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10 ways to spring clean your finances and save money

Simple tips to look after your cash during lockdown

10 ways to spring clean your finances and save money

When was the last time you organised your tax-related paperwork, checked your car insurance deal or took an inventory of your direct debits and standing orders? Now might be the perfect time.

People up and down the country have been using the coronavirus lockdown to do something positive – whether it’s finally cleaning that bit behind the washing machine, or finding out exactly what is in the garage. So why not extend the spring cleaning spirit to your finances?

From switching energy provider to sharing your Netflix account, we reveal 10 simple tips that could save you hundreds of pounds.


1. Review your direct debits and standing orders

The first stop should be your bank statement. Look at all your outgoings for the past couple of months.

Is there an insurance policy for a phone you no longer use? Or a gym membership you should finally admit you’re never going to use?

Granted, most gyms will have frozen their memberships while they’re closed, but you can still consider your outgoings for whenever lockdown is lifted.

2. Check how much your savings are earning

There’s no getting away from the fact that the savings market is not looking good at the moment; Which? recently found that nearly half of fixed-term accounts have been withdrawn in the past month alone, and interest rates are declining across all areas.

But you could still get a better rate. If your savings have been languishing in one of the many accounts that pay less than 0.5% AER, now is the time to get them out and make them work harder.

If you don’t want to relinquish access, you could get 1.2% AER from the top instant-access accounts (correct at the time of writing), which at least brings a little bit of a return.

3. Gather your receipts and paperwork for 2019-20

If you pay tax by self-assessment, it may feel like you have only just dealt with your taxes – indeed, more than three million people left filing their 2018-19 tax return until the final day on 31 January this year – it’s always a good idea to get organised as early as possible.

Now that the 2019-20 tax year has finished, why not use some lockdown time to get all your receipts, invoices, bills, bank statements and other important documents together so they’re ready for when you submit your next tax return?

You don’t need to file until 31 January 2021, but if you have all the documents you need ready there’s nothing to stop you filing now. Even if you file early you won’t have to pay the tax owed until the end of January.

To make the process even easier, you could use the Which? tax calculator. It’s jargon-free, tots up your tax bill, and submits your return directly to HMRC.

4. Consider ways to get out of your overdraft

The Financial Conduct Authority (FCA) has told banks that no overdraft customers should be worse off than they were before the recent changes to overdraft prices came into force.

Many banks have also implemented interest-free overdraft buffers of up to £500 lasting for three months.

Nonetheless, if you’ve been in your overdraft for a prolonged period of time, it’s a good idea to get out of it before the buffers are lifted.

You could do this by:

  • using your savings to reduce to debt
  • use a 0% money transfer credit card
  • consider a personal loan if it’s at a low rate.

For more tips, see our news story on how to pay off your overdraft.

5. Check on your mortgage deal

If you’re lucky enough not to be in a position where you’ve had to ask your lender for a mortgage holiday, it is still worth checking you’re not paying more than you need to on your mortgage.

The most common mortgage deals are fixed-rates lasting for two or five years; you’ll repay the same amount each month, usually at a competitive interest rate.

If these deals come to an end, and you don’t remortgage onto a different deal, your lender will automatically put you onto its ‘standard variable rate’ (SVR).

Each lender sets its own SVR. The rate can be changed at any time, isn’t officially linked to the base rate and is usually much more expensive than the interest rates on fixed or tracker deals.

So, it’s certainly worth checking to see whether your mortgage deal is due to end soon or to see if you’re already on your lender’s SVR and shop around for a better deal.

The Which? Money Podcast

6. Get a credit card that works for you

The usefulness of your credit card depends on whether its features match how you use it. For instance, a 0% balance transfer card is great if you’re gradually paying off debt, but not so good if you want to use it to buy stuff – a 0% purchase card would be better.

So, make sure you’re using your credit cards in the right way to avoid paying more interest than you need to.

It’s also worth checking whether the features are still active; many only last for a limited time, after which you should consider getting a new card with a suitable deal.

However, this could be easier said than done in the current climate, as Which? research has found that the number of credit cards and loans on the market has shrunk, and some of those still available have restricted terms and raised costs.

7. Find a new car insurance deal

According to the recent GoCompare car insurance study, 4.7 million drivers have been caught out by the auto-renewal trap; when their car insurer automatically takes payment for a policy for another year before customers have had a chance to check for better deals.

It’s thought that this practice costs motorists £1.2bn a year in higher premiums – so it’s important to make sure you have a new deal lined up before your policy renews.

There are several things you can do to get cheaper car insurance, including paying for your cover in an annual lump sum, putting a lower risk driver on your policy and reducing the number of modifications that could up your premium – these could even include things such as new alloys.

8. Consider sharing your subscriptions

Entertainment has never been more important – but signing up to every service can soon add up.

Luckily, the likes of Netflix, Spotify and Amazon Prime offer shared accounts so you can split the cost.

For instance, paying for Netflix for one screen costs £5.99, but two people sharing an account that allows viewing on two screen costs £8.99 a month – or £4.50 each.

Even better, if four people split the subscription for four screens, they’d each pay just £3 each – cutting the costs of subscribing as an individual in half.

9. Find a better energy deal

With everyone spending much more time at work than usual – whether you’ve got your laptop and the radio plugged in all day to work from home, or you’ve got educational programmes on TV while you try to home school the kids – it’s likely energy bills will be pricier than usual.

To save money, you could consider switching to a new provider to take advantage of the latest deals and tariffs. Recent research from Moneysupermarket found that energy prices are currently at their most competitive levels in recent years, with 138 tariffs cheaper than the price cap.

You’ll just need to check whether you’ll incur a fee for cancelling your current deal and factor in whether this cancels out the savings you’d make.

10. Use your new Isa allowance

As of 6 April, we are now in the 2020-21 tax year – which means every adult’s £20,000 Isa allowance resets for another year. This is the maximum you can deposit into Isa accounts until 5 April 2021.

Unlike with a savings account, where savings interest over your personal savings allowance is taxable, any interest or profit earned from money held in an Isa will remain tax-free. So, maxing out your Isa allowance this year could reduce your tax bill.

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