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I have been appointed deputy for financial affairs for my brother, who has learning difficulties and is severely disabled. He lives in a residential home a long way from me so I cannot visit him every week. I have been asked by his carers to obtain a prepaid card for him which they will be able to use to pay for his relatively minor day-to-day personal expenses.
He has a current account with HSBC, which says it cannot provide one of these cards. I have set up an online account with HSBC but I now need a prepaid card to give to his carers. How do prepaid cards work, where can I get one, and do they incur charges for purchase and use?
Antony Bream, managing director at Ribbit Consulting, says a prepaid card is a payment option, like debit and credit cards, that lets you pay for services and products in-store and online.
But prepaid cards are often more convenient and flexible which makes them a workable solution for people who may need to allow a carer to pay for day-to-day personal expenses such as food deliveries and medicine. It is essentially a pay-as-you-go debit card.
To use a prepaid card you don’t need a credit rating or to apply for a bank account as you must load money on to the card and you can only spend or withdraw the amount you’ve got on it. This means you can’t go overdrawn or use it as a credit card.
Large companies such as Mastercard provide prepaid cards as well as Tesco Clubcard Pay+, HyperJar, Revolut. There is also the Ode Card which is specifically aimed at carers, charity workers and those working in education or healthcare, which offers discounts to people working in those sectors. MoneysavingExpert has a comprehensive list of the prepaid cards on offer.
This is a fast-moving sector. Mastercard, for instance, is innovating in the area of prepaid, debit and credit cards with the launch of Mastercard Touch, allowing blind or partially sighted users to use the right card in the right way by touch alone. Credit cards have a broad square notch, debit cards have a semi-circle notch, and prepaid cards have a triangular notch.
Which VCT should I invest my inheritance in?
I have inherited a lump sum and I’m thinking of investing part of my inheritance in a venture capital trust (VCT). How much cash do I need to invest and which one should I choose?
David Hall, chair of the Venture Capital Trust Association (VCTA), says the minimum investment into most VCTs is between £3,000 and £6,000, and you can invest more if you wish. Recent data from the VCTA showed the average amount invested stands at around £15,000.
People typically invest into VCTs on an annual or twice yearly basis, building a diversified VCT portfolio to manage their risk. How much you choose to invest depends on your personal circumstances and what’s motivating you to invest. For example, it’s worth considering if you’re reaching a tax threshold, or if you’re interested in investing in particular types of UK start-ups.
Before you should invest you should consider that VCTs are typically longer-term investments held for more than five years and often 10-15, and are increasingly being seen as income generators and retirement planning vehicles. With £7bn under management, VCTs offer a wide array of companies to invest in and these can be matched to an investor’s personal interest.
The newly launched Octopus Future Generations VCT, for instance, focuses on businesses that are helping to build a sustainable planet, empower people or revitalise healthcare; Pembroke VCT invests in consumer-facing businesses; other VCTs such as Albion and British Smaller Companies cover healthcare, education and enterprise software. Which one you choose really depends on which kind of companies fit your personal values or interests.
The opinions in this column are intended for general information purposes only and should not be used as a substitute for professional advice. The Financial Times Ltd and the authors are not responsible for any direct or indirect result arising from any reliance placed on replies, including any loss, and exclude liability to the full extent.
Our next question
My estranged brother-in-law is resident in the Netherlands and has had a chequered business past. My wife and I have had no contact with him for many years but he has now commenced action in the UK courts to lay claim to half the value of our London house, on the basis of a loan he made when she and I bought the house 25 years ago. That loan was repaid by my wife three years later out of her inheritance. Unfortunately, both the loan and the repayment were verbally agreed and nothing was put in writing. Is this a spurious claim? It’s a sizeable property and there are several million pounds at stake.
Do you have a financial dilemma that you’d like FT Money’s team of professional experts to look into? Email your problem in confidence to money@ft.com
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