To help get financially fit in 2017, we’ve pulled together 8 simple tips,with the help of TSB< that may help people check if they are making their money work hard for them, and what to do to make sure the pound in their pocket goes a little bit further over the next 12 months.
- Savings and ISAs
With interest rates at an all time low, it is well known that savings accounts and ISAs aren’t what they used to be, but that doesn’t mean they should be ignored.
· Some banks offer good fixed regular savings accounts paying 2 per cent or more in interest.
· ISAs can be another great way to save up to £15,240 a year tax free. Though you can’t pay in to more than one ISA at a time, remember your allowance resets every financial year so have a look at the best option for you before April 1 2017.
- Current Accounts
When was the last time you switched your current account for a better deal? The chances are that you are one of the millions of Brits who has never switched their bank account. With more competition amongst high street banks, some providers are now paying higher interest on current accounts than they do for savings accounts – 3 per cent and more in some cases
Plus there can be a cashback offer when you use your contactless debit card. TSB offers 5 per cent cashback on the first £100 of contactless spending and 3 per cent interest on balances up to £1,500. It’s worth checking out websites like uSwitch or Money Saving Expert for the latest offers and introductory bonuses too.
Though savings rates can be low, the current interest rate environment means that mortgage rates can be low too. With rates this low it’s worth speaking to a broker or a lender about your remortgaging options. By locking in a lower rate now you could substantially reduce your monthly mortgage repayments. Just remember to check the detail for things like product fees or early repayment charges to ensure you are getting the best deal for you.
- Credit Cards
If you have credit card debt, then it’s definitely worth prioritising this to get it under control. Often credit cards have high interest rates, way higher than any savings rates, so making sure you are on top of this debt is important.
If you can, it may be worth using some of your savings to pay off this debt. If you don’t have savings then it could be beneficial to transfer the balance to a 0% interest balance transfer credit card to allow you to gradually pay off the card in full before the 0% period ends. Shop around for the best deal and keep an eye out for any fees. Like all these things, it’s important to check the details before you sign up.
If you don’t have credit card debt and always pay off your monthly balance in full, then think about making your credit card work for you; either with reward points, cashback or air miles. Once again though, check for fees. Some providers charge you for such perks which might mean it’s not worth your while.
It’s always a good idea to check your eligibility for a card with comparison sites like Money Saving Expert before applying as this leaves a ‘soft-search’ on your credit file which other lenders can’t see.
- Personal Loans
If you do need to borrow a larger lump sum for something like a new car or home renovations, taking out a personal loan can be a handy way to borrow over a longer period. Interest rates have fallen on some loans to below 3 per cent making those much cheaper than using your overdraft or some credit cards.
Personal loans can also be a great way to pull all your debt together into one easy, affordable monthly repayment.
Some lenders have their own application criteria, so before applying for a loan do a soft search and eligibility check to see if you are likely to be accepted and the rate you’re likely to be offered before formally applying.
- Home Insurance
Home insurance can be a bit of a minefield with some insurers packaging-up cover that homeowners neither want nor need. According to research conducted by TSB, people on average stick with their current insurance provider for three years and three months without reviewing it.
It definitely pays to review your annual policy each year to check that you are getting the best deal on price, as well as the most appropriate cover so you are not overpaying or being under or over insured. TSB for example offers insurance tailor made to an individual’s circumstances.
If you are thinking about financial planning for the future and passing on money to your children, it is worth planning early. Each year individuals can gift £3,000 tax free without paying inheritance tax, as well as small gifts of £250. If you gift an amount, and then live more than seven years, that gift becomes free of inheritance tax.
Another way to give to your children or grandchildren is through a Junior ISA. They typically pay higher levels of interest, for example, TSB Junior ISAs pays 3 per cent interest.
And if you give to charity regularly, then it is worth seeing if your workplace operates ‘Give as You Earn’, a flexible scheme that allows you to donate to charities before tax, meaning they and you are both better off.
- Direct Debits
Another good practice at the start of the year is to gather all your bank and credit card statements together and go through them with a fine toothcomb. You may be surprised at the number of direct debits and regular payments on there for services that you never use, maybe gym memberships, subscriptions to websites or magazines, or even old bills.
For more hints and top tips check out TSB’s Straightforward Money blog, or seek specialist advice from free, independent organisations like the Money Advice Service or Step Change Debt Charity as well as comparison sites.