not fall into arrears.

Besides, if you miss payments, this can affect your credit rating which compels your card issuer to increase your interest rates. They can also withdraw any introductory 0% APR deals available.

Fees For Exceeding Credit Card Limit

The credit limit set by your provider is the absolute amount that you can spend on your card. Once you exceed to your limit you’ll be charged approximately £12.

You can prevent exceeding beyond your limit by monitoring your spending and checking your card limit. You can also ask your provider to raise your limit, but you should make sure that you can afford to pay for it.

Dormancy Fees

Some credit cards and store cards impose charges for inactivity. This can happen if you haven’t been using your card for too long say for instance for more than a year. This fee is called dormancy fees. If your credit card charges for dormancy fees, you might consider cancelling the card instead.

Card Charges

Cash Withdrawals

Withdrawing cash from your credit card bears charges which are as follows:

Withdrawal fee – This is usually around 3% of the amount that you take out from your credit card, though there’s normally a minimum charge amount of a few pounds.

Higher APR – The interest rate fees on cash advances is extremely higher than your APR on purchases. This is frequently around 27.9%, but are sometimes greater.

Immediate interest – each time you withdraw from your credit card, you’ll be automatically charged with the interest based on the amount that you took out.

Balance Transfers

When transferring balance or money, you’ll be charged for the transfer which usually costs around 2.5%. This means if your transferred £2,000 to a card with a 2.5% transfer fee, it would costs you £50 to initiate the transfer.

You can save when transferring balance by checking for cards with no fees for transfers or those with lower costs.

Spending Abroad

Using your credit card abroad could carry the charges below:

  • Loading fee which is approximately 2.99% each time you spend on the card
  • Charges for exchange rate which are usually less competitive as compared to other holiday money
  • The interest each time you take out cash from your card through the cash machines or ATMs
  • Withdrawal fee that can cost around 3% of the amount you took out.

Basically, you’ll usually have 56 days before interest charges apply if the card is used for purchases at your own country.

On the contrary, cards that are intended for foreign usage can bear no fees for cash withdrawals.

Here’s how you can use a credit card abroad

Monthly and Annual Fees

Some credit cards, such as rewards cards, can bear charges that you need to pay monthly or annually, which can be between £12 to £150 a year.

In case, you have a monthly fee, this will be included in your credit card bill.

Getting A Refund

If you’re charged fees incorrectly, you can contact your credit card provider right away and secure a refund. Check on how you can reclaim for card charges on our guide.

Using A Credit Card For Interest-Free Purchases

0% credit cards allow you to make purchases without interest charges for a set period. Many cards in this niche help you elude interest on large purchases. This means you do not have to pay interest as long as you pay off the outstanding balance before the 0% introductory offer ends. These types of cards are also frequently referred to as interest-free credit cards.

How does an interest-free credit card work?

Interest-free credit cards will not charge you interest for a fixed term. This period is called the ‘interest-free period’.

For instance, a card with a 20-month interest-free period won’t charge you any interest for that time, as long as your minimum monthly repayments are made. If you fall behind on repayments, you’ll start paying interest on your spending.

Why should I get a 0% credit card?

0% credit cards are helpful when making large purchases. They allow you to spread the costs and pay in instalments. Essentially, you can borrow money for free, as long as you are in a position to keep up with minimum monthly repayments and pay off the balance before the interest-free period ends.

What are the costs of a 0% credit card?

Interest-free credit card providers don’t typically charge fees. However, you’ll start generating interest charges each month if you fail to settle the balance fully at the end of the interest-free period, which could quickly become costly.

How do I choose a 0% credit card?

When comparing 0% purchase credit cards, generally, the longer the interest-free period, the better, as this will give you more time to pay off the balance in full. The deals available to you will depend on the provider’s current deals and your own credit history.

It’s also essential to compare the representative APR to see what interest rate the providers will charge when the interest-free period ends.

What if my application is turned down?

If your application is turned down for any reason, it may be worth shopping around and checking which cards you’re likely to be accepted for. However, it’s a good idea to wait a while before applying for another card and not to make multiple credit applications.

Check your credit file to ensure that all data posted is accurate. If there are any inconsistencies, you can contact the credit reference agencies before trying your luck with another credit card application.

You can check your likelihood of getting a card by checking your credit report. It does a “soft credit search” that won’t display on your credit file and doesn’t harm your score.

Many card providers have specific standards to suffice, including:

Minimum wage
Good credit score

Make sure you satisfy these criteria before you try applying to reduce the risks of getting rejected.

Credit Card Limits: How Does It Work?

Your credit limit is the absolute maximum value that your credit card issuer allows you to borrow. You won’t be able to get any more credit beyond this value without being charged fees.

What is a credit limit?

A credit limit is the maximum amount of credit you can borrow from a credit account, such as a credit card. For instance, if your credit card limit is £1,000 and you have used up £500, you technically have £500 you can still borrow, although it’s advisable to stay well within your credit.

Ways to check your credit card limit

You can check the credit limit that your provider has set for you by:

  1. Signing in to your account online or using its mobile up when available
  2. Contacting your card provider in writing, by phone or by mail
  3. Checking your latest credit card statement

Additionally, when you apply for a new credit card, the card issuer will inform you about the absolute limit of your card before conducting a full credit review.

How is your credit limit calculated?

Credit card companies will determine your credit limit through a process called underwriting. This is where they check a few of your credit details. What they check can alter depending on the company, but it generally includes factors such as:

  1. Your income
  2. Your credit score
  3. History of any previous credit cards
  4. Debt-to-income ratio and other details.

How does your credit rating affect your card limit?

Your provider will run a credit review when you apply for a credit card. There are two different types of credit checks providers can perform on you, a soft credit check and a hard credit check.

Soft credit check: Your card issuer or institution will check some of your personal details without leaving any mark on your credit report.

hard credit check: Most providers conducts a full credit check to determine whether they will approve or decline the limit that you prefer. This is where they look at your entire credit history. This will leave a mark on your credit report that lasts six years. Too many hard credit checks in a short space of time can damage your credit score.

Information that providers will check

When your provider scrutinises your credit file, they will check for:

Outstanding debts: they’ll check for debts and their status. This can include your mortgage, credit card debts, and any loans you’ve taken out.

Missed payments: they will also check your repayment history to see if you missed any payments or have fallen into arrears.

Available credit: they’ll check if you have any overdraft or another card.

Typically, the credit card company is evaluating how reputable you are as a borrower. If you’re allowed a bigger credit limit, it indicates that the provider is positive that you stay on top of your payments.

After evaluating all these factors, your credit provider will determine a limit for your credit account. Performing well in a credit check could give you access to a larger credit limit.

Can I raise my limit?

If you’re able to keep your payments regular and pay your balance before it’s due, you can request to raise your credit limit. Most institution reassesses your credit limit every six months. Some may instantly raise your limit while others have to scrutinise if you’re eligible for a higher credit limit. Your provider might have reached out to you and offered the option to raise your limit if you’re qualified.

On the contrary, they can also reduce your limit due to the following circumstances:

  1. Exceeding your credit limit
  2. Missing the minimum repayment
  3. Your credit record is drastically affected by other debts
  4. Your card is not often used

Should I use my entire credit limit?

Despite being able to use all your credit limit, you shouldn’t do. This is because constantly going near your credit limit suggests to lenders that you may be struggling with money.

Eventually, this can weaken your credit score.

It’s said that the ideal amount of your credit limit you should use is around 30%, and you should rarely exceed 50% of your limit if you want to ensure that your credit score doesn’t drop.

So, for example, if you have a credit limit of £1,000, you want to use around £300 ideally, and avoid using more than £500.

Can I go over my credit limit?

You can exceed your credit limit, but you’ll normally get charges when going over your card limit. This can result in you not being able to use your credit card until you pay off the outstanding balance.

If you exceed your limit, it can:

  1. Reduce your credit card limit
  2. Lose any 0% credit card offer you have on your card
  3. Accumulate a higher APR on your card
  4. Have a negative record on your credit


Credit Card Cash Advance: Can I Take Cash From A Credit Card?

As well as being able to pay for items and transfer a balance, you can use your credit card to withdraw cash. This is called a cash advance.

Although useful in certain situations, taking out a cash advance can be expensive, as there will be a lot of charges you’ll have to pay when doing so. Learn everything you need to know about cash advances with this guide.

How much cash can I withdraw from my credit card?

When you take out a cash advance, think of it as loaning yourself cash from your credit card. When doing this, there will be a maximum you can take out, which will be set by your credit card provider.

This cash advance limit will be separate and likely lower than your credit limit.

Your credit limit is the maximum amount you can borrow from your credit card at one time. Your cash advance limit is the amount you can withdraw from your credit card.

Plus, when taking a cash advance from a cashpoint, you will likely also be set an independent, daily withdrawal limit.

Get in touch with your provider to find out the cash advance limit on your credit card and the charges for certain transactions.

What are the costs of using a cash advance?

Taking out cash from your credit card is an expensive way of borrowing, as there are multiple fees you’ll have to pay. These fees include:

Daily interest

Each time you take out cash from your credit card, you will accumulate daily interest. This charge starts when you take out the money until you pay the outstanding balance.

Unlike other ways of borrowing from your credit card, there will be no interest fee period, meaning you’ll build up more interest over a shorter period. The APR rate for cash advances will also be different from your other services and is likely to be a lot higher.

Cash advance fee

You will be charged a fee when taking out a cash advance. This fee will either be a percentage of the amount you’ve advanced or a flat rate of £3, whichever one is larger.

The percentage charged is usually 5% of what you’ve advanced; however, depending on your card provider, this can be larger.

ATM and bank fees

In addition to the fees charged by your card provider, you may also be charged a separate fee from the bank or cashpoint you used to make your advance.

Where can I withdraw cash from my credit card?

There are multiple places where you can make a cash advance, with the most common and convenient places being:


You can personally request a cash advance at the bank or credit union where you got your card. There are likely to be separate fees charged for this service.

At a cash point

As long as you have a PIN for your credit card, you can visit a cash point to withdraw cash from your card.

You’ll likely be restricted on the amount you can take out a day when using a cash point.


If you have an account with the bank that issued you your credit card, you’ll be able to use their website or banking app to request a cash advance.

Should I avoid taking our cash from my credit card?

Cash advances can be a useful way to get the money that you may need quickly. However, you need to understand the risks when doing so.

If you don’t have a plan to repay the advance quickly, you can accumulate a lot of interest which can contribute to a large amount of debt.

Taking out a cash advance adds to your credit balance and could increase your credit utilisation ratio. To maintain a good credit score, you must ensure you’re using under 30% of your credit card limit.

Although taking out a cash advance can’t be seen on your credit report, it will start to harm your credit score if doing so tips you beyond this 30% limit.

Because of the fees, charges, and high-interest rates, taking out a cash advance could cost you a lot of money. Other options are available if you need cash or financial support, such as borrowing from friends and family, using lending circles, or considering debt consolidation loans.

A Complete Guide to Pension Jargon

With many financial products, there’s often a lot of jargon and specialist terms associated with them that can be tough to understand for the average person.

One such product is your pension.

Not being able to fully understand the terms, metrics and language used to talk about your pension can put people off from engaging with this crucial financial service. In fact, research suggests 70% of young people don’t understand their pension, and this contributes to around 24% of those under 35 not having any pension savings at all.

It’s important to get on top of your pensions while you’re still young and have your full potential earning years ahead of you.

Here’s a list of common phrases and jargon within the pension industry explained to help you better understand this financial service.

The types of pension

Before going in-depth on some key terms and pieces of pension jargon, it’s wise to first understand the three main kinds of pensions available in the UK.

1. State Pension

You’ll receive this pension as long as you’ve paid your national insurance contributions over the years. Once you reach the state pension age, which is currently 66 but set to rise to 67 by 2028, you’ll be able to start claiming weekly payments from the government.

If you get the full amount of your state pension, you’ll receive £9,627 a year.

2. Workplace Pension

Every employer needs to put staff that are eligible into a workplace pension. A workplace pension is a pot of money your employer will help you fill-up. When under a workplace pension, you’ll pay a small percentage of your wages into it, and your employer should add more.

The amount they add will depend on your scheme. Some will match your contribution, whereas others may pay even more than this.

With some workplace pensions, your pot will be invested to grow over time. Depending on when you joined the scheme, you can access your workplace pension at either age 55 or 57.

3. Personal Pension

This is similar to a workplace pension and functions the same way. You pay a certain amount from your wages each month. However, instead of being set up by your employer, you do it yourself.

You can put in as much or as little each month with this pension type, making it a flexible pension option.


Additional voluntary contributions

Any additional money you pay into your pension beyond what’s required from your pension plan. So if you’re paying 5% into a workplace pension and decide one month to pay in 10%, that extra 5% is an additional voluntary contribution.

Annual Allowance

This is the maximum amount of your pension savings you can get tax relief on each year. This is based on your contributions, anything your employer has put in, and contributions made by someone else.

The current annual allowance is £40,000. If you exceed this amount, a tax charge is made that takes back any tax relief.


This is a regular income you can buy with your pension savings. Getting an annuity will ensure you get an income for the rest of your life. Some annuities may also continue to pay your spouse or children in the event of your death.


Your pension savings should support you until your death. Once you no longer need your pension, you can pass on what’s left behind to a beneficiary – someone or something that you want to receive the money.

A beneficiary can be a person, a group of people, a charity, a company, and more.

Cash Balance Pension:

A type of pension plan where your employer agrees to pay a specified pension pot amount, which is calculated based on your yearly salary, plus interest. This is usually a set percentage.

The benefit of this type of pension is that the contribution limits will increase with age.

Contracting Out

This is where you opt out of your state pension. By doing this, it means you won’t have to pay as much national insurance and could instead use the amount saved to put into a personal or workplace pension. This is only available in Final Salary schemes, where your retirement income is based on your salary and how long you’ve worked at your employer.


This is someone who is financially dependent on you, such as a marriage partner. You may need to provide proof of this dependency when setting up an annuity.

Guarantee period

This is an option when taking out an annuity.

This guarantee period is a timeframe for when your income payments will be paid for a set period of time, even if you die before this period. If you do die during the guarantee period, your dependent or beneficiary will get your payments until this period is over.

Pension Commencement Lump Sum

This is the maximum amount you can take out of your pension and is currently tax-free. This is up to 25% of your total pension fund, and you can do what you see fit with it.


A SIPP is a type of personal pension where you have control over where you want your pensions to be invested and how much. This is different to other pensions because usually, a fund manager will invest your pension on your behalf.

Using a SIPP means that the risks are much higher as you’re responsible for all your investments, even if they go wrong. A SIPP may also have higher charges.

Transfer value

This is the amount of money you will receive deducting fees and charges if you decide to transfer your pension funds elsewhere.

Identifying a Pension Scam

Pension Scams

New pension reforms were introduced on 6th April 2015 which will change the face of retirement income in the UK forever.

It allows citizens better control and flexibility to access their pension pot. But a lot of questions still hang in the air as people are not fully aware of the changes.

Fraudsters see this as a perfect opportunity and time, to strip the hard earned money off gullible retirees.

Pension Scams of multiple varieties are on the rise in the UK.

From an email that pops out of the blue, promising incredibly high returns from ‘creative’ investment options, to a phone call that lures you into believing that you can get access to your pension pot before the age of 55, there are many ways in which a pension shark may approach you.

The only way you can protect your life savings is by being aware and spotting a scam a mile away.

The Modus Operandi

Most pension fraudsters will try to entice you into transferring the funds in your pension pot in exchange for lucrative returns on bogus investments.

You may receive an email, a phone call or a conman may turn up at your doorstep.

The person will look like a legitimate representative of a pension company and will sound extremely convincing.

They may even have a very attractive website that may have the words, ‘Pension’ or ‘Wise’ in their name, to fool people into believing that they are a part of the government Pension Wise service.

You are more likely to be contacted by scammers if you are nearing retirement.

The Common Ones

Over the years, many retirees have been scammed off their hard earned money by scammers who keep coming up with innovative methods.

These are some of the common ones that you may be approached with:

  1. Free Pension Review: This is one of the most commonly used methods by fraudsters. You may be contacted by companies that claim to work on behalf of the government offering you free guidance on investing your pension funds. Typically, retirees are asked to move their funds into self-invested personal pensions (SIPP) with unregulated investment options like forestry, wineries, storage pods, cement factories in Nigeria, properties in overseas destinations like Costa Rica and rainforest harvesting.
  2. Pension Liberation Plan: The only way you can get access to your pension funds before the age of 55 is if you are batting ill health. Fraudsters who offer ‘Pension Loans’ or ‘Pension Liberation Schemes’ hide the fact that you may lose up to 70% of the liberated pension amount as taxes by the HMRC. This will be in addition to up to 30% charges by the fraudsters themselves leaving you with virtually nothing.
  3. Common Names: These are some of the terms that should immediately draw a red flag. One-Off Investment Schemes, Legal Loopholes, Government Endorsements, Overseas Investments and Creative Investments. The general thumb rule is to avoid any investment option that you receive via cold-calls.

Protect Yourself

It is important to know that the government will never contact you or encourage you to make investments in get-rich-quick schemes.

So, if you receive a cold-call from someone who claims to represent or work on behalf of the government and asks for details about your pension pot, do not reveal the information. The best you can do is hang up. Alternatively, you can ask them if you can call them back.

Most fraud companies do not want you to call them back and will refuse.

If they agree and provide you with a phone number, call the Financial Conduct Authority (FCA) on 0800 111 6768 to verify if the person or company calling you is legitimate.

The FCA register has details of all licensed pension providers. Call back the company or person on the number provided in the FCA register and not the one they provided you with.

Do not be rushed into making a decision no matter how lucrative the investment option seems or how urgent they make it appear to be.

Always seek the advice of an independent professional before you agree to transfer your pension pot to any SIPP.

What is a Pension?

Retirement may seem a long way off, and a pension might not seem like the most pressing financial consideration, but investing for retirement at any age is very important.

Understanding Pensions, Annuities and Retirement Saving Plans might also seem overwhelming at first, but we’ve put together some jargon-busting information below on the various types of pensions to help.

Simply put, a pension is a type of long-term investment plan which allows you to save money for your retirement years. Depending on the amount you want to save and access, pensions can be a tax-efficient form of savings when compared to other options available.

There are a range of options available when you are able to access your pension pot. For example, you can either opt for a fixed income, or a flexible taxed income, or take out some or all of the money as a cash lump sum.

Up to 25% of the money in your pension can be taken as a tax-free cash payment. When you can access the money saved depends on the specific rules of your pension, usually, you will need to be at least 55 years old.

You can also sell the remainder of the pension to an insurance company in exchange for a regular fixed income that you will receive until your death. This is called an Annuity.

There are three different types of Pension schemes – your employer may offer some, and others can be set up by you, and you can invest in multiple pension schemes at the same time.

State Pensions

The State Pension is a payment that the government will make to you on the basis of your National Insurance Record once you attain payable age.

The current state pension eligibility age is 66 years old for men and women, for those born after 5 April 1960 there will be an increase to 67 years old.

To be eligible for State Pension, you must have a minimum of 10 qualifying years where you make National Insurance (NI) contributions or are deemed to have paid it.

The basic state pension in the tax-year 2022-2023 is £185.15 a week. The amount you receive may differ depending on individual circumstances.

Company Pensions

All companies are required to offer a workplace pension. Employees can choose to join a company pension scheme and make contributions towards it every year. In addition, employers will also contribute towards your pension scheme.

There are two types of company pension schemes.

Final salary scheme: The final salary scheme is also known as a defined benefit pension. It is dependent on your final salary and the number of years you have enrolled in the pension scheme.

Money purchase scheme: Money purchase schemes are also known as defined contribution pension schemes. Typically, you and your employer will make contributions into your pension pot. The amount you contribute, returns on the investments made with the pension funds, and any charges deducted when you access the pension, will all determine the pension that you receive when you retire.

Each one of these schemes has its own perks to offer, and your choice should depend on your immediate and long-term financial goals.

Individual Pensions

Many financial services companies offer Individual Pension schemes where you control the amount you invest. These are not connected in any way to your employment status.

There are three types of individual pensions.

Personal pensions: often used as a catch-all term personal pensions typically offer lower charges than stakeholder pensions but don’t have the same level of control over the investment options available to customers as self-invested pensions.

Stakeholder pensions: Similar to personal pensions, stakeholder pensions are ideal if you are self-employed or can save only small sums of money at this point in time. Some of the benefits of stakeholder pensions are limited charges and penalty-free transfers to other pension plans.

Self-Invested pensions: A self-invested pension scheme provides you greater control over your investments. These are usually chosen by people who have a fair amount of financial acumen and like to make their own investment decisions.

What is a Standing Order?

A standing order is a method of establishing a regular, fixed payment from your bank account.

You can schedule a payment to be taken at a determined regularity (for example, the 3rd of every month) and for a set amount of time, such as three months. Your payments will consist of money that is set at an amount that was chosen by you.

You can usually set up a standing order by accomplishing a standing order form and submitting it to your bank or arranging the standing order over the phone, in the branch, or by using online banking.

What is the difference between a standing order and a direct debit?

A standing order is basically an instruction to your bank, whereas a direct debit, on the other hand, allows a company to take money from you. You are the solely the only person who can change the payment amount or the date on your standing order. This is the principal difference to a direct debit, where these circumstances can be changed by the organisation or the person that you are paying.

What if I do not have enough in my bank account to pay for a standing order?

If there is not enough money in your account to pay for a standing order, you may be allowed to take advantage of a buffer zone, if your current account includes one. This is essentially a small interest-free overdraft that your bank would not charge you for if you sneak into it.

Your bank or building society may refuse to pay for the standing order if you exceed the buffer zone. They may also charge you a fee. You may also be asked to pay for additional charges if paying for a standing order pushes you into an unauthorised overdraft.

If you already know beforehand that you would not have enough money in your bank account, the safest thing to do is to arrange an overdraft that is temporary with your bank in order to pay for the standing order. Alternatively, you could attempt to negotiate a later payment date with the person in question.

If you regularly miss standing orders, you should consider paying by a different method or changing payment dates.

How long will it take for a standing order to reach the recipient?

The Faster Payments service can be used to make standing orders which means that the payment can be received on the same day, or the next working day if the payment is made on a bank holiday or a weekend. If your bank does not make use of Faster Payments, it may take three working days for a standing order payment to transfer from one bank account to another.

How do I cancel a standing order?

You are the only person that can opt to cancel a standing order. You can cancel a standing order at any point in the branch, via secure online banking, or over the phone or. You will have to make sure that you inform the person or organisation that is due to receive the payment before you do, as you could incur penalties or fees for non-payment. Remember that if you do not pay a bill on time, this could also have an effect on your credit rating and appear on your credit file.