Expert addresses money problems

Financial expert Fergus Muirhead gives debt advice to BBC Scotland viewers

I'm Fergus Muirhead and I'm going to be trying to answer any money or consumer problems you may be facing at the moment.

If you are struggling to make ends meet and feel as if you are constantly spinning plates then drop me a line.

You can contact me by e-mail at [e-mail]

I will deal with a selection of your e-mails every second Monday on lunchtime Reporting Scotland, Scotland Live and on the BBC Scotland news website.

Q - I would like some information on how the low interest rate will affect my endowment mortgage in its last year. Apart from a very small deficit of a few hundred pounds about three years ago, it has been on track. It is about to mature in November this year, it has been running since 1984 and at the last statement was still on track to pay the loan in full, this was before the present situation. Can you advise how my endowment will be affected? David Melrose, Glasgow

A - When you say that you have an 'endowment mortgage' I presume you mean that you have a loan on which you are only paying interest - i.e an interest only loan - and that you are going to use the proceeds of an endowment policy to repay the loan at the end of the term. If that is the case then the new lower mortgage rates should have an impact on your monthly repayments, depending on how your loan is set up. If you have a fixed rate loan then your repayments will not change at the end of the fixed rate period but if you have a tracker or variable rate loan then your monthly repayments should come down in line with the recent reductions, as long as your lender passed them on. It's great news that your endowment is still on track to repay your mortgage, and you have to hope that recent falls in the stock market will not affect that come the end of this year when your policy is due to mature.

Q - We are very careful spenders and savers and so much so we entered 2009 with no debt apart from our mortgage. We are middle-aged with children approaching university age and while we are not in debt and have savings in five figures, we are concerned about getting good savings return rather than just setting money aside, with interest rates so low. We are not risk takers at all and this limits where we put our money. We currently have our savings in easy access savings accounts and an ISA. We always need to have our money available. Can you suggest in these uncertain times, the best place to gain safe and reasonable interest rates? Libby Johnston

A - As interest rates come down so do the rates payable to savers. The first thing I would say is that there is a great variety of interest rates out there and so you should always be checking that you are getting the best possible rate for your money. You say that you have an ISA at the moment and it is usually a good idea to make sure that you are maximising the money you are paying into your ISA since any growth in these savings is tax free. You say that you are not risk takers but risk means different things to different people. It may be that you have money that you are unlikely to need in the short term; that you could be taking a bit of risk with at least some of that cash, in the hope of generating a higher return. Of course you also say that you have family approaching university age but you don't say whether some, and if so what proportion, of the savings might be needed to help pay these education costs.

Q - I am now 36 and have been self-employed since the age of 20. My accountant retired last year and I am going to attempt to do my own tax return online for the first time myself this year. I wondered if you had any tips for the first timer and anything I should watch out for? Ewan McLeod, Glasgow

A - Tax returns need to be with HMRC by the end of the month or you could face a £100 fine. Also, your first instalment of tax due for last year needs to be paid by then as well so if you are not up to speed then you still have a couple of weeks to go. HMRC has a very helpful website - www.hmrc.gov.uk - that is full of useful information and help if you do want to fill in your tax return on your own. You don't say in your e-mail what type of work you do or how complicated your tax situation is. While you can save a bit of money by completing your own return you may miss out on the expertise of an accountant to ensure that you are making use of all of the tax breaks available to you. You may also just decide that it is more efficient to pay an accountant to save you time.

Q - I have an ISA with Norwich Union. I invested with them about four years ago and the original sum of £3,000 is now down to just over £2,500. I wondered whether you could give me some advice as to whether I should weather the storm or just end my contract and look for something better? Claudia Genest

A - While an ISA is a tax efficient investment you have to make sure that they type you are investing in is the right type for you. You can invest your money in a cash ISA or an equity ISA and it is this latter type that will rise and fall with the stock market, and recently you could have seen large losses. So you have to ensure that before investing in an equity-based ISA that you are happy to take the risk involved and that you are unlikely to need your cash in the short-term. To answer your specific question Claudia, I would weather the storm, unless you have some pressing need for the money at the moment. Any stock market-type investment should not be seen as a way to make a quick buck and you should be prepared to sit things out until the markets improve. If you cash-in now all you will be doing will be taking the hit now and you will then have to find some other home for your money.

The opinions expressed are those of the author and are not held by the BBC unless specifically stated. The material is for general information only and does not constitute investment, tax, legal or other form of advice. You should not rely on this information to make (or refrain from making) any decisions. Always obtain independent, professional advice for your own particular situation.