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These may be financially challenging times but there are rays of light.

13/02/17

The potential outcome of any financial decision is currently being refracted through the prism of global uncertainty. Add that to the disappointing news that unsecured household debt has risen again and it creates a challenging time ahead for many people.

The decision to save is never a bad one but it has become increasingly difficult to carry out. News of a rise in inflation, and potentially a rise in interest rates as a result, only promises to make family budgets tighter.

But it can be swings and roundabouts with money - where an interest rate rise casts a shadow for mortgage holders it promises a ray of light to the worn-down saver.

And if you’re struggling to decide between saving for a deposit on a home or for your retirement, April sees the launch of the Lifetime ISA (LISA). Announced last March, LISA could give those aged 18 to 40 the opportunity to save for a pension and a home within one government-boosted savings product. Offering a bonus of 25 per cent on contributions (max £1000, payable at the end of each tax year, until you are 50), you can save up to £4000 per year. There are conditions and penalties though, so make sure you understand the detail before you decide to save this way.

These tough economic times have also seen more people starting their own businesses or letting rooms and selling products to supplement their income – and many are doing this online. As we approach the end of the current tax year it’s worth noting that HMRC has turned its attention to this sector, including selling on sites such as ebay and Airbnb. Depending on your earnings from these sites you could have a tax liability – don’t risk a fine on top of any required payment.

A version of this article originally appeared in the Isle of Wight County Press, Friday 10th February 2017

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