Be your own Chancellor and reduce your annual bills by £3,500
Chancellor George Osborne will reveal the changes he’ll be making to the nation’s finances in the Budget on Wednesday, however MoneySuperMarket urges bill payers to take control of their own finances and fight back, regardless of what the Chancellor announces.
Recent research from the comparison website revealed British debt is already spiralling out of control, so any further changes to tax benefits may push them over the edge. Consumers now owe an incredible £196 billion collectively, increasing by a staggering 41 per cent from last year. Two thirds (66 per cent) of UK adults admit they currently have some form of unsecured borrowing, with the average amount on unsecured credit standing at £5,898 each. Consumers need to review their finances and see where they can save to get their budgets back in shape.
Dan Plant, editor in chief at MoneySuperMarket, said: “The Budget is often a damp squib when it comes to you or I increasing our bank balance. Rather than wait for the Chancellor, it is quicker, and more rewarding, to take control of your own bills, savings and spending – it’s possible to save £1,000s, much better than a couple of pence off a pint of beer.
“Anyone with outstanding debts should minimise the interest they are charged, both through gaining control of monthly outgoings so you can focus on bulking up repayments, and by switching to cheaper ‘balance transfer’ credit cards. Slashing the cost of debts can mean you pay them off earlier or make them less of a burden on your wallet. Apathy is rarely rewarded and switching from average deals to the market leader on a range of financial products could save households £3,500 over twelve months.”
How to save over £3,500 a year
Mortgages – Saving £2,250
Someone with a £150,000 mortgage on the market average standard variable rate (SVR) of 4.85 per cent could save themselves £2,250 a year switching to a 2 year fixed rate mortgage from Chesea Building Society at 1.44 per cent.
Savings – interest earned £90
Six years into a historical low base rate means savers are still suffering. With the majority of savings accounts offering a rate or 0.5 per cent or lower, switching to the market leading Coventry Building Society Postsave Easy Access account offering 1.40 per cent, savers will see £90 in extra interest generated on a pot of £10,000.
Credit cards – Saving £480
Those unable to pay off their credit card debt quickly and looking to spread the repayment costs over a period of time should ensure they move their outstanding debt to a zero per cent balance transfer card, to save hundreds of pounds in interest. Moving a credit card balance of £3,200 from the current average rate of 17.88 per cent APR to the market leading Santander 123 credit card offering 0 per cent on balance transfers for 23 months and no balance transfer fee would save £480 over the first 12 months.
Personal loans – Saving £30
A personal loan allows consumers to make fixed repayments over a set period of time, ideal for anyone looking to budget. Many new loans are only available to existing current account customers but, consumers should take the time to shop around to make sure they are getting a good deal for their circumstances. If someone had a loan for £7,500 over five years with an average rate of 4.56 per cent APR, swapped to the market leading Sainsbury’s Bank Personal Loan at 3.7 per cent APR, an annual saving of £30 could be made.
Current accounts – Earn £184
There is also substantial interest to be made for current account holders. For example, someone holding £1,500 in an account with an average high street rate of 0.1 per cent could gain an extra £184 by switching to Halifax’s Reward Account which offers £125 reward for switching and a £5 per month bonus as long as you deposit a minimum of £750 per month into the account.
Car and home insurance – Saving £290
Shopping around for cover is essential, renewing your car insurance and you could save up to £224. Additionally, paying annually for cover instead of monthly could cut the cost of your premium, and for car insurance, by adding a partner, or if you are a younger driver, adding an older driver to your policy could also help cut the cost. Comparing home insurance prices can also offer substantial savings of up to £66.
Utilities – Save £236
Although the New Year brought about price reductions from all the Big 6 energy suppliers, the fall in prices were miniscule in comparison to the huge bill cut possible if you switch energy provider. Switching from average Big 6 standard paying by monthly Direct Debit to the cheapest deal on the market would save up to £236 per year. It is also worth remembering many fixed rate energy tariffs come to an end before the end of May, meaning hundreds of thousands of homeowners need to take action and switch to avoid being stung by huge bill hikes.