ASK THE EXPERTS: Credit record hit by ex-housemate

This week's experts are PHILIPPA GEE, who runs Philippa Gee Wealth Management in Church Stretton, Shropshire; JASON WITCOMBE, an adviser at Evolve Financial Planning in the City of London; and MATT COWARD, partner with accountant Price Bailey, also in the City of London. If you have a personal finance question, write to: Ask the Experts, Room 445, Northcliffe House, 2 Derry Street, London W8 5TS. Please do not send original documents. Sorry, no personal replies.

Ask the Experts cartoon

K. L. writes: My daughter jointly owned a house with a friend for several months. It did not go well and they have gone their separate ways.

Now she finds that her credit record has been tarnished because of the former housemate's debts.

How can she clear her name?

P. G. replies: First, I assume the mortgage was repaid. If this is the case, your daughter should get a copy of her credit record to see where the problems are.

She can do this through credit reference agencies such as Experian and Equifax.

It could be the history of the mortgage itself that is the issue, or there may be other debts as well. Seeing the record will give you a handle on how severe the problem is.

Then you should write to organisations flagged up on the credit record, checking their files are up to date and debts paid off.

It may also be possible to put a Notice of Disassociation on the credit file, which allows you to separate your finances from someone you live with or have lived with.

This case highlights how a joint mortgage is a commitment that should not be entered into lightly.

Pension v Isa

F. H. writes: My employer used to pay into my personal pension, but it has stopped this for all staff.

I can pay about £100 to £150 a month from my own resources. Should I carry on putting this into the personal pension or take out an Isa instead?

J.W.replies: Pension schemes set up by an employer are generally very competitive in terms of charges, so if you are to make further contributions this should be your first port of call.

It is worth noting that the Government's NEST initiative will make it compulsory for employers to make some pension contribution if workers want them to. This will start in late 2012 for larger employers.

As to whether an Isa or pension is better, go for an Isa if you might need the cash before you are 55.

A lot also depends on your tax position. A 40 per cent taxpayer will get more tax relief than someone who is a 20 per cent taxpayer, making saving through a pension more worthwhile, though it is difficult to generalise.

Can I get a tax windfall?

F.T.writes: I have realised I am paying tax on building society interest when I should be getting it without tax deducted.

Is it possible to get a windfall by reclaiming the tax for previous years?

M.C.replies: You will need to complete a repayment claim form R40 and submit it to your tax office. If you do not have one, send it to HMRC Leicester & Northants (Claims), Saxon House, 1 Causeway Lane, Leicester LE1 4AA.

The form can be downloaded from hmrc.gov.uk/taxback or ordered via the helpline, 0845 366 7850.

Repayment claims can be made for the past six tax years.

Claims for the 2004/05 tax year must be submitted by the end of this month.




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