Yes, Christmas is the most wonderful time of the year but for most it’s also the most expensive time, with parties, presents and bills all to be paid for, seeing the hold we had on our purse strings loosen very quickly.
To ensure you get the most from your money before the festivities kick in, we asked some of the UK’s biggest financial experts to give their top tips to help us prepare for the season.
Tip 1 – Insurance prices have changed
In December 2012 the EU ruled that insurers could not price their products using a customer’s gender. This means that Life Insurance went up in price for women, but down in price for men. At the same time, the reverse happened for income protection products (which pay out if you’re too ill to work).
So the top tip is for people whose insurance policies are more than two years old this Christmas, is to look again at the premiums you pay because you may be able to get it cheaper since the EU changes were made. Of course, just because something is cheaper it doesn’t mean it’s the right policy. Consumers should speak to a financial adviser if they’re in doubt. – Emma Thomson, www.lifesearch.co.uk
Tip 2 – Use as much as possible of your tax-free allowance each year
From July 1, 2014 the amount you can invest tax-free, increased to £15,000 a year. You pay no personal income tax or capital gains tax on any growth in a cash of stocks and shares ISA.
Any dividends you receive are paid net, with a 10% tax credit and there is no further tax liability. Over several years this adds up to a significant amount of tax you will, in effect, be earning back. – Matthew Morris, Carr Consulting & Communications
Tip 3 – Don’t ignore ‘free’ money you can receive from a pension
If you have a contributory pension, make sure you contribute the maximum needed to get your company to contribute too – it’s ‘free’ money. The government will rebate tax on your contributions, so £300 a month gross invested in a pension could lead to £600 invested if your company matches it.
What’s even better is that for a basic rate tax payer the £300 investment would only cost you £240 and for a 40% taxpayer this would be even less at £180 – Lisa Conway-Hughes, Westminster Wealth Management
Tip 4 – Be aware of the best interest rates for your savings
Savings rates are regularly on the move, from new rates for new savers to changes to existing savings rates, so it’s vital to keep a close eye on the interest rates you’re earning and switch when the account is no longer competitive.
There are free services that will keep you fully informed of the rates you’re earning, alert you when the rates change and suggest where you could switch to, from the whole UK savings market, in order to improve the interest you are earning – Sue Hannums, www.savingschampion.co.uk
Tip 5 – Reassess your mortgage
Now really is the time to get a robust mortgage strategy. If interest rates are on the up you need to protect yourself and seek independent advice. The best bit is that a good mortgage broker will do all the paperwork for you and will liaise with the bank on your behalf so you can sit back and relax in the Christmas cheer. – Lisa Conway-Hughes, Westminster Wealth Management
With some excellent tips, we hope that this year’s wallets are just a little fuller and who knows…we may be able to get that extra pack of mince pies…like we need them!
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