Welcome to 'What IS A'
Become more financially savvy and learn all the basics to be in control of your finances.
Level up your savings skills
We're here to help you navigate the financial world with ease, from budgeting hacks to investing tips. Let's debunk the jargon and empower you to take charge of your financial future!
What IS A ISA?
What IS A Lifetime ISA?
Getting you ready for investing in your future
You don't have to be an investment guru but understanding the basics can be a powerful tool in navigating the financial world.
What is Investing?
Investing is all about purchasing stocks or shares in companies, in the hope their value will increase over time. Once that happens, you can sell them for a higher price than what you paid for them.
What is a fund?
A fund is where everyone’s contributions are put together and used to buy a mix of financial items– things like assets, stocks, bonds, and more. This means your money is spread across lots of different things and is what we call an ‘Investment fund’. There is an investment fund out there for your personal preferences.
What is stocks and shares?
Stocks and shares represent ownership in a company. Think of yourself as owning a piece of the company, and each "share" you own is like a small slice of that ownership pie. So, when you buy stocks or shares, you're essentially buying a portion of the company, and your ownership is represented by those shares.
Why not learn more by reading our articles to improve your money skills and help strengthen your financial knowledge?
What IS A Child Trust Fund?
What IS A Junior ISA?
What happens at age 18?
When you turn 18 your Junior ISA will automatically move into an Adult Stocks and Shares ISA.
You then have the options to add money to your ISA, add a Lifetime ISA or make withdrawals.
Level up your finances
As you start to approach age 18, there are things you need to start thinking about such as your decision you want to make with your savings you have so far. Here is some information on your available choices, remember you don’t need to know it all now- but there is no harm in thinking ahead!
What are your options at age 18?
Gift your future self
Ready to save for your future dreams?
Move your Child Trust Fund money to an ISA or a Shariah ISA with us. Start saving for your goals, like travelling the world, starting a business, or becoming a homeowner. Your future self will thank you.
Live in the moment
Not thinking about saving for the future?
You can take your money and spend it on what your parents intended, like university or learning to drive. This will close your account with us and you will no longer have access to your member benefits.
The best of both
Want to treat yourself & invest in your future?
You can! This option lets you save for your future an ISA or a Shariah ISA, and take some of your money now. It will feel great knowing you’ve got a head start on saving for your future goals.
When it's time you will be ready to turn your financial dreams into reality! By picking the right choice for you, it will give you the biggest boost towards your goals.
It's important you know: The amount in your ISA can go up and down. This is normal for stocks and shares, and you may get back less money than you put in, depending on when you withdraw your money and how the market is performing. Leaving your money invested for at least five years is recommended to help it grow.
Description of member benefits that you may receive assumes you are a Foresters member. Members must be 18 years of age or older and must have an active Foresters Plan and maintain it in good standing. Foresters member benefits are non-contractual, subject to benefit specific eligibility requirements, definitions and limitations and may be changed or cancelled without notice. Member benefits are not regulated by the Prudential Regulation Authority or the Financial Conduct Authority and may change in the future.
What do you want to know more about?
Explore each section below, these will be the things that will start to become important in your life.
Let’s talk about short and long-term savings, the reason why you should have both and their importance.
Short-term SavingsWhen you need to pay for something unexpected, your short-term savings will be perfect for times like this. If you needed to buy a new laptop or maybe have a staycation you could use this pot of money to cover the costs.
Emergencies
Emergency pot of money to help cover any unforeseen cost such as car breaking down etc.
Holidays
Average spent on a holiday is £227+
Laptop
Average spent on a laptop is £500+
Phone
The average monthly phone contract is £35.42 a month or pay in full £895.82+
Medium to long-term Savings
We all think about the future and the things we need to start saving for, but have you thought about your what your savings will look like in 5 or more years time?
University
Yearly fees of £9,250
Car
UK average car purchase is £12-36K
House Deposit
£30K for a mortgage deposit
Wedding
Average cost is £20,700K
Having a short-term money pot will help you not take money out of your long-term savings which will affect your bigger future goals.
We all have different short and long-term goals and it’s important to map these out to help you manage your money.
Take some time and write down a few short and long-term goals and start planning your financial journey today.
Let’s really understand what is a credit score and the things you can do that will either affect it in a good or bad way. We will help break this down for you so you can steer away from any bad decisions.
Right, it’s important to remember that your credit score holds significant value. Anything you do that could affect this in a positive or negative way.
Good Credit
You want to start making decisions to help build your credit score. Below are some options to help you do this. It’s important to have good credit as this makes you eligible for loans such as mortgages etc. Remember even though it’s a great way to build your credit score it could lead to a negative if you miss any payments.
Loans with low APR
When you are looking for a loan always try to go with one that has a low APR. Having a loan agreement will help towards building your credit score as long as you make payments on time.
TIP: Only take out a loan if you really need to!
Phone Contract
Phone contracts are technically a type of loan that you take out for 12 or 24 months, if you decide not to go for pay-as-you-go.
Again, this is a great way to help build your score up as long as you make payments on time.
Shop now, pay later
We all like to shop online and in-store. Companies like Klarna/Clear Pay/ PayPal offer virtual and physical cards you can use and pay off over a certain period.
Again, it's an excellent way to build your credit score as long as you make payments on time.
Bad Credit
Below are the same options that can help you build but also have a negative impact. Remember even though it’s a great way to build your credit score it could lead to a negative effect if you miss any payments or are over-borrowing money. This could then have an impact on your future for any loans as small as a phone contract to a mortgage or car lease.
Payday Loans with high APR
If you really need to take a loan out make sure to go for an option that has a low APR. If the APR is high, it will affect your credit score negatively as it will reflect a high amount of money was needed.
TIP: Start with a savings pot to help cover costs for unforeseen rainy days.
Phone contract
Even though phone contracts are a good way to build your credit score as you prove you can make payments on time.
It can have a negative effect if you miss payments and you owe money on the contract.
TIP: To avoid this from happening you could always do pay as you go.
Shop now, pay later
Again, Klarna/Clear Pay/ PayPal is a good way to build your credit score however, if you add too many orders using this method it can affect your credit score as you would owe a lot of money. Also, if you miss any payments this will affect you negatively.
TIP: Only use these companies for a small number of orders!
It is important to understand basic financial documents as it will help you notice anything that doesn’t seem right and ensure you are able to budget appropriately to suit your needs. Explore the different basic financial documents below and build your knowledge.
Payslips
Who doesn't love a payslip - so when we are looking at how much money we are getting it is important to understand the terms used and the key things to look at:
Gross Pay
The amount paid to you from your employer before any deductions.
Gross Pay for Tax
The amount that you will be taxed on for the tax year.
Tax
The amount that is taxed from you which is based on your tax code and goes to HM Revenue and Customs.
Employer Contribution
An additional contributions made to you for retirement by your employer.
National Insurance
Another deduction based on your gross salary which is contributions to some benefits such as sick pay.
Pension
This is one type of deduction based on your gross pay to help build up savings for your retirement. You have the choice to opt-out and amend the monthly payments.
Tax Code
This is provided by HM Revenue and Customs, this is reviewed annually and adjusted if needed.
Net Pay
The amount you will receive in your chosen bank account after all deductions.
NI Number
When you turn 16 years old, you will receive your unique NI Number which is used throughout life that is provided by HM Revenue and Customs. Your NI Number will have two letters, six numbers and end in one letter.
Student Loan
Deductions taken depending on your salary and the agreed payment plan with UCAS. This only applies if you used the student loan option.
If you are self-employed, it's important to make sure you have all your financial documents in place. Here are 5 things you must do when you become self-employed:
• Registering as self-employed with HMRC & paying taxes
• Work out whether you need to register for VAT
• Open a business bank account
• Make sure you are properly insured
• Keep accurate and up-to-date financial records
- Sort Code This is a unique reference that helps to identify a particular bank.
- Credit Transaction This helps to show you what money is being added to your account.
- Direct Credit This is a payment that goes from one account to another either from a person or a business.
- Cheque This is an authorised written instruction to pay a named person or business with a certain amount of money. A cheque contains a signature from the holder to show it has been authorised.
- International Bank Account Number (IBAN) This is a unique reference, that allows you to pay and receive money around the world.
- Account Number This is a unique number which contains 8/9 digits to identify which bank you are banking with.
- Debit Transactions This helps you see what money is being taken out of your account such as your food shopping or buying clothes from a store.
- Bank Giro Credit This is a paper slip that has instructions for the bank to credit a certain amount of money into your account such as a cheque.
- Direct Debit This is an agreement that has been authorised by you for a business to collect a certain sum of money regularly such as paying your phone bill or Klarna payments.
- Standing Orders This is an automatic payment you have set up and have control over when and how much will be sent. An example of this could be setting up payments into your savings account or to pay for rent.
Bank Statement
Be honest, do you have a look at your Bank Statement? Well, if you answered no, check out reasons why you should check your statement.
Our 4 top tips:
- You may have a lot of money moving in and out of your account. Make sure any direct transfers, Direct Debits, standing orders, transaction fees, and currency conversion costs are correct.
- You are aware of what you spend your money on, so if you spot an unexpected transaction this could be fraud.
- Checking if you have received payments such as your salary or shopping returns.
- Your bank statement will always show you the remaining amount left in your account; from this you can budget to help manage your money better.
If you earn between £12,571 to £50,270 you will pay 20% tax.
Higher rate
If you earn between £50,271 to £125,140 you will pay 40% tax.
Additional rate
If you earn over £125,140 you will pay 45% tax.
We all want to save money and be savvier with our finances, right? If so then here are some tips to help you start saving today!
The 70-20-10 RuleIf you're looking to gain financial stability, a good rule of thumb is to split your income into three categories: 70% for necessities, 20% for long-term financial objectives like saving, or investing and 10% for immediate luxuries, things you want not need. By following this simple formula, you can work towards achieving a sense of financial security.
Shopping BasicsIf you were to go to the store with a budget and buy food, what would you get? To be more savvy have a shopping basic list to make sure we have all the essentials and then top up each week after that. We have put together a list of shopping basics that are good for you to have.
- Fruits
- Vegetables
- Meat
- Fish and Shellfish
- Breakfast and Diary
- Bread
- Pasta, Grains and Legumes
- Snacks
- Condiments and Spices
- Sauces and Oil
There will always be a meal you can make such as pasta with your favourite jar of sauce. If you need more food, then you would simply set a budget and buy those items you need for the week. Yes, a budget is needed, so there are no accidental pick-ups going down those aisles you don’t need anything from. And take if from us don't go shopping when you are hungry!
Sustainable spendingOk, let’s be honest do you keep buying unnecessary items you don’t actually need and in fact you can reuse them to help save money and the environment? I will take that as a yes!
Here are ways we can help save more money that we don’t tend to think of and in doing so we are helping to save our planet!
Do this...
Reduce
By doing this you can create less waste which will benefit the environment. So, stop paying for a plastic bag and bring along your re-useable bags.
Reuse
We should create a habit to make more use of something again. Such as a reusable bottle to stop adding to plastic waste.
Recycle
Taking part in reading the labels and recycling the correct waste can help reuse old waste and turn it into new.
Instead of this...
Dispose of waste
There are high levels of waste on our planet and the environment can not handle it. Try to be more environmentally friendly to avoid contributing to the existing tons of waste.
Bought a new one
We can all get carried away with buying new things but by doing this you are spending more and not saving as much as you can.
Use one-time product
It’s easy to use one-time products such as straws but more waste is being produced. This isn’t kind to the environment, so avoid doing this.
Mortgages
Let’s stop and think about having your own house, that sounds fun, right? The thought of having your very own place and picking out how you would like to design your home to your desire.
But before we get carried away, do you know the process of how to get a mortgage?
If you don’t, that is fine, you will find that a lot of adults are shocked by the process of how it all goes.
We have outlined some of the important information you need to know which is part of the process of getting your own keys to your front door!
1
Check your affordability
This is key to see if you can even get a mortgage in the first place, you need to find this out.
You can do this by reaching out to a financial adviser or mortgage broker. Estate agents also usually have a contact so if you do not know of anyone, they should be able to help. Usually, the estate agents will only show you a property if you have been financially approved.
2
Accepted Offer
You have found the perfect home, and the offer has been accepted. Yay!
There are a number of checks that you can have done on the home to ensure that it is worth its value and highlight any considerations. The most common one is a Home buyers survey, where someone will evaluate the house and let you know if it’s worth the purchase in other words to let you know if the house is falling apart. You can organise this through a Surveyor. There are also additional checks such as checking the heating and wiring that can be carried out. Your mortgage supplier is likely to also carry out an evaluation on the property.
3
In the final stages
There is a mini check list. You need to appoint a solicitors/lawyer who will:
- Liaise with the seller’s solicitors
- Complete searches (these are basically reports on what is happening in the area of the property and making sure the property is all good)
- Put the legal report together and all the documents required for the property to go through.
- Also, they will take the payment of the deposit and the stamp duty and sort this all for you.
- You need to provide ID verification to the estate agent, mortgage broker and solicitors.
- Be prepared for a lot of documentation, so make sure your reading cap is on.
Renting
You may not want to get a mortgage at first or ever, so maybe renting would be right for you. So, we have outlined some of the important information you need to know which is part of the process of finding a place to rent.
1
Contracts
You can have different lengths of a contract either short-term or long-term. Normally the landlord will have their property set for a period of time, but you could possibly negotiate this.
A contract should mean no increases can be made during that time. If you are an awful tenant your landlord can break the clause, if your landlord is awful, you can break the clause.
If you wish to end your tendency agreement earlier than agreed with your landlord, check the contract to see what will be affected.
2
PCM
This stands for per calendar month which is the price you will pay each month to rent.
You can negotiate the costs of the rent; however, this will be impacted by demand and interest.
3
Deposit
Your deposit should be held by a 3rd party and not with the landlord.
You will commonly have to pay a month and a half of rent as your deposit and then you pay in advance for that month.
Therefore, budgeting here will be important as your first month’s bills will be high.
4
Landlord Visit
Even though your landlord owns the place, did you know your landlord needs to give you advanced notice if they want to visit the property? You may sometimes deal directly with the landlord, or it could be with an agency and this is dependent on the landlord and how they want the property to be managed.
5
Good to know
Here’s our little checklist for when you find the place that could be the one:
- When you find the place you like make sure to do an inventory. This is when you take pictures of any existing damages to avoid any deposit deductions at the end of your contract
- When you move into the property you need to take the gas and electricity readings
- Set money aside as when you move out you need to pay for a deep clean fee which is arranged by the landlord/agency
Sometimes making decisions alone can be difficult. Talking about your options with others is a good place to start.
Support from your loved ones
Weighing up the pros and cons with someone you trust, like a parent, grandparent, or an older sibling, can help clear things in your mind. So why not take a seat on the sofa and get talking about your financial future?
Support from the money experts
With us, you can book video chats or home visits with an adviser who can answer any questions you have about your next steps, ISAs or chat about your finances - oh and it comes at no direct charge and doesn’t mean you have to make your choice there and then.
Want to learn more?
If you're a Planholder from age 18 you will have access to Lifelong Learning where you can expand your financial knowledge and more!