The nation’s finances are in a dire state and the likelihood of any giveaways or tax cuts is low.
So if you want to make your money go further, you have to take charge yourself. Here are some top tips to beef up your spending power and manage your personal budget.
Switch utility supplier
Energy bills are one of our biggest financial worries, costing the average household an incredible £1,350 a year, says Tom Lyon, energy expert at comparison site uSwitch.com. “Six in 10 households never switch energy supplier, even though there is more than £200 difference between the cheapest and the most expensive tariffs.”
Making your home more energy efficient will also help, he says. “Insulating your loft could save you £175 a year, cavity wall insulation should save £135. Turning your thermostat down just one degree could save up to £60.”
Save pounds on broadband
Nearly one in three people pay more than £20 a month for their broadband connection and one in 10 pay more than £30, but the cheapest deals start at just £3.25 a month, uSwitch.com says.
About half of all households have never switched supplier and are typically overpaying by about £120 a year.
Cut your travel costs
If you normally drive to work and have colleagues who live nearby, save money by arranging a car share, says David Black, banking specialist at Consumer Intelligence. “If you have to pay to park, consider parking slightly out of town and completing the journey on foot,” he adds.
For longer journeys it pays to plan ahead. “Train fares are significantly cheaper if you can book several weeks in advance. Hotels, too.”
Childcare vouchers
Parents with children under 15 can save up to £933 a year with the childcare voucher scheme. If both parents take the vouchers they could save up to £1,866, says Iain McMath at voucher provider Sodexo Motivation Solutions.
“The system allow you to convert part of your salary into vouchers, before tax and national insurance are deducted, cutting your tax bill.”
To qualify your company must run a scheme. Ask what your employer offers.
Quit smoking
Quiting smoking can make your finances a lot healthier, says Dr Katie Tryon at private medical insurer PruHealth. “By stubbing out the habit a 20-a-day smoker can save themselves about £2,700 a year.”
Once you’ve quit you should also get cheaper life insurance, critical-illness cover and private medical insurance.
Credit where it’s due
If you’re unable to clear your credit card every month transfer your balance to a card that charges an introductory rate of 0 per cent. Barclaycard offers a market-leading balance transfer card charging 0 per cent for the first 25 months.
“Switching a £2,500 credit card debt from a card charging 18.3 per cent a year to a 0 per cent deal would save you more than £450 in the first 12 months,” says Andrew Hagger at Moneycomms.
Drive down motoring costs
Next time you buy a new car buy something that’s cheap to run, says Phill Jones, commercial director of Motors.co.uk. “A smaller-engined car gives you better mileage, lower insurance premiums and cheaper maintenance and repairs.”
“Heavy-footed drivers who ferociously accelerate and brake waste up to 60 per cent more fuel,” Jones adds.
Petrolprices.com allows you to compare prices at stations in your postcode.
Shop around for insurance
One in three motorists waste money by rolling over their car insurance at renewal, says Scott Kelly, head of motor services at GoCompare.com.
“Half of our customers saved up to £294 a year by comparing their renewal premium against quotes from rival insurers. You can also save hundreds of pounds by shopping around for household insurance.”
Remortgage now
You could save thousands by switching to a cheaper mortgage, says Mark Harris, chief executive of mortgage broker SPF Private Clients. “Too many borrowers sit on their lender’s standard variable rate (SVR) for years.”
A £150,000 capital repayment mortgage on Kent Reliance Building Society’s SVR at 6.08 per cent would cost £974 a month.
“If you had 15 per cent spare equity in your home, you could switch to the Co-operative Bank’s 3.99 per cent five-year fix, and your monthly payment would fall to just £791. That’s saving £2,196 a year.”
Sell your skills
Everybody has a special skill so sell it, says Xenios Thrasyvoulou, founder of website PeoplePerHour.com. “It can be anything from fixing a bike to teaching make-up skills or helping children do their homework.” PeoplePerHour offers an online marketplace for people selling services for as little as one hour at a time.
Sell your stuff
Don’t hoard your old gadgets, sell them for cash. Website Cashinyourgadgets.co.uk will give you cash for your old mobiles, laptops, tablets and digital cameras, says founder Ashley Payne. “Even older items can generate a smaller amount of cash.”
MusicMagpie.co.uk helps you sell household items such as clothes, CDs, DVDs, games, gadgets and electronics. Or you could try a car boot sale, or eBay.
Rent out a room
If you have a spare room you can make up to £4,250 a year free of tax by taking in a lodger, says Michael Riegel, chief executive at social accommodation website Wimdu.
Tell your mortgage provider and household contents insurer, advises Matt Hutchinson, director of SpareRoom.co.uk.
You could turn your home into a B&B for the night by renting out spare rooms to holidaymakers through Airbnb.com.
Make money travel further
Don’t buy your travel money at the airport, says Tracey Tivnan at travel money specialists Moneycorp. “Ordering your currency online in advance is best.”
If you buy £500 worth of euros, you’ll typically get about €574 online. “At the airport, typically €518,” she says.
Compare online exchange rates and delivery charges with different companies such as ICE, the Post Office, Tesco, Travel-ex, Marks & Spencer and Moneycorp.
Employees benefit
Many employers offer voluntary benefit schemes giving discounts on everything from breakdown cover to your supermarket shop, says James Malia, head of P&MM Employee Benefits.
“You could save more than £1,000 a year on some schemes, with discounts on holidays, cinema tickets and groceries. Ask what your employer offers.”
Many employers offer cut-price life insurance and income protection, says Peter O’Donnell at insurer Unum.
Shop around for an annuity
Choosing an annuity, the income for life you buy with your pension pot, is one of the biggest financial decisions you will make.
Too many people simply take the annuity offered by their pension company, yet shopping around, known as taking the open-market option, can boost your income by as much as 20 per cent.
Log on for the best savings rates around
With savings rates stuck at all-time lows, you must shop around for the best possible deal, checking rates at websites such as Moneyfacts.co.uk.
If you’re not a taxpayer, complete form R85, available from your bank or building society, to make sure you get your savings interest free of tax. Otherwise 20 per cent tax will be automatically deducted.
Couples who pay different rates of tax should consider switching any savings into the name of the partner who pays a lower tax rate.
If you’ve got a bit of money to save or invest, use your annual individual savings account (Isa) allowance. This allows you to set aside up to £11,280 in the current financial year, and take all your returns free of tax.
Use your ISA
You can pay up to £5,640 into a cash Isa, and a similar amount into stocks and shares or you could pay your full allowance into stocks and shares.
Fund manager Fidelity Worldwide Investment says investors who fail to use their full Isa allowance could miss out on an extra £75,000 over 25 years. Higher-rate taxpayers could miss out on £115,000.
Save money on stocks and shares Isa charges by purchasing through a discount broker such as Bestinvest, Cavendish Online, Hargreaves Lansdown and others.
Weekly bills give food for thought
Extra scrutiny
PLAN your food shop and visit the supermarket just once a week, says Andrew Hagger, personal finance specialist at Moneycomms.
“Mysupermarket.com allows you to compare the cost of your weekly shop. Don’t forget to use the food in your freezer or cupboards.”
Cancel non-essential direct debits, such as gym membership or magazine subscription, he adds.
Before making any larger purchase, compare prices online at Pricerunner.co.uk or Kelkoo.co.uk.
BrandAlley.co.uk offers discounts of up to 70 per cent on fashion, beauty and homeware.
Cashback sites
Cashback websites such as Quidco and TopCashBack give you money back when you buy a vast range of goods and services from thousands of companies.
TopCashBack’s current deals include £50 cashback on shopping at Tesco.com and £101 cashback on utility supplier npower’s dual fuel tariff.
Sites are typically free to join, with no subscription fee, says David Black, banking specialist at Consumer Intelligence.
“There’s plenty to choose from, including Cashback Network, Fatcheese, GreasyPalm, Mutual Points, Quidco, Rpoints and TopCashBack.”
Website VoucherCodes.co.uk offers free vouchers and discounts from a host of retailers, from the AA insurance to high street fashion chain Zara.
Watching the pennies
It is easy to fritter away small amounts of money, but it all adds up over time, says Sheragh Beirne, managing director of GE Capital Direct. “Taking a packed lunch to work and cutting out your morning cafe latte could save about £7 a day. Over the course of a 45-year working life, that amounts to more than £75,000.”
Website Comparemyspend.com includes a free financial health checker that allows you to compare your spending habits against similar people, to see where you are spending too much.
There’s even a special iPhone app designed to help you cut out impulse buys, called OrSaveIt, which tots up all the money you save when you say no.
