Many of us will be looking to shed a few pounds from our waistlines after over-indulging this Christmas, but our wallets are usually the one place where we’re happy to feel the bulge.
Here, we look at seven ways you can pile on the pounds (financially speaking) this New Year…
1. Review your mortgage
If you’re a homeowner, your mortgage is probably your biggest monthly cost. If you’re paying your lender’s standard variable rate (SVR), the chances are you might be able to boost your bank balance by remortgaging.
For example, according to financial website Moneyfacts.co.uk, the average SVR is currently 8.18% while the Bank of England base rate is 5.25% and the best two-year fixed mortgage deals are around 4.94% (although you’ll need a large chunk of equity to secure this rate).
That means that someone with a £150,000 repayment mortgage with 15 years left to run who is borrowing 60% of their property value would be paying £1,449 a month if they were on the typical SVR of 8.18%. Their monthly payments would fall to £1,182 a month if they remortgaged to a best buy two-year fixed mortgage rate of 4.94% – a saving of £267 a month or £3,204 a year.
Remember that there may be legal and valuation costs, but many remortgage deals now include these as part of the deal.
Speaking to an experienced mortgage advisor can help you to understand your options and get a great deal on your mortgage. If you’re looking for somewhere to start, you can speak to a Rest Less Mortgages advisor and get high quality advice on residential, retirement interest-only, equity release and buy-to-let mortgages.
2. Claim what you’re entitled to
Billions of pounds of means-tested benefits and tax credits goes unclaimed each year, so it makes sense to check whether you’re getting everything you’re entitled to.
For example, according to analysis from charity Turn2us, as many as one in four over 65s who are entitled to Pension Credit do not claim it, whilst carers across the country are missing out on £1.15 billion in unclaimed Carer’s Allowance. Turn2us can assess your eligibility for benefits through its Turn2us benefits calculator or by phone on 0808 802 2000. Alternatively, you can get help from Citizens Advice. You can search for your local Citizens Advice here. Learn more about Pension Credit and how to claim it in our guide Pension Credit explained. Our article Five free sources of help if you’re making a benefits claim explains where else you might be able to find support if you’re claiming benefits for the first time.
3. Review your phone, TV and broadband package
When was the last time you changed your home phone, TV and broadband providers? Lots of us switch to new providers when we move home, and then stick with the same suppliers year after year even when our introductory deals have finished.
This can really cost you, so if you want to put some pounds back in your pocket in 2023, check how much you’re currently paying and see if you can save by moving to a different provider. According to uSwitch, households are paying an average of £90 more per year compared to the cheapest deals by paying ‘out of contract’ costs.
Bundling your TV, phone and broadband together so you get them from a single supplier can help you save money and make it easy to keep on top of how much you’re spending. Always check to see what your current supplier can offer you first though – if you let them know you’re planning to move they might offer you a much better deal simply to stay.
You can compare broadband deals quickly and easily using this free broadband comparison service. All you need to do is enter your postcode, and your current provider and the service will come up with the deals available to you. You can narrow down your options by specifying your budget, the speed you’re looking for, how much data you need, and how long you want your contract to be. You can find out more about switching broadband providers in our guide How to find the best broadband deal.
4. Earn more interest on your savings
There’s no escaping the fact that interest rates are low, which in turn makes it tricky to earn decent returns on your savings.
But it’s still worth hunting down the best rates, even if you don’t have a big savings pot, particularly with the inflation rate at 4.6% in the 12 months to October.
Rachel Springall, finance expert at Moneyfacts.co.uk, said: “Inflation continues to take its toll on savers’ cash and may well do so for months to come. It’s vital for savers to keep a close eye on the changing market and switch quickly to take advantage of a top rate.”
Metro Bank is paying the top rate of 5.22% on its Instant Access Savings (Limited Edition). The top one-year bond from Metro Bank is paying 5.80%, compared to a rate of 5.71% on a One Year Fixed Rate Cash ISA from Metro Bank. If you are able to tie up your money for five years, you can get a rate of 5.00% on a Fixed Term Five Year from JN Bank (figures correct at time of writing: 4.12.23).
If you’re trying to build a savings pot for any emergency expenses, regular savings accounts can be a great place to start the savings habit, as they often pay the highest returns. The very best rates currently require you to have a current account with the same provider to qualify.
5. Reduce interest on your debts
If your plastic has taken a pummeling this Christmas, make sure you don’t pay more interest than you need to on what you’ve borrowed.
The best way to save money on high interest charges is to transfer your credit card balance to a new card with a lengthy interest-free period. Although there will typically be a balance transfer fee to pay, which is a percentage of the amount you’re transferring, the savings you’ll make in interest will usually far outweigh this cost.
According to financial website Moneyfacts.co.uk, transferring £3,000 from a card which charges you a typical interest rate of 21.9% APR to a 0% balance transfer card with an interest-free period of 31 months and repaying £100 a month so the debt is repaid within the interest-free period, would save £1,190 in total in repayments, before paying a £59.70 as a transfer fee (1.99%).
If you do take advantage of a lengthy interest-free period, always leave yourself a calendar reminder with plenty of time to spare, so you can switch again before the interest rates jump up.
6. Don’t auto-renew insurance
Consumers renewing their motor or home insurance policy cannot be charged more than new customers since rule changes introduced by watchdog the Financial Conduct Authority (FCA) came into force on January 1, 2022.
Previously, renewal quotes for existing customers may be significantly higher than prices offered to new customers, who are frequently offered the best deals. The rule change has brought premiums into line, and are aimed at making things fairer for consumers.
However, it remains important to shop around for the cheapest policy for your needs, as there could still be significant savings.
Make a note of when your existing insurance policy is up for renewal, and take some time to shop around for a new deal in the weeks before it expires. Compare renewal quotes with the best deals, and it may be worth speaking to your current insurer to see if they can reduce the cost of their policy to compete with the cheapest on the market for your circumstances.
It’s a similar story with other types of insurance such as home and pet cover, so if any of your policies are soon up for renewal, always compare quotes from several other providers first to see if you can find a better deal.
If your insurance renewal is coming up soon, you can compare car insurance quotes or home insurance quotes today, or if your insurance isn’t up for renewal just yet, let us know your renewal month here and we can send you a reminder nearer the time.
7. Have a clear out
If you’ve got lots of stuff cluttering up your home that you no longer need or use, you might be able to give your income a quick boost by selling them. There are lots of online marketplaces and apps where you can sell unwanted items, or if you’d rather, you can hire a pitch at your local car boot sale and sell your things there.
For example, if you want to sell some clothes, the Vinted app can be downloaded for free and once you have it, you simply take photos of your item, upload it with a description, and set your price. When it sells, your buyer will also cover the shipping costs. Find out more in our guide How to make money from your clutter.
Rest Less Money is on Instagram! Check out our account and give us a follow @rest_less_uk_money for all the latest Money News, updated daily.