Sometimes cutting bills is all about asking the right questions
WOULD you like to save some money? So let me run you through my money test – answer each of the following questions and it could add hundreds or even thousands of pounds to your pocket.
Has your home got more or the same number of bedrooms than people?
If so, check whether you can make big savings switching to a water meter (free to do, but not in Scotland). This is because water bills depend roughly on your home’s value, while a meter’s all about usage.
This may be serious cash. As one person tweeted me: “Switched a few years back and now pay £45 a month less (that’s £540 a year).
Plus, it makes me more conscious of what I use.
Fixed dripping tap.”
There’s a calculator to see if you can save at ccwater.org.uk
Do you go abroad at least once a year?
If this is the case, there are a number of key things to consider:
a) If you holiday in Europe, check that your European Health Insurance Card (EHIC) is in date, as three million expire this year. Always use the official site, ehic.org.uk. Don’t Google – many sites charge when it should be free.
b) Get permanently perfect exchange rates worldwide. Most credit and debit cards add a hidden three per cent load, so spending £100 worth of euros costs £103. However, a few specialist credit cards are load-free, giving unbeatable rates. Always pay them off in full every month, to avoid interest.
I keep mine in my overseas wallet (yep, I have one) and only use it for spending abroad. Full current best list at mse.me/travelcards.
c) If you go away at least twice a year, get annual travel insurance. You can do comparisons at moneysupermarket.com and confused.com.
If you’re not online, supermarkets tend to give decent coverage.
Alternatively, the fees-free Nationwide Flex- Account (nationwide.co.uk/flexaccount) gives free European cover up to age 73 as part of the account.
Is your mortgage rate higher than your savings rates?
With dismal savings rates, overpaying your mortgage wins for many. First check if your mortgage rate’s higher than your after-tax savings rate. If your mortgage rate is higher than your after-tax savings rate, it pays.
Two big caveats: check there are no overpayment penalties. Plus, always keep a few months’ emergency cash aside.
The impact of overpaying can be enormous – paying an extra £100 a month on a £100,000 mortgage at 4.5 per cent saves £18,000 interest over a 25-year term. There’s an overpayment calculator to work out your numbers at moneysavingexpert.com/OverpayCalc
Are you paying interest on your credit cards?
If so, see if you can do a balance transfer. This is when you get a new card (or cards) that repays the debts on other cards for you, so you owe it instead at a usually far lower rate. You’ll need a decent credit score to do it.
The longest zero per cent deal is Barclaycard 26mths with a 3.5 per cent fee (barclaycard.co.uk/personal/credit-cards). If you can repay quicker, the Halifax card (halifax.co.uk/credit cards) at 15mths at 0 per cent with a one per cent fee. All these cards are representative – meaning some won’t get the headline rate. Full options at mse.me/balancetransfers
The golden rules are:
a) Clear or shift again before the zero per cent ends or you’ll pay the full APR, which can be nearly 20 per cent.
b) Pay at least the monthly minimum or you risk losing special rates.
c) Don’t spend on these cards – it isn’t usually at the cheap rate.
Do you automatically renew your car insurance with the same insurer?
If so, this MoneySaving sin means you’re likely paying way over the odds. Don’t wait, check if you’re overpaying now. Provided that you haven’t claimed, if the savings are big it could even be cheaper to cancel, pay an administration fee and get cover elsewhere.
To get as many quotes as possible in as little time, combine moneysupermarket.com and confused.com, then add the big ones they miss, aviva.co.uk and directline.com. If you have more than one car, try admiral.com/multicar Other key tips are if you get third party because it’s cheaper, try getting comprehensive quotes too as, sometimes it’s cheaper, as selecting it makes insurers think you’re a lower risk. Plus, young drivers consider adding a mature older driver (eg, mum or dad) as a second driver on your insurance, it can bring your premium down –- though it’s trial and error.
Have you planned what would happen to your childrens if you died?
It’s not a pleasant thought, but it can happen.
Consider cheap level-term life insurance so there’s money if needed (help via mse.me/ lifeinsurance). Write a will, especially if you have assets, to make sure those you want to inherit, do. This also enables you to specify your desired guardian for your children.
To do a will on the cheap, you can buy DIY if it’s simple. If not, which.co.uk has a cheapish will writing service.
Have you been with the same bank for more than three years?
Don’t whinge about your bank, ditch it. Right now, fee-free firstdirect.com is offering new switchers £100 and it has won every customer service poll I’ve ever run. You need to pay in £1,000 a month. The full list is at mse.me/bankaccounts
Are you nearing retirement?
An annuity is what most people buy with their pension fund to get a regular income until death, but many make the mistake of just getting it from their pension provider.
A 65-year-old with a £100,000 pot may get about £5,000 a year with the worst payer, but could be £700 more with the best..
The rules for getting an annuityare:
a) Always check what else is out there.
b) Get a medical before buying it, in case you’ve an undiagnosed condition – if you do, while not pleasant to hear, you get a better rate.
c) If not sure, get independent financial advice.
Top tips
Save money on fuel with a £60 grocery spend at Tesco Get a voucher for 10p a litre off fuel when you spend £60 on groceries at Tesco in-store (excluding Express stores) or online until May 26. If you’re spending more than £120 on groceries, split it into two transactions of at least £60 each to get more vouchers.
Vouchers given in-store are valid for two weeks from issue, while online vouchers can be redeemed until June 9.
National Citizen £50 holiday for 16 and 17-year-olds A Government-backed scheme called the National Citizen Service has released thousands of places for 16 and 17-year-olds across England to go on a two-week residential course (exactly how long you’ll be away varies by provider). It includes activities such as canoeing, climbing and hiking, followed by 30 hours of team projects to help their community, which usually takes place in the week after the teenagers get home. The cost is capped at £50 (some may get free places) and includes food, transport and equipment. Full details at ncsyes.co.uk
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