Household finances are tough for many right now - but could you boost your budget and claw back some cash? By Vicky Shaw.
Household budgets are going to be very stretched in the coming months, as the financial impact of coronavirus continues to be felt.
While many people are feeling a significant impact on their finances, there may be some small ways to ease some of the pressure.
Even while you're sitting at home, you may be able to do something to save some cash right now and even get some money back.
Consumer rights expert Martyn James, from complaints help website Resolver.co.uk, has some suggestions...
1. Are you paying for the same service more than once?Many people routinely pay out more than they think - by spending on several services that basically do the same thing.
For example, are you saving your online data to 'the cloud?' Some people might be using a paid-for service they took out with their computer or laptop - and maybe another through their phone provider, or another through anti-virus software.
OK, so you don't want to lose all your photos in a tech failure, but you only really need one cloud storage service. Music streaming services are also often duplicated. If someone is paying for two cloud services and two music streaming services - and they reduce that to one each, the potential saving could be as much as £400 a year.
2. Have you fallen into a subscription trap?
Lurking in your statements, you may discover one-off payments or sneaky monthly subscriptions. You may have signed up to free trials and forgotten to cancel. Or perhaps you tried out a service a while ago but you simply don't use it.
Trawl back a year and one month in your banking, which will allow for every annual payment to be tracked down. If you didn't authorise these payments, weren't told you were going to be debited or you think you've been scammed, contact your bank immediately. You might even find you eventually get some money back.
3. Look for mistakes and mishaps
Managing money online can be very convenient. But when we're not handing over physical cash, this can make us less vigilant about checking spending.
Honest errors on statements may be be missed, whether it's duplicate transactions or payments for services still going out despite having been cancelled.
If you spot anything you don't recognise, ask your bank or card provider to 'charge back' the money. You might have to sign a statement saying you didn't authorise the payment, so you need to be sure.
4. Check you're not paying for more than you need in online bills
Many of us no longer receive paper bills. This could mean we're less likely to scrutinise exactly what we're paying for. Go through what's included. You might not need the full package you're on and could instantly save be reducing it.
Phone bills can contain a range of charges. Flag up anything you haven't authorised with your provider. The Phone-paid Services Authority, the UK regulator for content, goods and services charged to a phone bill, may also be able to help point you in the right direction.
5. Stop paying the price for loyalty
In 2018, the Competitions and Markets Authority found that a range of businesses - from lenders to mobile phone companies, insurance to broadband firms - had been charging loyalty penalties to customers who let policies or services automatically renew each year.
Some people sticking with the same provider for years may have paid thousands of pounds more than they needed to. If you feel you've paid too much for loyalty, you may want to complain to the firm. Turn detective and check online to see what you'd be offered for the same deal you're on as a new customer, take a screenshot and take it up with the business.
6. Cancel insurance policies you no longer need
Perhaps it's a mobile phone insurance policy for a phone you've upgraded years ago that you're still being charged for. Or maybe an expensive gadget insurance policy would be cheaper if you update your home insurance.
And if you're paying for a bank account that comes with certain perks such as insurance, make sure it covers what you expect it to.
Finally, remember to use kindness and courtesy
Making a few savings can really help you make your cash go further. But businesses may be extremely busy currently with many people trying to get through. For non-urgent inquiries, take your time and try to avoid tying up phone lines where possible by going online. Be friendly even if you're frustrated. A bit of kindness goes a long way.
More help with dealing with gripes about firms is available at resolver.co.uk.
WHAT... TO CONSIDER IF YOU ARE RETIRING SOON
Market volatility following the coronavirus pandemic is concerning for many people - not least those looking to retire soon, who may be worried about the impact on their investments.
Jonathan Watts-Lay, director at WEALTH at Work, suggests some people may want to consider using their state pension and other assets for income in the short term, or even delaying their retirement altogether, to give their pension more time to recover.
"Probably the most important investment you could make is to engage with a regulated financial adviser, who can take your personal situation and objectives into account and come up with a sensible plan," says Watts-Lay.
WEALTH at Work, a specialist provider of financial education and guidance in the workplace, has some suggestions for what to consider if you are due to be retiring soon...
1. Resist the urge to cash out in panic. No one knows what is going to happen, but if you cash out now, you will not only be taking money out of your tax efficient pension but you may also lose out when markets recover.
2. Don't pay unnecessary tax. Generally, the first 25% of a defined contribution pension is tax-free and the remaining 75% is taxed as income. By taking your pension as a cash lump sum not only could you be selling when markets are low but you may end up with a big tax bill.
3. Consider delaying retirement or working part-time. It would give some time for markets to hopefully recover and give you more confidence in leaving the workforce.
4. Remember that pensions are not the only source of income. If you want to give your pension some time to recover, you might want to use other savings such as cash Isas first.
5. Shop around before you purchase retirement products. Check fees, make sure the product suits your needs and consider whether you can withdraw cash as and when you want, and for as long as you need.
6. Regulated financial advice can be an investment - as an adviser will put a bespoke plan in place for you.
7. Protect yourself from scams. Check whether the company that you are planning to use is registered with the Financial Conduct Authority (FCA).
POUNDNOTES
Financial fact: Across the UK, the average house price stood at £219,583 in March according to Nationwide Building Society - a new record high in cash terms for its index.
The research was gathered just before the coronavirus pandemic brought market activity to a near-standstill.
CREDIT SCORE PROTECTION FOR BORROWERS AGREEING PAYMENT HOLIDAYS
Borrowers agreeing temporary 'payment holidays' with lenders due to the financial impact of coronavirus will have their credit scores protected, the UK's three major credit reference agencies - Experian, Equifax and TransUnion - have confirmed.
The UK Government recently announced that home owners badly affected by the crisis can ask their mortgage lender for a payment holiday of up to three months.
GROWING PROPORTION OF DEBT CHARITY'S CLIENTS AGED UNDER 40
Two-thirds of adults contacting StepChange Debt Charity for help last year were aged under 40, its figures show. Some 66% were aged 18-39, which has grown from 57% in 2014.
More than six in 10 (62%) people contacting the charity for help were women, while single parents made up a quarter (24%). Overall, the charity contacted by 635,091 people in 2019.
REGULATORS' WARNING TO PENSION SAVERS
Pension savers are being urged not to rush into any decisions which could damage their long-term interests and see them losing cash that they have built up over their working lives.
People should check the firm they are dealing with is authorised and unexpected approaches and too good to be true offers should be rejected.
The warning comes from the Pensions Regulator (TPR) and the Financial Conduct Authority (FCA) and is also being supported by the Money and Pensions Service (MaPS).
They are urging savers to take their time and visit the Pensions Advisory Service website for free pensions guidance before making decisions.
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