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Don’t let those theatre tickets expire Follow our 12 steps to get your finances in shape, because...
THERE is no better time to get your finances in shape than early in the New Year. Here, The Mail on Sunday’s HOLLY BLACK gives a dozen tips on how to enjoy financial success in 2018.
SWITCH TO A ZERO PER CENT CREDIT CARD
IF you are paying interest on your credit card because you have an uncleared balance it is worth trying to switch to a zero per cent deal.
The best deals mean you can borrow interest-free for more than three years. Some cards will charge a fee for moving over your existing balance from another card issuer so it is vital to read the small print.
James Daley is managing director of Fairer Finance. He says: ‘It is important to make sure you are not paying any unnecessary interest on your debt. Transferring to a zero per cent credit card will give you extra financial breathing space and ensure every penny you pay back is reducing your debt.’
Santander bank has a 39-month interest-free deal with no balance transfer charge. But it does apply a monthly £1 fee to hold the card. Lloyds Banking Group and Sainsbury’s Bank have 33-month interest- free deals but with balance transfer charges of 0.57 per cent and 0.59 per cent respectively.
CHANGE YOUR BANK CURRENT ACCOUNT
RESEARCH shows that UK adults are more likely to change their life partner than their bank account. But switching your current account can bring additional perks such as travel insurance or breakdown cover. You may also get cashback as an incentive to make the move – and a better bank account as a result.
M&S Bank, for example, offers a £ 125 gift card to new current account customers switching their main account as well as a £ 5 monthly top- up if you meet its criteria. First Direct pays £ 100 cash for those moving to its 1st Account. But base your decision on all of the account features, not just the cashback incentive.
GET THE BEST MORTGAGE DEAL
INTEREST rates recently went up for the first time in more than a decade, but there are still plenty of excellent mortgage deals available to homeowners.
If your current deal has expired it is important to look for a new one, otherwise you will be pushed on to the lender’s standard variable rate and most likely pay more than you need to.
Rachel Springall, expert at financial data scrutineer Moneyfacts, says: ‘The average standard variable rate is now 4.75 per cent, but the average two-year fixed loan rate is less than half that at 2.35 per cent. So it is key to find the best loan deal to reduce your monthly payments.’
For borrowers with a 10 per cent deposit, Barclays offers a two-year fixed rate at 2.09 per cent with fees of £399, and a five-year deal at 2.49 per cent with fees of £999.
Those with more equity in their home can get even better rates. Yorkshire Building Society offers a two-year fixed rate of 1.24 per cent with fees of £495 for those with a 35 per cent deposit.
SHIFT YOUR SAVINGS
WHILE interest rates on high street savings accounts remain stubbornly low, it still pays to shop around. For example, BM MANY of us will have received a gift card for stores or a show this Christmas and put it aside until there is something we really want to buy or see. But waiting too long could cost you.
Gift cards have terms which mean many Savings – part of Lloyds Banking Group – offers a leading rate of 1.45 per cent whereas NatWest pays a measly 0.1 per cent on its Instant Saver Account. If you had £5,000 in savings you would earn interest of £72.50 over a year on the BM account, but the NatWest account would pay just £5.
SHOP AROUND FOR UTILITY PROVIDERS
WHETHER it is home insurance, car insurance, energy provider or broadband – loyalty gets you nowhere. Shopping around each year is quick, simple and can save you a lot of money.
The Mail on Sunday has campaigned long and hard to stop insurers ripping off loyal customers by not offering them the best deals. But until insurers have a change of heart, you are going to have to do the legwork.
Comparison websites such as uSwitch can help you find the best deals. You can save even more if
USE YOUR VOUCHERS
expire, leaving your perfect present worth nothing. Gift cards for ticket website Ticketmaster, for example, could buy a trip for a hit show such as Mamma Mia! pictured above, but expire after a year, M&S gift cards last two years and Amazon gift cards are valid for ten years from their date of issue.
Some cards even start to charge you after a certain period, eating into your balance and quickly you pay your premiums upfront rather than taking the monthly direct debit option. Fairer Finance’s Daley estimates that those who have not shopped around recently could save a four-figure sum this year by switching all key household bills.
PICK UP A PENSION
WHILE many employees will now have been automatically enrolled in their workplace pension scheme, millions of people across the UK are still not saving for retirement. Some workers will have opted out of their employer’s pension scheme, while only 12 per cent of the self-employed are saving for retirement.
The New Year is the perfect time to get your retirement savings back on track by contributing to a pension or increasing your monthly savings. It is also a good time to use the Government’s free pension tracing service to track down any old pension pots you might have leaving you with nothing. The One4All card, for example, charges an ‘inactivity fee’ of 90p a month, starting 18 months after it is issued. That could see the value of a £20 gift card slashed to just £9.20 after two and a half years. misplaced and working out what level of state pension you can expect to receive when you retire - using gov.uk/check-state-pension.
Those who have not yet started saving can set up a cheap pension with an online provider such as Fidelity or Hargreaves Lansdown.
SAVE ANY LOOSE CHANGE
SETTING aside t i me to transfer money to a savings or investment account is easy to put off, but a number of mobile phone apps now let you do it at the touch of a button.
Holly Mackay, founder of financial website Boring Money, likes app MoneyBox which rounds up your change from any small purchase you make and puts it into your chosen savings or investment account.
Several banks have their own version of this too – it means a purchase of £10.86, for example, would be rounded up to £ 11, with 14p going into savings. It might not seem much, but those pennies can quickly rack up. If you saved just 28p a day from your spare change you would have more than £100 after a year.
GET A CURRENCY CARD
IF you are thinking ahead to warmer times and considering booking your next holiday, then consider a currency card.
Specialist pre-paid cards such as Caxton Mastercard let you lock in your exchange rate ahead of time so you do not have to worry if the value of the pound falls.
Of course, this also comes with the risk that the value of the pound rises and you miss out on some extra holiday spending money.
Other options include getting a debit card which does not charge you for overseas spending, such as Monzo or Revolut.
If you are making purchases on your card abroad always pay in the local currency.
REVIEW YOUR DIRECT DEBITS
WITH so much of our spending done on credit and debit cards and online, it is easy to lose track.
Mackay suggests printing off your most recent bank statements and checking all direct debits and standing orders to ensure you are not paying for t hings you no longer use.
Old magazine subscriptions or gym memberships you thought you had cancelled are easy to miss if you are not checking your bank statements each month.
Mackay says: ‘Automation makes life easy, but it can also make it expensive. Recent research from Citizens Advice suggests the average person spends £160 every three months on services they do not want or are not using.’
CHECK YOUR INVESTMENTS
THE start of the year is an ideal time to take stock of how your investments have done and to make sure you are happy with where your money is invested.
Check how the performance of your investment funds compares to rivals and make sure you are still happy with the geographic spread.
You should also ensure you are not being overcharged. Some funds charge significantly more than others for doing exactly the same job.
For example, the Virgin Money All Share FTSE t racker fund charges an eye-watering 1 per cent just for replicating the performance of the stock market, whereas the Vanguard UK All Share Index fund does the same thing for just 0.08 per cent.
FINALLY, USE YOUR BONUS POINTS
ONE area where loyalty can pay is with your shopping where you can take advantage of stores’ loyalty schemes.
While many of these are not as generous as they once were, it still makes sense to take advantage of the points.
Tesco’s Clubcard scheme, for example, earns you one point for every £1 you spend in-store. Each point is worth a penny in store but you can get up to four times their value if you spend the points on vouchers with one of its partners. For example, £2.50 of points gets you £ 10 to spend at restaurants such as Zizzi and Pizza Express.
The Boots Advantage card is one of the more generous retail loyalty schemes with four points awarded for every £1 spent in store and each point worth a penny.
A NEW wave of so-called ‘smart’ electronic devices designed to slash household bills by hundreds of pounds a year will hit the market this year.
Many talk to each other over the internet, using ‘artificial intelligence’ to decide when is best to turn on – or off – your central heating or lights. Others operate spy cameras to watch out for burglars or keep tabs on your energy, water or gas usage – even spotting leaks.
The Mail on Sunday’s TOBY WALNE assesses just how good these gadgets actually are by testing them.