With more people going to university than ever before, finding sources of funding for their education has become something of a dilemma. As a result, students have been forced to take out large loans in order to cover the cost of their tuition fees and to pay the price of living in a university city, which is often rather high.

As well as taking out loans, many students receive a maintenance grant. This is an amount of money, received from the government, on an income assessed basis, that is meant to help towards living expenses while at university. This, coupled with the money from the Student Loans Company, means that students have a lot of cash coming into their accounts at the start of term. However, by the end of term, many students find themselves considerably overdrawn. To accommodate this fluctuation in individual student affluence, many banks offer specialised student accounts, coupled with a number of incentives.

HSBC have offered students things such as MP3 players and CDs to students that sign up with them. Natwest offer a free Young Person’s Rail Card for five years, worth . This sort of thing certainly does the job of attracting students to these banks. However, is it really the free gifts that students should be looking at when considering who to bank with? Probably not.

The level of interest-free overdraft offered, should probably factor more prominently in the decision making process. If this is the primary consideration, then Halifax comes out as the clear winner, with an interest free overdraft of up to 0 in the first years. There are no freebies with this account but the overdraft is more than double what a lot of banks offer. Thrifty students will see an opportunity here.

Open a high-interest online savings account and transfer your overdraft money into there. It means the money will be earning for you but it is not quite as inaccessible for you if you need it, compared to how it would be if you had put it into an ISA. In this way the interest you collect will be reward enough. Alternatively, collect your free gift and do exactly the same with the smaller interest-free overdraft offered by the other banks.

As some of you may be aware, it was recently announced that over one million incorrect tax demands where sent to the UK population, resulting in hundreds of millions of pounds in excess tax being received by the authorities.  While it will take some time, the majority of those who received incorrect tax demands should see their over payments returned, although there are many suffering who have no idea.  Do you know your tax code and what it means?

The UK has a fairly complicated income tax systems which has been in place for many years, and while there have been attempts to simplify the system they have made little real progress.  Depending upon your age, employment record and marital status to name but a few, you will receive a tax code in relation to income tax.  Different tax codes will allocate certain tax allowances and tax rates to your income, with the income tax element collected at source - i.e. through the PAYE (Pay As You Earn) system.

Have you checked your Tax Code?

Do you know what it is and what it should be?

Surprisingly enough, the majority of the UK working population have no idea what their tax code relates to, and even if it is correct.  There are many sites on the internet which will give you the details of each different tax code, and the one which best suits you own situation.  It has be shown that many UK workers have been on the wrong tax code for years, resulting in massive over payment of taxes, often for long periods.

If you are able to prove that you have been overcharged and should have been on a different tax rate, there is every chance that you can reclaim the over payments.  Rather than trivial amounts, any long term over payment could result in the return of thousands of pounds - something which no doubt you could put to better use!

If you are in any doubt about your tax situation, and whether you may have been overcharged, there are masses of accountants online to assist.

It may not be something that we think about a lot but interest rates actually have a massive impact on all of our lives. Whether you live in a heavily mortgaged house, have a large amount of savings stashed away or find yourself somewhere between these two extremes - interest rates effect all of us. Recently, they just seem to keep rising and rising. On 7th July 2007 the Bank of England increased interest rates by 0.25% to their current level of 5.75%, the highest rate of interest for the past six and a half years.

If you have a mortgage of around ,000, which is about the average level for home owners in the UK, you will be left paying an additional two hundred pounds per year. As a proportion of your whole mortgage payment it may seem insignificant but it is actually a fairly large increase for mortgage payers to face, especially those that have opted to pay interest only. To make matters worse, this is just the latest in a long line of interest rate rises, which have seen the average monthly mortgage payment increase by around since last August.

On the flip side of the coin (no pun intended), the rise in interest rates is actually a good thing for savers. If their bank does decide to pass the increase on to their clients then they will see the interest that they collect from their savings each month, increase. As it is a percentage increase, the more you save, the more you will benefit from the latest interest rate rise.

People at the Bank of England seem to suggest that inflationary pressures remain high. However, most analysts believe the Bank should wait for the latest increase to take effect, before deciding to elevate interest rates even further. They warn that any further rise in interest rates could leave borrowers unable to make their payments, resulting in them losing their homes. This could be just as bad for the British economy.

The Bank of England, occasionally referred to as ‘The Old Lady of Threadneedle Street’ or even just ‘The Old Lady’,  is the central bank of the United Kingdom. One of its many functions is to be the banker and debt manager of the British government and it was founded for this purpose in 1694 by Scotsman William Paterson.

It started with just seventeen clerks and two gatekeepers. However, since then the Bank has progressed and its roles are now many and varied. The Bank of England has had an interesting history, moving to Threadneedle Street in 1734, leaving the gold standard in 1931, being nationalised in 1946 and gaining independence in 1997. Mervyn King is the current governor of the Bank of England, he succeeded Sir Edward George in June 2003. Andrew Bailey is the current chief cashier, Merlyn Lowther was chief cashier before Bailey, and was the first woman to hold this position in the whole of the Bank’s history.

The role of the Bank of England is to decide the monetary policy of the United Kingdom through the Monetary Policy Committee. The most famous role of the Bank of England is to set interest rates. This effects the gains of saving and the costs of borrowing. Setting interest rates is a major tool used by the Bank to ensure rates of inflation do not rise out of control, which could lead to hyperinflation and the collapse of the British economy. It is worth noting that this is no small task, it was hyperinflation in the Weimar Republic of post-World War One, Germany that led to the global Great Depression of the 1930s.

As well as setting interest rates, the Bank of England is responsible for issuing notes. Up until 1855 each note had to be signed by a cashier. The bank notes must be extremely hard to reproduce to prevent forgeries from entering into the economy without anyone realising. In fact, during World War Two, the Germans had planned to drop £500,000 of counterfeit money into Britain to destabilise the economy. This serves to highlight the importance of the Bank’s role.

As we continue to see UK base rates rise still further, the squeeze on income has never been tighter for many, with a larger and larger percentage of regular income going towards servicing debts.  For many people their credit card has become one of the main worries, with those unable to pay off their monthly spending beginning to suffer.  Are there any ways to alleviate the strain?

While the debt will need to be paid in full at some stage, there are ways in which the mounting interest charges can be reduced, and in many instances actually halted.  The process known as “credit card surfing” has been around for some time, although it is surprising the amount of people who have not heard of it, or do not use the process.  In deed the term “credit card surfing” does not really highlight the serious nature of the action, and the potential for great savings.

Even now with interest rates as high as they are, there is still massive competition in the credit card sector and while many offers have come and gone, there are still some very attractive promotions around.  It is still possible to transfer your balance to a new card, and take advantage of interest free periods up to a few months.  However, many credit card companies are now offering a fixed low rate on your transfer balance until the balance is paid off, leaving new spending on a “standard” interest rate.

As the credit card industry becomes ever more competitive the need to entice new customers with promotions has never been greater.  Many people seem to think that the savings will only equate to a “few pounds”, when in reality it can be much much more.  In this day and age every penny really does count, and you would be foolish not to look into the offers available.

Do not let the financial companies take you to the dry cleaners, and ensure that you are in full control at all times.

While the UK is currently in the grip of the banking charge compensation issue, it seems that there may be a knock on effect to worldwide banks.  Current estimates indicate that thousands of UK banking customers have successfully applied for the repayment of millions of pounds in “over charges”, with banks often shying away from court, and settling “on the steps”.  However, there have also been a number of high profile cases lost in court for various reasons.

It is now believed that banking customers in countries such as South Africa, Australia, Israel and the Czech Republic have started to revolt, with many making official complaints about their local charging structure.  In fact the Israeli government have appointed the country’s Central Bank to regulate the bank charging structure of the country, with changes not too far away.

The UK situation has received much press worldwide, and it appears that this has been the seed for the ongoing revolt.  As more and more people take a hands on approach to their banking, weird and wonderful charging mechanisms are being revealed.  For many banking customers around the world it has been a real eye opener to see what amount of their income actually goes on charges. 

Whether the authorities can actually instigate an approach similar to that in the UK remains to be seen, but it seems highly likely that the banking industry will be under pressure for some time to come.

As the US Dow Jones index continues to power ahead to all time highs, there are signs that the stock market performance of late may be masking what is happening behind the scenes.  The US Federal Reserve have been holding a conference with Congress over the last few days, with many experts asked to give their opinions on the state of the economy, the future, etc.  Its seems that all may not be well!

It was Federal Reserve chairman Ben Bernanke who actually brought up the ongoing situation with sub-prime lenders (sub-prime lenders deal with customers who have tarnished credit ratings) and the increasing dangers for the sector. Bernanke claims that far from the worst being over, when a number of high profile companies recently collapsed, there is still a lot more to come.  In fact he reckons that the sector could well soon lose out to the tune of $50 billion to $100 billion, as more and more struggle to pay their mortgages.

It is not just the repayment situation, it is also the fact that many homes may well come onto the market to enable the sub-prime lenders to recoup as much money as possible - thereby having a potentially massive knock on effect to the buoyant housing market.  A lot of Americans have recently ploughed their savings into the stock market and property, two areas which may suffer serious problems. So what can the authorities do?

Unfortunately, much of the damage has already been done with sub standard business written at the height of the market.  In order to return the sector to some kind of stability it appears inevitable, and essential, that there is some kind of shake out.  Quite how much of a shake out remains to be seen, but it will surely test the ever optimistic attitude of the US investor - and the Fed.

While the general cost of living seems to rise every year, this is nothing compared to the recent rise in the cost of bringing up a child.  The Liverpool Victoria friendly society have recently released a report which shows that the average parent will spend £180,000 on their child up to the age of 21!

Even though there is no parent in the world who would actually “cost” the price of bringing up a child, there are serious issues at stake, with many families forgetting all aspects of financial planning.  There are many aspects to consider such as insurance, savings plans, financial constraints (not over spending at birthdays and Christmas) and the like, serious issues which demand consideration.

The thought of saving for a child’s 18th or 21st birthday and being able to present them with a nest egg for their future will give any parent great joy.  When you bear in mind that the average cost to bring up a child is approaching £9000 a year, which equates to £130 billion a year for the UK as a whole, the importance of financial planning becomes ever more important.

Over recent times the rise in the cost of bringing up a child has increased by more than inflation, and historically even more than the cost of property.  Financial planning for the family, including the children, has never been more vital than now.  There are a range of savings products available which only require a few pounds a week - they serve as a great way to ensure your children get a  good start in life, and it will also take the pressure off you!

The UK Government have recently announced plans to encourage single parents to return to work as soon as possible, igniting a heated debate about what appears to be a policy u-turn.  Under the Tony Blair regime single parents were encouraged to stay at home with their children up until the age of sixteen, when they should then make themselves available for work.  Has this all changed?

Under changes which will come into play from 2010, single parents will need to make themselves available for employment once their children reach the age of seven (there are plans to reduce the age to twelve from 2008).  A failure to actively seek work may well effect their benefit payments, a strategy which has been criticised by many.  While there is no doubt that certain areas of the benefits system are open to abuse, is this a plausible solution?

The problem for many single parents seems to be childcare, or the lack of a viable affordable system in the UK at present.  Despite numerous attempts to kick start the childcare sector, even local authority run services are often out of the price range of many single parent families.  Again it looks as though employers may be asked to bear the majority of the financial burden for improvements to the childcare system. Unfortunately, while many talk the talk, few often walk the walk with work based childcare services few and far between.

Lets hope that the new government initiative does actually deliver results, but there are many who have major doubts even before the system has been introduced.

While the UK taxation burden increased dramatically under the leadership of Tony Blair, it is about to get a whole lot worse under the leadership of Gordon Brown, the Ex-Chancellor of The Exchequer.  Below we have listed at least 10 weird and wonderful ways which the Government will use to tax you yet further - many without you even realising!

Orphan Assets

Many financial institutions such as insurance companies have sizeable ”orphan assets”, which are basically assets which may be the excess from with profits reserve funds, policies which have not been claimed or dormant bank accounts.

While many of the financial institutions have shareholders, not to mention massive customer bases, the Government have decided that they should be able to take these funds and use to fund their spending plans.  Is Gordon Brown turning into a modern day Robin Hood or is this just day light robbery?

While many will dismiss this as not worth talking about, the figures at stake actually run into billions of pounds, that is billions of pounds created by investors, clients and the like. Plans are already in place for this facility to be introduced in the short term (possibly this year) although the Government have managed to keep this tax grab fairly quiet.

Pay As You Travel

Even after the massive ground swell of public support against introducing pay as you go travel - whether this would be for the cars, bikes or scooters - the Government still believe that they know best.  In a massive snub to the public’s view of the idea, the authorities are already well down the line with regards to introducing pay as you go travel, cleverly disguised as a “green tax”.

The truth is that the authorities have been looking to use the “green” lobby as a smoke screen for tax increase for a number of years, and it just happens that with the subject of global warming high on the agenda, they think they can rail road the public.

Taxing Household Waste

This is perhaps one of the more cheeky attempts to extort yet more tax from the UK population, with the planned introduction of a waste tax.  Despite the fact that council taxes continue to rise, yet refuse collection has been cut to once every two weeks in many areas of the country, the public are looking at yet more taxe charges for not “recycling” their waste.

The fact that many areas of the country are over flowing with bin bags which can be around for anything up to two weeks, is of no interest to the authorities, never mind the increased risk of rats,. etc.  This is the most blatant case of increased taxes, less services and more pressure on the public to do it themselves.

Taxation Increases On Alcohol

Again this is one of the most bizarre taxes bearing in mind the UK government have just pushed through 24 hour drinking, then again, more time to drink, more sales equals more tax revenue?

Not with standing the increased sales, the authorities are now looking to tax certain drinks which are being targeted at the younger end of the market.  The very same drinks supplied by the companies which are already charged tax by the authorities on their business activities -  a case of double taxation?

By targeting minority areas of society the government are leaving themselves open to charges of victimisation, with many believing that this is only the thin end of the wedge.  As the taxation increase slowly moves up the society chain, we will all see a steady increase in our taxes.

Increased Airport Tax

Even your sacred holiday will soon come under more taxation pressure with the government set to push ahead with an increase in airport taxes - all in the name of the environment!

Again, the authorities have encouraged the massive rise in air travel, and especially the low cost airlines who bring in much need income and tourists to the country.   However, the market is now of a size where it can no longer grow at the same rate, and the authorities are keen to increase there tax take.  “Green” taxes, a great idea, and set to bring in about £1 billion a year!

Fat Tax

If the proposed “fat tax” were target at any other area of society there would be a massive backlash and calls of discrimination.  However, for some reason the food industry has become one of the main targets for increased taxes, under a variety of guises.

The “fat tax” is the latest attempt to “help” society although surely extra investment into the problems of obesity should start with the health service, and support groups? This tax is set to bring in millions for the authorities, and yet again may just be the thin end of an ever expanding wedge.

EU Tax On Children’s Wear

For many years the UK has had a 0% VAT policy on all children’s clothing, which includes nappies.  This looks set to change with the EU using the powers of control which the government recently handed over to them, to push through taxation “harmony” across Europe.

Many of the UK public are unaware that children’s clothing etc does not attract VAT charges, but they may soon be in for a shock!

Property Stamp Duty Increase

While the UK property market looks set to continue for at least a little while yet, the authorities look set to increase the rate of stamp duty on all house purchases, in a move which will raise millions of pounds.  The fact that the market is still moving ahead will be the perfect cover for this latest smash and grab, with many investors awash with profits, and not overly concerned about any “small” increase.

Will these same parties be quite so understanding when the market falls back, and their costs increase?

Bizarre But True

For our last two tax charges we take a look at some of the most bizarre changes ever to been discussed in Parliament.  These include :-

A Chewing Gum Tax

Seriously, this proposed tax has been mentioned on a number of occasions and as bizarre as it may sound it has actually received a number of “hearings” in the houses of parliament.  The MP who has suggested this claims that the extra cost of cleaning the streets of chewing gum should be covered by the consumer - but would any tax income ever really reach the everyday street cleaning services?

I doubt it very much.

“Second Life” Tax Charge

As many of you may be aware there has been a massive increase in the number of people using the internet to participate in “reality worlds”.  Second Life is the leader of the sector with millions upon millions of players worldwide, and a “virtual”  economy which is growing everyday, having made a few people real life millionaires.

The virtual currency, the “Linden”, is actually acquired by converting real life currencies into “Linden” money and investing in Second Life.  Many people have grown virtual businesses and property portfolios then cashed in, taking their funds out and converting their “Lidnen” dollars back into “real” money.

It is this conversion to “real” money which the UK authorities are taking a great interest in, and despite the fact that the “Linden” is only a virtual currency they are trying to find legal ways of taxing the returns of individuals.  “Virtual world”, real taxes - whatever next?