Top tips to give your finances a spring clean

Spring cleaning can prove rewarding. Photograph: PA
Spring cleaning can prove rewarding. Photograph: PA
0
Have your say

Giving your finances a spring clean can be a great way to ensure you’re on top of your budgeting and making the most of any chances to save. Here are suggestions from the experts on how to have a financial clear-out.

Ditch and switch

Switching credit card, current account, energy or insurance providers can create savings. Kevin Pratt, consumer affairs expert at moneysupermarket.com, says: “If you’ve got a credit card balance that’s costing you interest and you can’t clear it, you can transfer it to a card that will not charge interest for up to three years, giving you a chance to reduce what you owe. You’ll usually be charged a fee that’s calculated as a percentage of the amount you’re transferring, but the interest saved can often outweigh this.”

As for energy providers, he adds: “If you’ve not switched energy provider for a couple of years or more, or have never switched, you’re probably on an expensive variable rate tariff. Switching to a fixed rate deal could save you £250.”

Dust off savings accounts

Rachel Springall, a finance expert at Moneyfacts.co.uk, says: “The challenger banks are still offering some of the best rates on the market, so it’s wise for savers to consider these more unfamiliar brands.” She suggests using apps which help you work out what you can afford to save, and adds: “Opening a regular savings account can also spark the savings habit.”

Pack insurance into holiday planning

Malcolm Tarling, a spokesman for the Association of British Insurers (ABI), says: “Each year, travel insurers help hundreds of thousands of travellers whose holiday did not work out as planned – from having to cancel going, to falling ill abroad and needing emergency medical treatment. So it is vital that you arrange travel insurance well in advance. It can make the difference between good holiday memories and a very expensive and traumatic experience.”

Give pensions a workout

Sarah Coles, a personal finance analyst at Hargreaves Lansdown, says: “The growth of your pension pot comes down to three things: how much you contribute, how long the money is put away for, and how much your investments grow. The only part of this that doesn’t involve you working harder is investment performance, so it’s worth considering where your pensions are invested.”

Sort your mortgage

Mark Harris, chief executive of mortgage broker SPF Private Clients, says: “The general movement in mortgage rates is upwards, and anyone on their lender’s standard variable rate in particular might want to think about re-mortgaging sooner rather than later. There is no need to panic, but if you would struggle to pay your mortgage were interest rates to rise, then a fixed-rate deal makes sense and there are still some very competitively priced two and five-year fixes. There are longer fixes available but borrowers must not fix for longer than they are absolutely sure about – or you will have to pay an early repayment charge to get out of the mortgage early.”

How borrowing slightly more could save you in the long term

It may seem like a strange idea, but in some cases it can be possible to save money on charges by borrowing slightly more than you need on a personal loan, analysis reveals.

Brian Brown, head of insight (banking and general insurance) at Defaqto, says: “For many lenders, the amount of interest charged – the annual percentage rate or APR – goes up and down as the amount you borrow increases. Therefore it may be more cost effective to borrow a slightly larger amount to achieve a smaller APR which will result in the borrower paying less interest overall. Just by increasing the amount you borrow by £100, you could save yourself hundreds of pounds. Most importantly, consumers should only borrow what they can afford to pay back to avoid getting into financial difficulties.”

Consumers upbeat on income but worried about job security

Consumer confidence improved in the first quarter of 2018, a report by the Deloitte Consumer Tracker found. Overall consumer confidence reached –6 per cent in this period, up one percentage point from -7 per cent in the final quarter of 2017. The report said people are feeling more upbeat about their disposable income, although confidence in job security has fallen.

Online loan-seekers duped by fraudsters into paying £740 fees

More than £3.5 million was lost to frauds last year where people were tricked into paying up-front fees for loans that never arrived, the City regulator says. The Financial Conduct Authority says victims are often targeted while searching for loans online, losing £740 on average.