GIVE YOURSELF A PAY RISE
Don’t leave it to your boss – use our guide to make your money work harder
LOWER prices, including cheaper petrol, suggest inflation-beating pay rises may be more common this year than last. But do not leave it to the whim of your employer – take control and award yourself a bumper rise in 2015. Here, The Mail on Sunday shows you how to get a grip on household finances – and boost your income in the process.
SWITCH AND SAVE
THE swiftest way to achieve a decent do-it-yourself pay rise with minimum effort is to reduce everyday bills. By switching expensive energy supplier or insurance provider, you can slim down your household costs.
Comparison website u-Switch says those people who have never moved energy provider can save more than £400 on their annual bills if they transfer both gas and electricity.
Meanwhile, website comparethemarket says one in three households can save at least £100 by switching buildings and contents cover, while half of motorists can save up to £230 on their annual car insurance.
Add these gains together and that is a £700-plus saving – nearly 3 per cent of the £25,000 average annual salary, comfortably beating annual inflation, which is now 1 per cent. Move your broadband, credit card or mobile phone supplier and the family budget will look even fitter. But the biggest single gain can be achieved by transferring one of the family’s largest costs – the mortgage – on to a cheaper rate.
David Hollingworth, of mortgage broker London & Country in Bath, North Somerset, says families with an average £150,000 mortgage could save more than £200 a month by remortgaging.
For example, a £150,000 repayment mortgage over 20 years at a standard variable interest rate of 4.74 per cent costs about £970 a month.
But a borrower switching to a twoyear fixed rate from Yorkshire Building Society, priced at 1.39 per cent, would see monthly costs cut to £716. There would, though, be a £975 fee to pay.
West Bromwich Building Society charges 1.89 per cent for a two-year deal with a £199 fee and free valuation and legal work. This would cut the monthly cost to £750.
Hollingworth says: ‘As well as saving now, borrowers can lock in their rate and protect themselves against possible rising mortgage costs in the future when the Bank of England base rate starts to climb.’
Nicki White is starting the year £120 a month better off after switching mortgages.
She has transferred the mortgage on her three-bedroom semidetached home in Wellingborough, Northamptonshire, from a 4.78 per cent interest-only loan with Northern Rock to a two-year fixed rate at 2.99 per cent with Woolwich, part of Barclays.
Nicki, 41, says: ‘It was easy to do and I will put the savings towards my wedding in September to my fiance Darren.’
Nicki, who works for a travel company, says: ‘I try to be good with money and even use a spreadsheet on my computer to keep on top of my finances. Some people say it’s a little obsessive but I don’t mind.
‘I often switch both home and car insurance and although I have yet to see whether I can get a better energy deal, I will be tackling that shortly.’
DECLUTTER FOR CASH
JUNK clutters up many people’s houses but you could be sitting on an untapped goldmine.
Research shows that the average house has 186 unwanted items – from clothes to old mobile phones and, of course, unwanted Christmas gifts.
The internet is a good place to get started on a clear-out, with eBay the best known marketplace. Sellers can list up to 20 items a month for free in either an auction or fixed price sale. Above this number, it charges 35 pence a sale.
Other internet auction websites include e-Bid, Etsy and CQ-out. Some let you sell at a fixed price.
When the weather improves, it can be worth trying a car boot sale. It typically costs between £20 and £25 for a pitch. A list of events and locations can be found at websites carboot-calendar and carboot-junction.
To shift CDs, DVDs and computer games, try websites such as musicmagpie. List your CDs, for example, and musicmagpie will offer a price.
If acceptable, it will send you a prepaid envelope for you to send in the CDs – and it will pay up.
CASH IN ON SPACE
NOT only can you clear out clutter but you can put your newly-found space to work by renting it out for a regular income. Even a spare drawer or space under a bed can earn cash.
One person generating an income from surplus space is IT and systems developer Jan Rees. The 48-year-old is making £150 a month by letting out the loft space in his home in Ealing, West London. Jan is married to teaching assistant Karen, 51, and they have three children Amelia, 16, Felix, 14, and Louis, 12. He says: ‘We have a reasonably large loft which we haven’t converted but I boarded up the floor so it could store boxes.
‘I used the website Storemates which organises contracts with the storer so there’s a level of formality. It also organises insurance for the storer as part of its service.’
He adds: ‘At the moment I have four customers, including a photographer who lives abroad but leaves photographs and frames in our loft for when he exhibits in this country.
‘It really is money for nothing – and is relatively painless once you have got over the mental hurdle that you have other people’s items in your home.’
FIND LOST TREASURE
A £4BILLION financial fortune lies unclaimed in the UK, including dormant savings accounts and forgotten pensions. Dormant sav-
ings are defined as either current accounts with no activity over 12 months or savings accounts with no activity for at least three years.
If you have an account fitting either definition, use website mylostaccount. Through this, you can also trace lost National Savings & Investments products. Share register Equiniti last year reunited more than 67,000 investors with unclaimed funds worth more than £61million.
Duncan Stevens, head of asset reunification at Equiniti, says: ‘Death, emigration or even just a change of address may mean that investors are unwittingly parted from their investments.’
Flotations of mutual insurers and building societies unleashed billions of pounds in windfall cash payments and shares to millions of customers. Yet many sit unclaimed.
Insurer Standard Life, which demutualised in 2006, recently launched a campaign to reunite 73,000 people with money or shares they failed to claim.
PUT SAVINGS TO WORK
ONCE the ‘pay rise’ cash has been realised it makes sense to put it to work.
Financial adviser Alison Treharne of Shore Financial Planning in Plymouth, Devon, says: ‘Start the savings habit by putting away a little of your gains.
‘But make sure your money goes in to the best paying savings accounts.
‘Websites such as SavingsChampion and moneyfacts can help you track down the best deals.’
It might be worth downloading an app that can encourage you to save.
First Direct recently launched Saveapp for iPhones that encourages savers, not just those who bank with First Direct, to keep to their financial goals through regular prompts.
Internet banking customers of Nationwide Building Society can use app ImpulseSaver to transfer cash from their current account to their savings account.
Nationwide customers with Android phones can also use the app on compatible smart watches – the first bank to get in on this latest technology craze.
Treharne recommends making current accounts work harder too. She says: ‘Pick one that gives you extra value such as cashback on everyday spending, which many now do.’
Santander’s 123 account is one of the most generous. Although you pay a £2 monthly charge for the account, holders can quickly negate this by the cashback they earn.
Finally, Treharne says: ‘Don’t neglect pension saving. For every contribution you make, the Government will top it up by 20 per cent if you are a basic rate taxpayer or 40 per cent if you are a higher rate taxpayer.’