COVER Save & make money today!
April 6 marks the start of the new tax year – the ideal time to refresh your finances and see where you can free up cash and get new income, says money writer Sarah Jagger
1 Earn tax-frEE cash
from april 6, you can earn an extra £1,000 a year tax free. the trading income allowance lets you make up to £1,000 a year by selling goods or providing a service such as gardening, ironing or cleaning. You can also sell skills online on sites such as www. skillshare.com or www.fiverr. com or make money from your hobby by selling your goods through an online market place such as eBay or Etsy. the only catch is that the £1,000 tax break is available for one or the other – so if you earn extra cash doing a friend’s garden and you make and sell jewellery you can only do one of them tax free.
2 saVE on EssEntiaLs
Unless you tell your insurance providers that you don’t want your policies to continue, they will automatically renew at the end of the year. The main problem with this is that insurers usually increase prices in the second year to recoup the cost of discounts offered from the first year! Compare deals and switch every year using websites such as GoCompare.com to be sure you’re paying the best possible price. Switching energy providers could save you a considerable amount over a year. And when was the last time you reviewed your broadband deal? The best place to begin is a comparison website, where they will show the different tariff options. Try Yours Switching Energy (www.energyhelpline.com/yours or 0800 008 7777) and Yours Switching Phone and Broadband (broadband.yours. co.uk or 0800 083 4311). When buying goods, look for codes and cashback sites. If you’re over 60, take advantage of senior discounts. For free things to do, visit www.eventbrite.co.uk
3 turn You homE into a monEY spinnEr
Bedroom going spare? Earn up to £7,500 tax free by renting out furnished accommodation in the home you live in. householders letting a room earn around £8,500 a year in London or £4,860 in Leeds, according to www. spareroom.com. Just make sure you declare extra rental income to the tax office (hmrc) and tell your mortgage provider. if you want a weekday-only lodger, try www.mondaytofriday.com and www.fivenights.com. Earn an additional £1,000 annually tax-free by renting out unused space at home. You could let your loft or spare room as storage space for household items, your drive for a parking space or your garden as an allotment or campsite. try companies such as www.storemates.co.uk, www.justpark.com or www.campinmygarden.com
From April 6, you can earn an extra £1,000 a year tax free
Have a weekly no-spending day Speak to lenders and let them know you’re in difficulty Find out how you boost savings with an ISA on page 77
4 Boost savings
“Consider unfamiliar brands to get more competitive rates on bank accounts compared to the big high-street banks,” says Rachel springall at www. moneyfacts.co.uk. “For example, natWest pays 0.01% on its easy-access account but RCi Bank pays a top rate of 1.10%. High-interest current accounts are another great way to earn extra. nationwide pays 5% for the first year on its FlexDirect account while tsB pays 3% – however, credit interest on current accounts is typically paid only on limited balances, so keep this in mind.” Have a savings’ goal such as a holiday to help motivate you to tuck away more. Regular savings accounts are perfect for this goal, with HsBC, First Direct, nationwide and M&s Bank paying 5% for current-account holders. Build in a savings’ cushion for emergencies, ideally enough for up to 12 months’ expenses.
5 Deal WitH DeBt
some nine million of us think we have a debt problem, with almost five million people awake at night due to debt worries, according to the Debt advisory centre. Don’t ignore it – it will only make the situation worse and lenders will just add additional interest and charges to what you owe. speak to lenders and let them know you are in difficulty. Don’t bottle it up, either – keeping debts secret just adds to the stress. get in touch with a debt advice charity to get back on track – try www.stepchange.org (0800 138 1111) or the National Debtline’s www.mymoney steps.org (0808 808 4000) or www. citizensadvice.org.uk (03444 111 444) offers a web-chat service. also, find out if you’re entitled to welfare benefits or grants at www.turn2us.org.uk (0808 802 2000).
6 ContRol spenDing
as household budgets are squeezed, cut back on non-essential spending. use smartphone budgeting apps – such as wally, ontrees or the citizens advice Bureau Budget tracker – or just pen and paper to record what you spend daily. in a three-month experiment by insurer royal london people using this approach reported striking changes in spending simply because they were detailing outgoings. taking out enough cash for the week will help remind you of your budget – and you’re more likely to think twice about handing over a tenner than zapping your contactless card. try a no-spending day once a week, leaving your purse at home. when you buy a new item, put the equivalent in your savings. if you can’t afford to do this, don’t buy it.
7 get tax savvy
“it’s a simple equation – less tax to the government means more money for you. there are many ways to arrange your financial affairs that will save you large amounts of tax and which won’t cause so much as a raised eyebrow from the taxman,” says Danny Cox at Hargreaves lansdown. “Make the most of your allowances and tax bands. the personal allowance is now £11,500 (since april 6), so a couple can receive up to £23,000 a year taxfree with the right planning. Use all of your other tax-efficient allowances because if you don’t, you will lose them. these include using salary-sacrifice schemes. also make sure your tax code is right,” he adds.