Save more by making the right financial decisions

Moneyextra.com’s latest quarterly review of financial services highlights the savings available just by making the right financial decisions.

The total annual savings available by replacing near-worst with near-best products across a range of financial services is £4,225.46. That’s almost £250 more than the savings available a year ago.

The savings available in personal loans and credit cards have fallen – showing how even the very best rates have moved higher in reaction to the Bank of England’s base rate policy. At the same time potential mortgage savings have held up, with the annualised potential savings now standing at £2,586, although that’s down from figures seen earlier this year before the credit crunch.

Robin Amlôt of Moneyextra.com commented, “Choosing the right mortgage can help keep your wallet healthy and make the difference between running up other debts and remaining solvent. The potential savings on your mortgage account for more than 61 per cent of the total savings to be made.”

The savings available on personal loans (£9,000 over 60 months) have fallen throughout the year in reaction to rising base rates and, at an annualised £269.88, are down from £396.36 a year ago. However, a narrowing of the interest rate spread is also responsible – while rates on the very best loans have risen by more than half a percentage point, rates at the lower end of the scale have actually come down.

Comments Robin Amlôt, “Advertised personal loan interest rates remain competitive but lenders have tightened up their criteria significantly and are rejecting more potential borrowers. There are still good deals to be had but only for those with blemish-free credit history.”

“Shopping around for the right savings products can also pay dividends,” adds Robin Amlôt. With £5,000 in an instant access savings account, the difference between near worst and near best accounts is £290.50 in interest – more than 11 times the £25 being offered at the bottom end of the scale.

Elsewhere, Moneyextra.com’s figures also show that picking the right term assurance policy could save you up to £134.04 a year while the right current account could put an extra £64 back into your pocket and a top cash ISA pay you £62.70 a year more in interest.