Don't be scared when it comes to tackling horror-show finances

Take time at Halloween to make your finances less frightful. Image: PA

In many cases, there may be simple steps you can take to spirit some of these problems away. Here are five money horrors and the action to take to address them.

Staying on your mortgage lender’s standard rate

Home-owners whose initial mortgage deal comes to an end may find themselves sitting on their lenders’ SVR – when they could potentially be better off switching. The average two-year fixed mortgage rate on the market fell to 2.49 per cent in October, from 2.53 per cent in September, according to Moneyfacts.co.uk. So now could be a good time to shop around.

Paying more than you need to for your car insurance

Comparethemarket.com has found 62 per cent of drivers don’t switch provider, meaning they could be missing out on a cheaper deal elsewhere. It says the average saving for switching stands at £113.09. Simon McCulloch, a director at comparethemarket.com, says: “If shopping around became the norm for the majority of drivers, the increased competition would help drive prices down.”

Standing by while your savings suffer

Tom Adams, head of research at savingschampion.co.uk says it’s worth seeking out the best returns available for your rainy day pot of cash savings.

“If you don’t take any action, providers will not necessarily be tripping over themselves to help improve your return,” he said. “Even with the base rate going up in August 2018, many providers did not increase all of their savings interest rates and of those that were increased, not all have been raised by the full 0.25 per cent.

“Don’t dismiss a provider because you haven’t come across it before, make sure that funds deposited with them are covered by the Financial Services Compensation Scheme and, if you have any doubts, sticking to the £85,000 limit per person, per banking licence should cover you should the worst happen. In order to improve your savings returns, you may need to take a well-informed leap of faith and consider a name you are less familiar with.The worst thing you can do is accept poor-paying accounts as, with a little effort, your pocket stands to gain by being active.”

Paying the loyalty penalty with your energy bills

A string of energy providers have recently announced bill hikes, so it is worth having a look around and asking your current provider about other tariffs as well as seeing what other suppliers are offering.

Also check that you’re not wasting energy. Making sure appliances aren’t left on standby and only boiling the amount of water in the kettle could help.

Paying more than you need to for your borrowing

It may be possible to cut the cost of your borrowing by shifting the balance to a credit card which has a 0 per cent initial interest-free period. But there are some factors to consider in weighing up whether it’s worthwhile, such as any fees for moving to the new card, and whether you can afford to clear the balance at the end of the zero interest period, after which the interest could surge.