Four ways you can donate to charity and be better off

The UK is the most generous country in Europe for giving to charity

Four ways you can donate to charity and be better off

At this time of year most of us are thinking about buying gifts for our loved ones.

But as today - hot on the heels of Black Friday and Cyber Monday - has been dubbed 'Giving Tuesday', we thought we'd take a look at some good ways to donate to charity.

See also: People being urged to leave money to charity in wills

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Did you know the UK is the most generous country for giving to charity in Europe, and fourth in the world?

If you're keen to help others, there are ways donating can even help your own bank balance – or just free you up to donate a little extra.

Payroll giving

If you set up regular payments to charity through your work's payroll, you'll automatically get a discount on your contribution as you don't pay Income Tax on donations.

So if you give £1, it'll actually only cost you 80p (for basic tax payers) or 60p (for higher rate tax payers), with the tax man paying the rest. This makes it much cheaper for you than contributing directly, and the charity gets the same amount.

Cutting your inheritance tax bill

You can also cut your tax bill by leaving part or all of your estate to charity in your will.

Any money you leave in a 'charitable legacy' isn't subject to Inheritance Tax, meaning there's less tax to pay on the remaining money.

You can also reduce the rate of Inheritance Tax due if 10% of your entire estate is left to charity.

Use as a Direct Debit to get benefits from your bank

There are a number of current accounts which offer higher interest on savings, cashback on bills or monthly reward payments if you fulfil a handful of criteria. One of these is often to have between two and four Direct Debits set up.

These will normally be things like bills, but if you have a few of these accounts, you may have run out of Direct Debits. So a simple donation of a few pounds not only helps causes, it can add you a few extra pounds to your bank balance.

Make the thought really count

Despite best intentions, we don't always manage to buy the perfect Christmas gift. If our purchases end up unused or even in the bin, it's hard-earned money completely wasted.

An alternative is to give to charity instead. You can donate directly to thousands of charities direct, or on sites like My Donate.

If you think you might get a dud gift, you can even ask someone to make a donation on your behalf through schemes like #GiveOrGift.

This article is provided by the Money Advice Service.