(Financial) New Year’s Resolutions:

The New Year is a good time to think about your finances, and especially seeing if you can save some money! Here are some things that might be worth thinking about:

 “The loyalty penalty”

Our latest national research shows that the public is paying £11 million each day more than we need to because of the ‘loyalty penalty’; which is where companies charge old customers more than they charge new customers when they renew their contracts. This more than £4 billion rip off is going to be investigated by the Competition and Market Authority this year as a result of our recent ‘super complaint’.

Save money by making sure that you don’t fall foul of this practice. Make sure you pay attention to how much any ‘renewal’ costs might be. Things to take extra attention of include the renewal of insurance policies – especially car insurance. So this year make sure to check how much your various renewals cost, and shop around before agreeing to accept quotes. When you have found better deals – it’s still worth speaking to the original provider to see if they are able to meet the better quote you have found.

 Changing your fuel supplier:

With the winter coming to its coldest - it’s a good time to think about your energy costs and your energy supplier. First start by checking with the council to see if your household might qualify for any insulation or energy efficiency grants to help reduce the costs, and then you should check whether your current supplier could be beaten. A good place to see what’s available will be the personal finance pages in the weekend newspapers. The Citizens Advice service puts a regular table of client satisfaction for the various energy companies – it’s a good idea to check with this as well before deciding to change. When you do change, make sure you take meter readings – and perhaps take a photo with your phone, you don’t want to be paying more than necessary to the more expensive older supplier by them over estimating how much energy you have used before changing.

Phone contracts:

These are also one of our greatest concerns for poor value. Last year we produced a report that looked at how many people stay on poor value phone contracts years after they have ‘paid’ for their phones. Be sure to look into changing your phone contract regularly and you could quickly save money.

Mortgages:

Most people think that interest rates are heading upwards – and there could well be a noticeable adjustment after ‘Brexit Day’. Now might be a good time to look at finding a new mortgage provider, and if you know that you are not planning a house move, you could think about fixing your interest rate over the next few years. Be careful about fees for changing your mortgage - and factor this into any savings you are likely to make by changing. You could also look to use any monthly saving to over pay you mortgage meaning that over the whole life of the mortgage you pay less interest, but you need to check what limits on over paying might be attached to your mortgage.

Pension auto-enrolment:

The new tax year will see many people being made to pay more onto their pensions under the government’s system of auto enrollment. In the longer term paying into a pension is a tax efficient way to save –with the government paying back tax on your contributions (within certain limits), but the earlier you start saving a pension, the larger your pension is likely to be.

Reduce the cost of any borrowing:

We all need to borrow from time to time, but are not always good at checking whether we are borrowing at the best cost. Keep an eye out on the interest rates you are paying over the year – the APR – so that you can compare that cost more straight forwardly with other sources of credit. If you are struggling to find credit at low cost, then perhaps speak to your local credit union. You can find out more from www.findyourcreditunion.co.uk.

If you are having any problems with managing your finances then your local Citizens Advice can help negotiate with your various creditors – and can discuss various debt management strategies that will help you get things under better control. For information phone 0300 3309 074 or visit www.salfordcab.org.uk

 

Tom Togher,

January 2019.