Reformed smokers cashing in

Michelle Slade, analyst at Moneyfacts.co.uk, comments: "Figures from the NHS earlier this year revealed that nearly 165,000 people gave up smoking with NHS help in 2007, compared with nearly 129,000 in 2006. The increase in numbers can be partially attributed to the ban on smoking in public in England and Wales, which came into force on 1 June 2007.

"Nearly one year on, these reformed smokers are not only likely to be feeling the health benefits, but could also be feeling the benefits in their pockets.

"The average smoker is predicted to smoke 30 cigarettes per day. Based on a cost of £5.50 per packet for 20 cigarettes, if a smoker kicked their habit, they could save £250 per month.

"This time last year the top paying variable rate regular saver was offering a rate of 7.00%. If they invested £250 per month into this account they would now have accumulated £3,108.

"Anyone looking to start giving up now will find some fantastic rates on offer on regular savings accounts at the moment.

"On top of this most life assurance companies consider customers to be non-smokers if they have not smoked for 12 months. Anyone who gave up when the smoking ban came into force would now fall into this category.

"Due to the increased risks from smoking, most life assurance companies charge smokers over 50% more than they charge non-smokers. Anyone looking to take out life assurance now could make a large saving.

"Anyone with an existing policy may also benefit. Some companies will re-evaluate the original policy and charge the reduced non-smoker rate once the qualifying period has passed. However, some may insist on a new policy. If this is the case, make sure that the increased premium for your higher age does not wipe out any saving you would gain for now being a non-smoker.