Top Money Tips from Nottingham Credit Union: January 2019

 

We detail below a number of money tips that could help improve your financial well-being.

 

1.  Check your standing orders, direct debits and regular payments

Review your bank statements and check all your standing orders and direct debits.  Are they still needed?

Many people waste £100s a year paying for things they don’t need or use.  Can you cancel any regular payments or subscriptions that are no longer needed?  (Care – make sure you aren’t still in contract, if you are under a contract speak to the provider first to see if you can cancel – if you stop making payments you have to make contractually, you may be fined and it could impact your credit file).

Your Bank account provider will be able to provide you with details of your standing orders and direct debits and will be able to cancel them if necessary – it is advisable to instruct your bank to cancel the payments and inform the company as well.

 

2.  Gas and Electricity

When was the last time you checked if you’re getting the best deal?  How long have you been with your current provider?  You may find you can cut your bills by shopping around. Try ringing a few providers or use price comparison sites (bear in mind that these aren’t always accurate and don’t always cover the whole market) examples of price comparison sites are www.moneysupermarket.com; www.uswitch.com; www.gocompare.com

 

3.  Council Tax

Many people are in the wrong banding and may be paying more than they need to. If neighbours are living in a similar property to yours, check with them to see if they are in the same band – you may be paying too much and could be entitled to a refund.  Your local council should be able to help with any queries.

 

4.  Create a Budget

Work out a plan of how much you spend each month on essential items (rent/mortgage, council tax, food, gas, etc.) and then work out how much you have left over to either be saved or to go towards “discretionary” spending (clothing, cable/satellite, nights out etc.).

Set yourself a budget to make sure that your outgoings are less than your monthly income and then try to stick to those limits. If you can, delay spending until you have money available and only spend if you are sure you can cover essential bills during the month.

A tip – for just one month make a note of everything you spend, start by listing all direct debits and standing orders, and then keep a track of every penny spent.  You may be surprised at how much you spend on certain items, and understanding where your money goes may help you set a budget.

The Money Advice Service provide a free online budget planner: https://www.moneyadviceservice.org.uk/en/tools/budget-planner

 

5.  Car and Home Insurance

Do you always stay with the same provider? When did you last shop around for cheaper car or home insurance?  Don’t automatically renew your policy without checking elsewhere first, some providers increase prices year on year for regular customers and a quick phone call or quote online could save you £100s.  It’s always a good idea to check your policy and make sure that it still covers all your needs.

Price comparison sites can provide quotes for car and home insurance but these do not always cover the whole market and it is not always clear if you are comparing like for like but it is a good place to check if your current policy is competitively priced.

Some examples are www.gocompare.comwww.moneysupermarket.comwww.comparethemarket.com

 

6.  Bank Account Fees – Packaged Bank Accounts

Many people have a Packaged Bank Account that incurs a monthly fee (anywhere between £24 and £180 a year) and comes with additional benefits, usually bundled insurance products.

If you are eligible and benefit from the add-ons, the packaged Bank account may be right for you – but if not, what are you paying for?

If you find that a packaged bank account is the best option for you, make sure that you are not paying for the same benefits elsewhere for example mobile phone insurance – separate policy, breakdown car insurance – your car insurance policy, travel insurance etc., and check the terms and conditions of each policy.

Many people have successfully claimed that they were mis-sold a Packaged Bank Account – did your bank clearly explain what was involved? Are you eligible for all the add-ons?  if you have been mis-sold the bank account, you could get a refund of the monthly charge.

For more information visit:  www.moneysavingexpert.com/reclaim/reclaim-packaged-bank-accounts/

 

7.  Bank Fees for Overdrafts

Banks often “allow” you to go overdrawn and this can be helpful if you have miscalculated a few days before pay day – however you may find you pay a daily overdraft fee as well as interest.  Check your bank statements and add up how much you have paid in the last 3 months – the daily fee will not be huge but can soon add up.  Balancing your bank account more often and ensuring you do not go overdrawn may safe you £100s over a year.

Shop around and check each banks charging policy; it may be cheaper to switch your account to another bank depending on how you use it. Some banks will give you money for simply switching your account to them, switching is usually quick and easy with the bank doing all the work for you.

 

8.  Late Payment Fees or Penalties

Make sure you make payments on time – some firms will charge a penalty fee if you are a few days late making the repayment, which can quickly add up.  Late payments can also affect your credit score.

Always speak to someone if you are struggling they may be able to help you.

 

9.  PPI (Payment Protection Insurance)

The deadline for making a claim is August 2019 – Banks and other organisations mis-sold payment protection policies to thousands of people.  If you were mis-sold PPI at any time make sure you submit a claim as soon as possible otherwise, you may miss out on £1000s.

For more information: www.moneyadviceservice.org.uk/en/articles/reclaiming-payment-protection-insurance

 

10.  Sales and offers

There are often sales/discounts in the shops or online usually claiming massive savings, which can be tempting and result in 1000’s of impulse buys every year.  All is not always as it seems.  Do your research is the item really a bargain or sold at a similar price elsewhere and do you really need it?

Remember a bargain is only a bargain if you were looking to buy the item before you saw it on offer.  If you are paying using a credit card or overdraft and cannot repay it straight away – is it still a bargain when you add on the interest or charges you will incur before you’ve paid it off in full?

 

11.  Cable/Satellite TV

How long have you had your current package, do you still need all the channels? Have you considered buying a box that provides free digital television?  It is great to have many channels but how often do you use them?

If you wish to keep your package as it is, have you telephoned them recently to see if there are any discounts available?  New customers usually receive better offers to tempt them to join but providers are often willing to match those offers for long standing customers.

 

12.  Christmas

It may be over, but it’s now less than 1 year until next Christmas!  Christmas can be expensive.  Consider opening a savings account now and put in as much as you are able during the year– it will be safe and you will be surprised how quickly it can add up and will help you keep within budget.  Nottingham Credit Union can help with a simple Xmas Savings Account.

 

13.  Credit Card Balance Transfers & Consolidation Loans

If you have a balance on your credit card that you are paying back slowly, consider transferring it onto a different credit card, some cards offer interest free transfers for a specified period of time.  Always check if there are any fees and if they amount to less than the interest you would pay on your old card.

If you do transfer the balance keep this card separate and do not make purchases on it as usually the interest free element of the balance will be cleared first and you could find yourself paying interest on purchases for a prolonged period of time.

Alternatively you may wish to consolidate one or more Credit Card debts onto a new loan account – you may be able to borrow at a lower interest rate and start to make real reduction to the amount you owe – Nottingham Credit Union will consider a loan application for Debt Consolidation.

 

14.  Mobile Phone

Although you may be paying one amount for your contract, it is usually made up of two elements, the cost of the phone and airtime.  Once your contract has finished consider changing to a SIM only contract or shop around for a new one. If you simply carry on paying the direct debit you will continue to pay for the phone long after it has been paid off.

Most providers will let you know when you are getting to the end of your contract but will not generally advise you that you could reduce the amount you are paying.

 

15.  Sign up for loyalty cards

Many supermarkets, shops etc. reward customers by allowing them to collect points on a loyalty cards every time they make a purchase.  These points can generally be converted into money-off vouchers, one off deals or discounts. Make sure however, that you are not tempted to spend more just to increase points.

 

16.  Pay bills monthly where possible

Providers, for example gas and electricity etc. often give reduced rates if bills are paid by direct debit.  Consider swapping to this payment method where possible to benefit from better rates and aid with budgeting

 

17.  Supermarket Own Brands

Buying supermarket basic and budget ranges can produce significant savings and avoiding big brands doesn’t always mean compromising on taste or quality.

 

18.  Check your Credit File

Companies use your credit score to determine if they want to lend money to you, open accounts, provide credit facilities etc. They also use your credit score to consider what interest rate to charge you.

Your credit score is based on a number of factors including previous repayment of borrowing, history of debt problems (IVA, CCJ, and Bankruptcy), account management and how up to date bills are etc.

It is always wise to keep an eye on your credit file and to try and improve it wherever possible.  Quick ways to improve your score include, check addresses on old accounts are correct, if you no longer have joint accounts with someone, ensure you financially de-link and cancel unused credit and store cards.  There are a number of companies that you can sign up to and who will provide you with your credit card score free of charge – you should not need to pay for this.  An added advantage is that you can check to make sure that borrowing or accounts have not been opened in your name fraudulently.

 

19.  Coupons

Although money off coupons are not as common as they used to be, there are often coupons in magazines and newspapers.  A number of large companies also offer customers coupons that can be printed off of the internet and can often provide quite large savings, particularly when used in conjunction with store offers.  Examples of companies who offer free coupons are:

Johnson and Johnson www.caringeveryday.co.uk  Proctor and Gamble www.supersavvyme.co.uk but there are many others.

 

20.  Tax

Take time out to understand your tax code and check that it is correct, if you are underpaying you could be faced with a hefty bill.  Also ensure you are not over paying and make sure you take advantage of the schemes that allow you to cut the amount of tax you pay:

  • Married Allowance –if you earn less than £11,850 you may be able to transfer your personal tax allowance to your partner, reducing their tax by £238 a year.  You can back date this to April 2015 as well.
  • Work Related Expenses Relief – if you work in a job that requires a uniform, tools, equipment or travel expenses that your employer doesn’t pay for, you can claim tax relief on the money  you have to spend.  You can also claim tax relief if you are responsible for cleaning a work uniform (such as a nurse’s tunic): https://www.gov.uk/topic/personal-tax/income-tax

 

21.  Consider Consolidating Your Debts

If you find that you have debts in multiple places for example a loan, credit cards, overdraft etc. it may be cheaper to transfer these onto a consolidation loan.  If you do decide consolidation is the best option, make sure that you cancel the overdraft and don’t use the credit card or you may find yourself back in the same position.  Nottingham Credit Union will consider assisting with a Debt Consolidation Loan

 

22.  Mis-sold Payday loans

MILLIONS of payday loan customers may be due refunds. Even if you’ve paid off your debts you may still be able to get a refund if you struggled to repay the money at the time.  Customers can still make complaints about firms which no longer operate, although it is less likely that they will receive a refund as they will have to apply directly to administration firms. Although, if their complaint is successful and they still owe debts this could mean you have to pay back less so it’s still worth complaining.

For more information: https://www.moneysavingexpert.com/reclaim/free-payday-loans-refunds/

 

23.  Mortgages

Are you paying too much for your mortgage – a recent Competition and Markets Authority report suggest that up to one million people could be paying more than they need for their mortgage.

It is believed that 10% of people who have been with their mortgage provider for some time could switch and make significant savings.

What are the terms of your existing mortgage, what interest rate is being charged and could you switch?  You need to ensure you understand all the costs associated with switching and in the first instance it is worth speaking with your existing provider.

 

24.  Broadband providers

Broadband customers on older tariffs sometimes pay higher prices for similar services – according to ismybillfair.com broadband customers are paying between 35 and 41% in “loyalty” fees.

 

25.  Complete a Financial Health Check

Whatever the situation with your finances, it’s good to know where you stand and that you are making the most of what you have. The health check, a new online money adviser from the Money Advice Service, is for everyone.  The Money Advice Service is an independent advice organisation, here to help everyone understand and manage their money better.  Taking just 10 minutes to answer some straightforward questions on the health check will give you a personalised action plan to help you sort out your money priorities now, and plan for the future whatever your goals may be.

www.moneyadviceservice.org.uk/en/tools/health-check

Nottingham Credit Union is community owned and operates “not for profit”.  It provides affordable loans and simple savings accounts.  Branches on Maid Marian Way, Nottingham and Clumber Street Mansfield.

For more information:  www.nottinghamcu.co.uk.