We all ask “how to protect my money from being taken” on a daily basis. It’s either at risk from fraudsters, the banks, the Government, mortgage lenders, bailiffs, ex-spouses or just plain old time and circumstances.
There are FAR too many ways that you and I can have our money taken from us so here’s a host of ways you can protect your money now and in the future.
- How to protect my money from bailiffs
- How to protect my money in divorce
- How to protect my money from the Government
- How to protect my money before payday
- How to protect my money for retirement
- How to protect my money if I’m too ill to work
- How to protect my money from ID theft
- How to protect my money from phone scammers
- How to protect my money from internet scammers
- What to do if the worst happens
Bailiffs seem to be the big, frightening ogres of the money world.
But if the burly men are banging on your door, KEEP CALM. And make sure you know your rights.
Your rights with Bailiffs
We have a big, detailed article here about how to deal with bailiffs so check it out if you’re having problems with them right now.
- Crucially, you do NOT have to let them in and they are NOT allowed to force their way into your property (although they can use an open window or unlocked door) unless one of these three things is true:
- They have previously gained entry to your property and you have had a ‘notice of intention to re-enter premises’
- They are county court bailiffs, entering commercial property (but only if there’s no living accommodation attached and they have special permission)
- They are collecting unpaid fines, income tax or VAT and they have permission from the court.
- If they do get in, there are also exceptions as to what they can legally take from your home:
- they cannot take essentials such as clothing, bedding and furniture or anything belonging to someone other than the person named on their warrant.
- Don’t be scared by idle threats either. Despite what some bailiffs say, you CANNOT go to prison if you don’t co-operate with them, they are forbidden from threatening you and CANNOT use any kind of violence towards you.
- Contact the Office of Fair Trading if they overstep the mark or the police if they threaten you physically.
The best way to deal with bailiffs, however, is to sort out the problem before they come knocking.
If you receive any notification that a bailiff is going to come round, you need to talk to your creditors.
- One of the first things you should do is get some free advice from your local Citizen’s Advice Bureau (CAB) or another debt charity (see our list of contacts at the end of the article). They may be able to help you make a court application to stop the bailiff, or negotiate with them on your behalf.
It’s not easy. Particularly if you have a lot of it and the divorce – or separation – is acrimonious.
For a start, it’s looking increasingly sensible to get a pre-marital agreement drawn up before you get married now. Some people are even getting post-marital agreements if things change in their finances or in the relationship.
They’re not legally binding in the UK but increasingly courts are using them as a good starting point for disputes.
It sounds horribly unromantic but as two in five marriages end in divorce and about twice that number of cohabitations end in a split, it makes sense to get something on paper before you start sharing finances as well as living space.
However, if you haven’t done that – and frankly even if you have – there are a few things to consider if you’re getting divorced or ending a partnership:
Protecting the rights to your home
If the family home is in your ex-partner’s name only, you can register your interest with the courts to make sure it isn’t sold without you knowing about it.
If the property is in both your names, as ‘joint tenants’ – or as ‘joint owners’ if you’re in Scotland – you may want to change the way it’s owned.
You may need to speak to your mortgage lender as well to tell them what has happened and work out how you’ll manage the mortgage repayments.
If you have a joint mortgage, you’re both equally liable for the whole loan so if one of you doesn’t pay your part of it it could damage your credit rating lose your home.
The Money Advice Service has a useful section on how to protect your home ownership rights during divorce or dissolution.
Contacting your bank, credit card and loan providers
Get in touch with your bank if you had joint accounts with your spouse/partner. Joint loans, like mortgages, are the full responsibility of both of you.
Make sure that none of your earnings go into your joint account but be aware that if you freeze the account then both of you have to agree to it being unfrozen.
Also make sure your credit card company cancels your partner’s card if they have a card on your account.
Also, if you suspect that your ex is going to try to sell or, basically, steal assets you co-own then you might be able to apply to the court to stop them doing this if it would prevent a reasonable financial settlement between you.
No, we’re not saying that Government agents are going to knock down your door and grab any cash they can find. We don’t have leaders like that….yet.
But it is important to protect your money from the tax office (HMRC). Any time you make any money – whether through earning it at work or making it through savings and investments – the Government wants a piece of it.
- Put as much as you like into savings accounts. From April 2016 onwards, the Government is now not taxing any interest you make on savings accounts up to £1,000. In other words, you can make up to £1,000 in interest on your savings without paying any tax on it. Sounds generous, but with savings rates at an all-time low, this means that you will need at least £100,000 in high street savings accounts to make anything like that!
- Use your ISA limit for stocks and shares investments. You can put up to £20,000 per tax year (April 6th to April 5th) into ISA-wrapped investments (i.e. you won’t have to pay tax on the gains). As savings are already covered with the new rule (see above) that means that you can use all of your ISA allowance for long-term investments to give yourself a rich future. In other words: stocks and shares. They don’t have to be scary. See our article here on how to invest in easy, cheap index tracking funds.
- Put as much as you can into pension products. You can put up to £40,000 into a pension per tax year with a total fund limit of £1 million. The Government adds in the tax you would have paid on it so your pot grows pretty much immediately. However, when you retire and come to draw your pension it is counted as income so if you ‘earn’ more than the tax threshold you will be taxed on what’s over that.
- Give money away and make a will. You can give £3,000 away each year tax free and anything you give to your kids at least seven years before you pop your clogs is free of Inheritance Tax (IHT) for them. Also, do make a will, whatever age you are, as it cuts down on a lot of legal bills, can shelter some of your estate from tax and stops the Government getting more than their fair share!
Use the moneymagpie savings account calculator, to see where your money is best invested!
If you always spend the last few weeks of every month counting down the days until payday, it’s time to take action.
- Create a budget. If you create (and stick to) a clear budget, and cut out unnecessary costs, you’ll turn your life around: it’s that radical. You can use a free tool such as a budget calculator, then get lots of other tips on what to do if your spending exceeds your income in our guide to making a budget. You can even do it on the back of an envelope – just do two columns, one with your monthly income, the other with your monthly essential spending. Take the spending from the income, and that will show you how much spare cash you have to play with each month.
- Make extra cash. If you spend more than you earn, one solution is to try to earn more. This is easier said than done, but consider whether there are extra ways to make cash, such as working longer hours for your employer, selling items, making money in your spare time, or even renting out a room (you can make up to £7,500 tax-free that way now). See our Make Quick Money section for loads of ideas to make a bit on the side.
- Don’t go for a payday loan. Payday loans are a nasty type of short-term lending. They can charge around 2,000% interest just to lend you a few quid until payday – as we show in our payday loans article. If you just need some cash to tide you over, you’re much better off joining a Credit Union, as they’re willing to give small, short-term loans in a way that high-street banks usually aren’t. We have more information in our piece on how to get a cheaper loan.
- Think about what’s really important and stick to that. Sounds a bit philosophical, but research by short-term loans companies has shown that people who get into payday panic often ‘need’ the money for inessentials like clothes, entertainment and tickets to events. We need to learn to do without these things until we have the money, so that we don’t waste precious cash on high interest rates.
We may all dream of an early retirement – complete with long holidays, relaxing times with friends and exciting new ventures – but this is little more than a pipe dream if you’re relying on the state pension.
You need to start saving on your own, and as early as possible, or you could face a much longer working life than you expected (or even worse, you could retire without the money you need to live on).
You don’t need to have a pension to fund your fabulous retirement. It’s just one of the many types of investments you could make to create a decent savings pot for yourself.
Here are the various investment options for you to consider to fund your glamorous and enjoyable retirement:
- Stocks and shares ISAs. Shares tend to perform better than savings and many other investments over the long-term. Short-term, they’re volatile (and so can seem worrying) but for your retirement – if that’s at least 10 years away – you should be thinking about long-term gains anyway. We like index-tracking funds because they’re cheap, but it’s important to do your research and find funds that are right for you.
- Property. This has often been a good long-term investment in the past. However, it isn’t guaranteed: there are areas of the UK where prices still have not recovered to 2007 levels, and you never know what the market will be like when you come to sell. Owning a home can also be costly, with mortgage payments, as well as the cost of keeping it repaired, rented and decorated every year. However, there’s likely to be continuous pressure on the housing stock going forward, so if you’re looking to the long-term, it’s worth considering property for your portfolio.
- Stakeholder pensions. These are cheap and pretty straightforward (read about them in our stakeholder pension article). They’re simple, cost-effective and available to anyone – even your kids.
- SIPPs. If you’re a confident investor, a SIPP may be better for you, as you can decide what you invest in. We have an article on SIPPS here.
Even if you can’t put away big payments into investments right now, every little helps, especially when you are young. However, if you’re in your 30s and 40s and still haven’t started saving towards your retirement, there’s still time to make a huge difference – see how to save at any age in our retirement guide.
If you are already retired
- Firstly, make sure that you ignore any unsolicited calls, emails or letters offering you fabulous returns on some investment. Interest rates are very, very low right now so anything that is ‘guaranteed’ and is over 3% should be viewed with great suspicion.
- If you’re coming up to retirement, or you have recently retired and you are wondering how to get the best value for your money, this is a time when it’s worth spending money on an independent financial advisor. It will cost a few hundred but it is really worth it to make sure you get a few more thousand as the years roll on.
- Remember that there are lots of ways to make extra cash at any age, so read our money makers for the over 60s piece for some inspiration!
If you get ill or injured and can’t work, sick pay will only cover you for up to 28 weeks. If you need to take an extended break from work and haven’t got income protection in place, you could end up in serious debt, or even losing the roof over your head.
- The best way to prevent this is by building up a savings safety net to cover you for at least three months if you lost your income. Read all about it in this article. This pot will keep you afloat and the bills paid until you’re back at work, so that you don’t end up in a dire situation. For pointers on topping up your income (even if you’re not working) read this guide on ways to save when you don’t have any money.
- Alternatively, get an income protection policy, which pays a tax-free monthly sum until you get back on your feet, or reach retirement age. (Do remember this isn’t designed to protect you if you lose your job – just if you become too ill to work). It can be a bit complicated, so speak to an advisor.
Identity theft is on the rise – and if a stranger gets hold of your personal data you could lose thousands of pounds. Worryingly, it’s a fast-growing crime because it’s so easy – fraudsters only need a few key details to steal your identity and run up a massive bill or apply for credit in your name.
Here’s how you protect yourself from ID theft:
- Check your credit report regularly to ensure that fraud hasn’t been committed. You can get a free 30-day CreditExpert trial with Experian and find other ways to stay safe online.
- Make sure you shred all receipts, documents and statements that you don’t need.
- If you move house, use the Royal Mail redirection service and get someone to collect your post if you go on holiday.
- Don’t post personal details on social networking sites such as your email address, date of birth or schools to anyone other than those you trust implicitly – as these are the types of things banks ask as security questions!
- Don’t bother with ID fraud insurance, as your bank or credit card provider will cover the cost of losses as long as you weren’t negligent (and in any case, these policies only cover the cost of fixing the damage – not the actual financial losses you might suffer as a result of fraud).
- Never disclose personal or financial details to anyone ‘cold-calling’, even if they claim to be from your bank, the police or another official organisation. Also, only provide personal information and credit card details online when you are on secure (https) sites displaying bona fide logos of secure payment systems, such as Verisign or Worldpay.
- If you have documents stolen, there is a strong chance these will be used to commit fraud in your name. If this does happen contact the credit-referencing agencies Experian, Equifax and Callcredit to make sure that a note is put on your record.
Sadly, there’s a host of nasty scams and frauds around and a lot of them happen on the phone. Here are a few to watch out for:
legitimate caller ID number
Beware of nasty fraudsters who are using a new scam which makes people believe that the person on the other end of their phone call is a trusted organisation by displaying a legitimate caller ID number.
This scam, known as ‘number spoofing’, involves criminals copying the phone number of a real institution (often a bank) and then trying to reassure the unknowing victim that they’re legitimate by showing them the number.
Once they have your trust they will ask for confidential information such as pin codes and online passwords so they can steal money out of your bank account!
Some of these fraudsters even try to make people send money to their accounts or hand their cards and/or cash over to a courier for ‘safe keeping.’
Phone call scams are nothing new and they come in a variety of forms,
bogus Microsoft or Windows caller
Watch out for a new phone scam where the caller says he’s from Windows and tells you you have contracted a virus through Windows on your computer. I was contacted in this way by phone today. When the man told me this had happened I was immediately suspicious. How would Windows know? Why would they ring me to tell me? Who are these people? When I asked him what company he was calling from he wouldn’t say. When I asked him what my IP address was he wouldn’t say. I said that if they could tell what had happened to my computer they must know what the IP address is. When he wouldn’t give me any of this information I put the phone down on him. I suggest you do too. I’ve just looked up ‘Windows phone scam’ on Google and found a number of posts about it. Here’s one with recordings of phonecalls (handy!) As always, if you are suspicious of a call, ask them for a phone number to call them back. If they won’t give you one just hang up. If they do, check it online first to see if it’s a scam then be very wary even if you don’t find it there. You might be one of the first to be tried.
bogus BT caller
The con artist calls up, says you’re about to be cut off because you’re behind on your payments and demands payment immediately, saying it’ll cost more to be reconnected later. Someone this has happened to – with a completely different phone line provider – says the guy wasn’t fazed in the slightest by this fact, claiming that ‘everyone pays a percentage to BT for line rental’.
When you say you don’t believe that ‘John Peacock’ is actually from BT, he offers to demonstrate that he’s the genuine article by giving you his phone number -0800 0800 152 – and ‘disconnecting’ your phone so you can’t call out. You hang up, try and dial out and as if by magic, you can’t. The scammer rings you again, having ‘proven’ they really are at BT, and tells you you can pay your bill immediately over the phone by credit card. The person who told us about this said she hung up at this point and rung back the 0800 number and surprise surprise, it wasn’t recognised. Her phone line was fine.
The police say that this scam is new but is catching on quickly. The fact that the phone does go dead would probably convince some people it’s real. It’s actually very simple: the con artist stays on the line with the mute button on and you can’t dial out – but he can hear you trying (because the person who initiates a call is the one to terminate it). When you stop trying he cuts off and immediately calls back.
This is good but not that clever. The scammer gave the wrong number – it should have been 0800 800152 which takes you through to BT Business. You could almost be convinced! The sad thing is that it is so simple that it will certainly fool a lot of people. Obviously once they have your credit/debit card details, there is nothing to stop them cleaning out your account.
Even if you didn’t know that other phone line providers don’t pay fees to BT, the alarm bells should start ringing whenever you’re asked to give your credit card details over the phone. Legitimate companies don’t do this. These people are getting cleverer, so we all need to be on our guard for strangers visiting or phoning to ask for personal or bank details. If you think you’ve been scammed you should:
- Get hold of your credit report for free to see if anyone is syphoning money out of your account without your knowing it
- Tell the police – even if they can’t recover your money they’ll be aware of another new trick doing the rounds and can get information out to warn other people.
boiler room scammers
Beware of boiler room scams, there are a lot of them around and people still don’t know enough about them. The average victim of a boiler room fraudster loses around £20,000!
The fraudsters who operate these scams prey on the elderly, both because they have the funds available to invest and because they are often the most vulnerable. More than 65% of victims are 56 or over, and 20% are over 76. Nearly 70% of those affected are men.
They ring you up over the blue and there’s often a hard-sell, encouraging you to invest in things such as land, shares and rare-earth metals. They will often pretend to offer a discount or claim that time is running out so that you are pressured into making an instant decision.
Check out the FCA’s ScamSmart website for loads more information on scams and how to avoid them.
Our top five tips to avoiding boiler room scams are:
- Beware of cold callers offering opportunities that look too good to be true – they probably are.
- Remember, investors do not have the same protection when dealing with unauthorised firms – find out their name and look them up online. In fact, call the FCA or the Financial Services Compensation Scheme FCSC to check if they are authorised.
- Avoid giving out your personal details.
- Find out, if you can, where the enquiry is coming from; most boiler room scams are based abroad. Common countries include Switzerland, Spain, Dubai and the USA.
- Remember that if an offer really is that good, whoever is calling you should be investing in it themselves rather than telling you and everyone else about it. Isn’t that what you would do if you came across a ‘sure-fire great bet’.
Also read our blog post on how to avoid boiler room scams for more information.
We all know that there are lots of frauds and scams online, but many of them are very difficult to spot. The fraudsters are often clever and as it’s all so impersonal it’s often hard to tell what’s real and what’s fraudulent.
However, here are some ways that you can protect yourself and your money:
Protect your pins and passwords
- Use different passwords for different accounts on financial websites and bank log-ins. That way, if a fraudster accesses one, they are less likely to be able to access all accounts.
- Avoid using your mother’s maiden name, this is easy information for fraudsters to obtain.
- The same goes for your PIN number, Don’t use the same PIN for all of your cards. If your cards are stolen and they figure out your password they would now have access to all your accounts.
- Never write down any passwords or PIN numbers in a manner that is accessible to others, so never store them with your cards. If you do, your bank may believe you were acting without reasonable care, which means it could make you liable for all the stolen money. So always protect your PIN, shield it when you are using your debit card in shops and at cashpoint machines.
- Check all receipts against your bank statements carefully and regularly.
- Always monitor information on your credit report with CreditExpert. It’s a great idea to view this report once a year so you can monitor if anyone has been fraudulently applying for credit with your name.People who regularly monitor their credit reports typically spot if someone is attempting identity fraud in their name within a matter of weeks.
- If you spot an account or credit application on your credit report that you don’t recognise, contact the company involved immediately to request they remove the data from your file.
Fraudsters are targeting us online, in shops, in restaurants, at the ATM and when using cheques and debit cards. Here are some of the things you must do to protect yourself:
- Keep your credit card in your sight at all times. A common scam used by fraudsters is ‘skimming’ your card details by swiping your card in a device that copies your card details. When you do use your card at shops, restaurants, or petrol stations make sure your card remains in your sight and is only swiped once.
- Use secure sites only. If you are going to purchase online pay attention to the beginning of the address. On secure websites the ‘http’ will change from ‘http’ to ‘https’ and there should be an image of a padlock at the top of the computer screen. Check this to ensure that your payment details are secure. Before you start purchasing online make sure your computer is protected with anti-virus and firewall software to prevent people from hacking into your hard drive and stealing information. Regardless of the software you’re using, always keep your anti-virus software up to date.
- Destroy all old debit or credit cards and cheque books. Make sure, when cutting up your cards, that you cut through the magnetic strip and security number on the back. This will prevent anyone else being able to use them if you are burgled.
- Be extra careful abroad. If you go abroad, use a prepaid card, cash or a credit card with a low credit limit. For more information check out our handy article on prepaid cards. Do not use your bank card as fraudsters could then have access to your whole account. America is particularly bad for financial fraud, but wherever you are on holiday keep your money – particularly your plastic – safe.
- Photocopy your important documents. A good precaution is to take colour photocopies of your passport, driving licence and other personal documents so that if they are stolen you can get your identity back quickly. It will also make it easier to stop the fraudsters using your details for their own gain.
Even if you take all these precautions you may still find yourself a victim of fraud, but don’t panic. You’re not the only one who has been in this situation and you won’t be the last.
However, do act fast. It’s in your best interests to act quickly and decisively in order to minimise the damage.
Also, get in touch with the new government agency Actionfraud and let them know what has happened to you. They may be able to help but even if that’s not possible, your information will help them catch the fraudsters later and stop them doing it to others.
- If any of your cards (credit, debit, store cards, etc.) or cheques have been lost or stolen, tell the providers as soon as possible. Keeping all these important phone numbers in one place will make it easier to start calling. It may be a good idea to store the numbers in your mobile phone.
- Consider closing your current accounts and opening new ones with different numbers and details. It sounds drastic but could be the best way if you are getting a lot of fraudulent activity.
- You should also change all passwords for your online bank accounts. Contact Actionfraud to let them know what has happened. Give them as many details as possible to help stop this type of crime at its source.
- Take notes during all financial phone conversations, in particular get the name of the person you speak to. Follow up your call with a letter outlining what has happened and the steps you have taken and keep a copy of that. The same rules apply when querying bills or transaction statements that you don’t recognise.
- Never give out your PIN number or allow others to use your debit or credit cards. Giving someone your PIN number is again seen by some banks as acting without reasonable care and may leave you liable for all money stolen.
- Get free help from charities Citizensadvice.org.uk, StepChange Debt Charity and Nationaldebtline.co.uk
- Compare the best income protection policies
- Sign up to CreditExpert for a free 30-day trial and monitor your credit rating.
Forward this article to your friends to make sure they have the information they need to protect their money against fraudsters, bailiffs, banks and problems.