10 ways not to be an April Fool with your moneyHow to be smart with your money on April 1
01 April 2011
'A fool and their money are soon parted' goes the old expression. So, with April Fool's Day in mind, Which? experts show you 10 ways to avoid being foolish with your money.
1 Use your Isa allowance
As we come to the end of the current tax year, you should make sure that you have used your tax-free Isa allowance for 2010/11, and also pick a Best Rate Isa for next year's Isa savings. The overall Isa limit is currently £10,200, of which £5,100 can be placed within a cash Isa.
As of 6 April 2011 limits will rise each year in line with the Retail Prices Index (RPI). This means in 2011/12 the new overall limit will be £10,680, of which £5,340 can be placed within a cash Isa.
2 Switch savings accounts if your rate is low
Staying with your present savings account might also prove foolish. Which? research conducted in late 2010 showed that UK savers were losing out to the tune of £12 billion a year by keeping their money in poorly paying accounts.
In September 2010, we found that 47% of savings accounts were paying out 0.5% or less, and 25% were paying 0.1% or less. Switch to one of our Best Rate savings accounts to get higher interest on your savings.
3 Pay into a company pension
If you are working for a company that has a group pension scheme, you should join. There are two key advantages - pension contributions are a form of tax-incentivised saving, and if your employer makes a contribution to your pension this is like receiving additional pay. Not joining your employer's pension scheme essentially amounts to passing up free cash!
4 Don't use debt management companies
A debtor owing £5,000 who enters a commercial debt management plan could see half their repayments in the first year pocketed by the debt management company in fees. Check our debt guide and if you need help handling your borrowing, contact a free, independent alternative such as the Consumer Credit Counselling Service, Citizens Advice, National Debtline or Payplan.
5 Be careful when using your credit card
If you use your credit card to withdraw cash in the UK, chances are you'll pay a 3% handling fee and an APR of around 30%, as well as losing your monthly interest-free period. Use a debit card instead.
Meanwhile, using the wrong credit or debit card abroad could see you stung by additional fees for foreign exchange, which could significantly add to the overall cost of your holiday spending. Our travel money guide explains which plastic you should pick if you want to use a card overseas.
6 Don't stick with your energy supplier
Sticking with the same energy supplier year after year is one of the more foolish things you can do if you're trying to keep on top of your household bills. People who are loyal to their gas and electricity providers tend not to get the best deals.
If you've never switched suppliers, you could be missing out on hundreds of pounds' worth of savings a year - and switching via a dedicated website, like Which? Switch, is simple, quick and easy.
7 Never forget travel insurance
It's almost one year on from the Icelandic Volcanic ash disaster, but those whose holiday plans were affected by it won't have forgotten their distress and frustration.
If you're planning on a trip abroad this Easter, ensure you have the right travel insurance policy in place. While further volcanic eruptions are unlikely, you could require medical care while abroad, lose your baggage or have your holiday cancelled unexpectedly. Which? Best Buys are a good starting point if you're looking to find a quality travel insurance policy.
8 Buy holiday money in advance
Don't leave buying your travel money until you get to the airport - unless you have pre-ordered it online or over the phone. Exchange rates at airports are comparatively expensive, because they have to cover the cost of renting space at airports. You can find out more in the Which? guide to travel money.
9 Don't pay National Insurance if you don't have to
Make sure you stop making NI contributions if you carry on working beyond state pension retirement age (currently 60 for women and 65 for men).
To stop NI being deducted you’ll need to prove your age to your employer through a birth certificate or passport, or by giving them a certificate of age exemption (CA4140/CF384). Our NI guide will give you more information.
10 Don't just stick with your mortgage lender
Don't stick with your mortgage lender if you suspect you could get a better deal elsewhere. If you won't have to pay early repayment charges to switch mortgages, visit our mortgage deal finder to see how much you could save by remortgaging.
Also, see our lender ratings to find a lender that offers a good customer experience.
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