Some households will experience ballooning bills with a number of costs, including some utility bills, increasing this month.
Minimum workplace pension contributions under automatic enrolment have also increased with the start of the new tax year.
According to Hargreaves Lansdown, this means the average employee will see an extra £30 leave the monthly pay packet – although in the longer term, this will help workers build up a bigger pot of cash for their retirement.
But there are also some changes that may cushion the blow. Firstly, it’s a time of year when many people receive pay rises (lucky you, if that’s the case!). The amount of income people can earn annually tax-free also increases this month, with the personal tax allowance increasing from £11,850 to £12,500.
While switching providers may be one way to save money on bills, there are other ways to spring clean your finances. Here are some tips from Rachel Springall of Moneyfacts
Dissect your finances
Get under the bonnet of your household income and outgoings.
Breaking down where you’re overspending and looking at what you can rein in on could make a world of difference.
Starting a simple spreadsheet and keeping tabs on household bills and upcoming expenses, like holidays and birthdays, can help prevent the risk of being caught short of cash.
Make the most of budgeting apps
Free apps can be useful to establish up-to-date balances on current accounts, credit cards and savings from many different brands. Customers can assign their outgoings to categories and easily see where most of their cash is going each month. It’s also possible to scan your loyalty cards to use on your phone via an app, so you don’t need to rummage through your wallet.
Cut down on non-essential spending
A recent study from Barclays revealed the average Millennial spends more than £3,300 annually on takeaways, eating out, daily treats such as coffees, socialising and clothes.
Saving some of this cash could contribute towards holidays or the cost of Christmas.
Make saving automatic
People don’t always have the time to make frequent deposits into their savings accounts – but there are ways to do this automatically. This can be resolved using a simple free app like Chip (getchip.uk), which connects to a current account and makes automatic deposits based on a user’s spending.
Lloyds customers can also register for a service called Save The Change which rounds up current account spending to the nearest pound and transfers the difference into a nominated Lloyds savings account.
Move credit card debts
Moving debts to a 0% balance transfer card will help you avoid paying out on unnecessary interest and can help when setting out a plan to get out of debt. Bear in mind fees for transferring the balance, although there are even balance transfer cards around that are fee-free.
Take advantage of re-mortgage deals
Borrowers who are debating whether to refinance would do well to consider some of the latest deals to hit the market, as they could shave hundreds of pounds off their monthly repayments.
Indeed, based on a £200,000 mortgage over a 25-year term on a repayment basis, the monthly repayment on the average two-year fixed rate of 2.49% would cost £896.23 – potentially £260.17 cheaper than if they were sitting on their mortgage lender’s standard variable rate (SVR). Borrowers often end up on an SVR when an initial deal comes to an end. Someone on an average 4.89% SVR rate with a £200,000 mortgage could end up paying £1,156.40 per month.
Enjoy the convenience of having The Sunday Post delivered as a digital ePaper straight to your smartphone, tablet or computer.
Subscribe for only £5.49 a month and enjoy all the benefits of the printed paper as a digital replica.
Subscribe