National Living Wage
Always make sure when starting a new job, or if you are currently employed, that you are being paid the National Living Wage. The National Living Wage is higher than the National Minimum Wage and is the minimum pay per hour almost all workers are entitled to. The minimum wage you are entitled to depends on your age, and this normally goes up every year in October in line with an average cost of living increases… You can find more information at https://www.gov.uk/national-minimum-wage. To complain if you think you are being paid too little, ring the Government’s Pay and Work Rights Helpline on 0800 917 2368. As of April 2021, the National Living Wage for anyone 23 and over is £8.91, which will rise to £9.50 in 2022.
Maximise your income
Maximising your income is a tried and tested tactic for saving money, and can come in many different forms. One of these methods, for example, is asking your tax office about the ‘rent-a-room’ scheme. This scheme allows you to receive rental income up to £4,250 tax-free (£7500 from 2016). You will usually also need your landlord’s or mortgage lender’s permission to do this, as your tenancy or mortgage agreement may not allow you to rent rooms out.
Another tactic is when shopping, making sure that you find the best deal on every product and not always going for the big brands. By choosing the best deals, you can give yourself a pay bump of thousands of pounds without cutting back on the volume of food, clothes and more that you are purchasing.
Reduce food bills
With food costs rising and many families feeling the squeeze, a good place to start saving money is the weekly food shop. Food waste is a major issue. Each month, the average family throws away almost £60 of food that was bought but not eaten. To avoid buying items that you already have, always ensure that you plan your meals before going to the shop and shop with a list.
There are a number of food apps that you can use to tackle food waste and can connect you with delicious food at heavily reduced prices. Apps like Too Good To Go and Olio tells you when restaurants and shops are selling food for a fraction of their usual cost.
Want surplus food, drink and household items at deeply discounted prices? The Company Shop in Dudley offers products from major retailers for around 50% less than their normal retail price. All the products sold in Company Shop are in date and perfectly good to eat, use or wear, but were obtained from major retailers and manufacturers after being deemed surplus for reasons such as seasonal packaging or overstock. Click here to apply for your free membership.
Bulking out your meals with cheap ingredients like chickpeas and lentils is another great way of saving some money, whilst also adding in some nutrition. Combining this method with meal prepping can help you to have healthy, filling and most importantly, cheap meals throughout the week. For a full list of even more helpful ways to reduce your food bills, check out our list of tips on how to eat well on a budget.
Make saving a habit
The easiest way to get your savings working for you is to set things up so that you automatically add a little bit each month to your savings. That way you won’t have to remember to make the payment and you won’t be tempted to skip a month.
The best time to put a bit of money aside is just after you’ve been paid, so set up your standing order to go out on, or just after pay day. Or ask your workplace if they have a savings scheme – and think about joining it if they do. This makes saving even easier, because the money comes straight out of your pay, just like your tax and National Insurance contributions.
The Money Advice Service can help you to budget monthly to ensure all your priority bills are paid. Also, check out the Street UK beginners guide to a personal budget and download our budgeting spreadsheet template.
- Watch your credit card balances – one of the major factors in determining your credit score is how much revolving credit you have versus how much you’re actually using. The smaller that percentage is, the better it is for your credit rating.
- Reduce your number of accounts – One of the factors your score considers is how many of your cards and credit accounts have balances.
- Find a list of fee-free bank accounts on our Resources page, these accounts will not charge a fee for missed payments.
Applying for a passport or driving licence will help lenders prove who you are.
When it comes to looking for a loan, the top money-saving tip is to only borrow as much as you absolutely need to, and then make sure you pay it back as quickly as you can. Borrowing too much can cause your debts to spiral out of control, so always make sure you are basing your borrowing on what you know you can comfortably afford to repay.
Also, keep your eye on any hidden fees, as these may not feature prominently in the headline quote when you search for credit on comparison sites. It is important to check for any fees, such as late payment, default, or settlement charges, as these can make a huge difference to the total cost of credit.
There are a number of factors to consider when borrowing money. The TOTAL cost is probably the key factor. Although lower payments over a longer period look attractive; paying the loan off quicker will usually mean you pay much less as less interest is applied. Also, remember that loan providers must always allow you to pay your loan off in full, and you can usually overpay or settle your loan early for free.
If you’re shopping for a loan, it pays to do your rate shopping within a short time span. Every time you apply for credit, it can create a small dip in your score that lasts a year. That’s because if someone is making multiple applications for credit, it usually means he or she is more reliant on credit.
Dealing with high levels of debt
Dealing with high levels of debt is a reality that many of us find ourselves in, whether this be mortgage debt, loan debt or something else. The temptation is often to ignore your debt and hope that it goes away, but this isn’t the answer. If you know how to tackle your debt and set realistic goals for paying it off, you will deal with it once and for all.
- Always start by making a list of all your debts, writing them down in order from most serious to least serious. Writing your debts down like this will show you all of the money you owe and will help you plan how you are going to tackle each debt.
- Once you have a clearer picture of how much you owe, you can start drawing up a budget plan. This can help you to work out where your money is going each month, and calculate what you will have left to spend once your major bills have been paid.
- Don’t borrow money to pay off your debts without thinking carefully. Get advice first. If you own your home, this kind of borrowing could lead to you losing your home.
- Make sure you tackle your priority debts first – for example, debts that could mean losing your home or having your gas or electricity cut off.
- If you have lost your job or are off work because of illness, check whether your payments are covered by payment protection insurance. Check your credit agreement. Contact the insurance company or your lender to find out more details about how to claim.
- Make sure that any money you receive (for example, wages or benefits) goes into an account at a bank or building society that you don’t owe any money to (avoid paying it into an account with an overdraft for instance). This means the bank or building society will not be able to take any of your income to pay off your debt.
- Make mortgage arrears a priority. If you fall behind on your mortgage payments or a second mortgage or secured loan, you need to take action straight away to avoid your mortgage lender taking court action to repossess your home. Your lender is likely to offer you more options if you negotiate at an early stage rather than waiting until mortgage arrears become unmanageable. Mortgage problems can often be resolved without needing to go to court.
- Check out our blog about debt solutions and find out what is the best solution for you.
Pay your highest interest debts before saving
Clearing off high-interest loans and credit cards will reduce the total you have to pay back. Once these have been paid off, your disposable income will be higher letting you save in future. It is important to make sure you don’t break the terms of any of your agreements. So even if you’re focusing on paying down another debt, you must pay at least the minimum on any credit cards and your monthly required payments on any loan agreements.
Personal tax allowance
Everyone is entitled to a personal tax allowance (or tax-free amount), but there are all sorts of tax allowances and tax reliefs available. These depend on your age and personal circumstances. You can check your entitlement to tax allowances and reliefs at www.gov.uk and www.litrg.org.uk. If you are still in doubt, contact your tax office on 0845 300 0627.
The Personal allowance is £12,570.
Your Council Tax banding may be incorrect. Dropping a band may save you up to £200 per year, plus a backdated refund. Council Tax Bands
A vital thing to remember when thinking about benefits is that they are not just for unemployed people, and even someone earning a high salary could be eligible for some help. Up to seven-and-a-half million households are missing out on £15 billion a year of means-tested benefits, the latest figures from the Government show. Find out what benefits & entitlements you may be eligible for by using our: Benefits Calculator.
Discount leisure pass
If you are claiming any sort of benefit, you may be eligible for a Discount Leisure Pass. This gives you and your children reduced entry to all Council-owned leisure and sports facilities in your area.
Local welfare provision scheme
If you have no income or there is an emergency or disaster, you can apply for help from your local council’s assistance scheme. Local Welfare Provision is a limited fund of money that aims to meet the short term emergency or immediate support needs of vulnerable people in that district. It is there to assist vulnerable people to establish or maintaining a home in the community. You do not have to be on benefits to apply but you can only get help with certain items. To find your local provider search here.
Check with your local council to see if you can have a home improvement or a disabled facilities grant. This will depend on your income, whether you have a disability and what repairs need doing in your home.
The Social Fund is a Government scheme to help people with expenses that are difficult to meet on a low income. These Social Fund benefits include things like budgeting loans, cold weather payments, funeral payments and winter fuel payments. The Social Fund also provides maternity grants and funeral expenses payments for people on qualifying benefits, www.gov.uk for further information or contact your local Job Centre.
If you are on Income Support, income-based Jobseeker’s Allowance, income-related Employment and Support Allowance or Pension Credit or Universal Credit you may qualify for a short-term advance, a budgeting loan or a budgeting advance from the DWP, see www.gov.uk for further information or contact your local jobcentre.
Gas and electric bills
Despite the continuing cost of rising household bills across the UK, cutting costs is easier than you think. And the average household can save hundreds of pounds each year. There are a lot of energy suppliers out there competing for customers, so it is as good a time as any to get out there and find yourself the cheapest deal possible.
Always ensure that you turn electrical appliances off when not in use. In 2012, the Energy Saving Trust revealed that across the UK, households were spending between £50 and £86 per year on gadgets in a “non-active” or standby state, equivalent to 9pc to 16pc of the average electricity bill.
You may be able to get a grant through the Energy Company Obligation (ECO) programme for insulation and heating improvements, plus advice about saving energy. You may also be able to get a loan through the Green Deal scheme. Ring the Energy Saving Advice Service on 0300 123 1234 or see www.energysavingtrust.org.uk.
The average yearly water bill is close to £400, according to Water UK. And although you can’t switch water suppliers, there are ways to save money on bills. If you have a water meter and are receiving benefits you may be eligible to have your bills capped under the WaterSure scheme. Contact your water company for further details.
Water meters only charge you for the water you actually use and this could make your bills cheaper. You can also take fewer baths and switch to showers, and switching to a more efficient showerhead to compound these savings even further. Ask your water company for advice or use the water-meter calculator at www.ccwater.org.uk.
Mobile phone bills
If you discover that you are not using your full call and text allowance and have been with a network for more than three months, some providers will let you downgrade to a lower monthly tariff.
You can also reduce your home phone and broadband bill by calling your supplier and asking for a better price or by using a price comparison website to find a cheaper deal. Did you know you can also match your contract to your lifestyle? For example, if you know that you use a lot of data and are regularly charged extra when you go over your limit, a deal with more data in it might end up being cheaper in the long run.
Don’t pay for TV channels you don’t use. Speak to your provider to see if they can reduce your monthly bill by changing your package. By bundling your phone, internet and TV with one provider you can save up to 20%.
Some people are now opting not to get a TV package at all, but are instead paying for streaming services like Netflix, NowTV, Prime Video or Disney Plus.
You may be able to save some money by switching to another supplier. This may work out cheaper, particularly if you have both gas and electricity from the same supplier. There are a number of independent internet price comparison sites that can help you find the best deal. Make sure you use an authorised company for this service.
Utility trust funds
Some fuel and water companies have set up trust funds that may be able to help you pay your fuel bills if you are in financial difficulties. Ask your fuel company if they run a scheme.
Why your credit rating’s important
Your credit rating is used to help lenders decide whether to lend you money, how much to let you borrow and, in some cases, how much interest to charge you.
Always pay bills on time
One of the biggest ingredients in a good credit score is simply paying your bills on time, month after month. Credit scores are determined by what’s in your credit report. If you struggle to pay your bills on time it damages your credit and hurts your score.
Factors Affecting Your Credit Rating
- You can boost your credit score by being on the electoral register. This is used by lenders to verify that you are who you say you are
- Moving home a lot. Lenders feel more comfortable if they see evidence that you have resided at one address for some time
- If you receive a county court judgment (CCJ) (called a decree in Scotland) for an unpaid bill this will have a serious impact on your credit score. CCJs stay on your file for six years
- Missing or making late payments on anything from your mortgage, credit card, personal loan, gas or electricity bills will stay on your credit file for six years
- High levels of existing debt – banks and credit card companies may be nervous about lending you more as this could indicate that you are financially overstretched
- Applying for lots of credit at once. When you apply for credit it will show as a record on your credit report so it’s better to stagger applications. If you do not intend to actually apply for credit and simply want to compare rates, find out whether the lender can register a ‘quotation search’ on your credit report instead of a ‘credit application search’. Lenders know that quotation searches do not represent actual credit applications, so they won’t have a negative impact on your credit rating in the future
- Mistakes on your credit report, which lenders check as part of the credit score process. If there is something on your credit report which is incorrect or that does not apply to you – i.e. someone may have fraudulently applied for credit in your name without you knowing – contact the credit reference agency immediately to have this investigated and removed
- Being tied into any joint form of credit such as bank accounts, loans or mortgages with someone who a poor credit history, known as ‘financial association’, as this will affect your ability to gain credit.
Healthy Start Scheme
If you are pregnant or have a child under four and you are on certain benefits, or you are pregnant and under 18, you may qualify for help with milk, fruit, vegetables and vitamins under the Healthy Start scheme. Contact the Healthy Start Issuing Unit on 0845 607 6823 or see www.healthystart.nhs.uk to find out if you will qualify for this scheme.
All 3 to 4-year-olds in England can get 570 free hours per year. It’s usually taken as 15 hours a week for 38 weeks of the year, but you can choose to take fewer hours over more weeks. Click here to find out more
Summer holidays and days out
- The LEGO Life Magazine is completely free. Arriving four times a year, it is packed with super-fun Lego activities, Lego character comics, amazing Lego posters and kids’ cool creations – perfect for any young engineer. It really is a great freebie.
- Teens in England aged 16 and 17 can apply to the National Citizen Service for a two or three-week course, including activities such as canoeing, climbing and hiking followed by a team project in the community. It’s either free or capped at £50 with all meals included. How: Enter details on the National Citizen Service page (parents, get your child to apply) and to find out about your nearest scheme. You must be 16 or 17 at the time of the trip. It’s a Government initiative and bursaries are available as providers aren’t allowed to turn away kids for financial reasons
- Visit the park – If the sun’s out, why not go to the park? Here’s a handy page where you can search for award-winning parks near you – and they are free! See Green Flag awards to find your nearest park.
- Some schools, community centres and youth groups offer clubs for children during the school holidays, with activities as diverse as motor quads and archery. Kids aren’t restricted to their own schools – ask local councils for details. Sometimes they’re free, sometimes not. If they’re not though, holiday clubs are often eligible for discounts with childcare tax credits or childcare vouchers.
- Use discount websites to save on days out. Sites like; groupon.co.uk, vouchercodes.co.uk and wowcher.co.uk offer daily deals and discounts on events, activities, travel and restaurants, to name a few.
Plan ahead and shop around
Buying holiday items on an impulse will mean you miss out on the best deals. Look out for special offers on sun cream and toiletries, or cheaper travel money, insurance and car hire. You could save hundreds of pounds in total.
Set a budget before you go
This will stop the cost of your holiday spiralling out of control by avoiding the ‘extras’ you hadn’t planned for. List all the things you will need to buy, including travel insurance, travel money, car hire, holiday clothes and swimwear, sun cream and toiletries. And estimate the amount you will spend each day on food, travel, entertainment and holiday treats.
Good holiday deals
- For the best savings, book late– you may not get exactly what you want but you are likely to get a cheap holiday. If you want a particular destination, book early – prices will go up for in-demand destinations
- Haggle with high street operators – you might even get them to offer you something cheaper than an online deal
- Search online, websites like Holiday Pirates and SkyScanner are great tools to find cheap packages and flights.
- As with anything else, with travel insurance, it pays to shop around. Don’t buy direct from a travel agent or travel website, unless you’re sure it’s the best deal. (It almost certainly won’t be.)
- The exchange rates and the fees you’ll pay for buying your currency will vary between different providers. Get the best deal on your money by shopping around for the best rate
- Buy it in advance – the bureaux de change at the airport and ferry ports are more expensive than high street and online providers
- Shop around for the best deal – use price comparison websites to find the best deal. They can show you how much you’ll get for your money once the exchange rate and any charges have been taken into account
- Pay for your money using your debit card – buying travel money is classed as a cash withdrawal, so if you buy on your credit card you’ll pay interest – and maybe a fee as well – even if you pay off your card in full each month.
If you‘re struggling to meet your car finance payments or simply want to cut costs, you can pay off the agreement early or return the car. But there are some conditions and costs attached to doing this, so don’t make a decision until you know exactly what they are.
- Buying the cheapest petrol and diesel is the easiest way to cut your fuel costs, but there are other things you can do to get the most mileage out of your tank. Take a look at this handy article: https://www.moneyadviceservice.org.uk/en/articles/how-to-save-fuel-when-driving
- Riding around with underinflated tyres can increase petrol consumption, check your tyre pressure monthly.
- Buy your presents throughout the year, look out for sales and specials. If you’re feeling creative, try making presents
- Write a list of the people to whom you wish to give Christmas presents. It is fine to restrict this list to very close friends and family. Don’t feel pressured to give gifts to everyone you know
- Write down the maximum amount that you plan to spend on each person’s gift and calculate the total amount. If you are shocked by this total, go back and reduce some or all of the amounts until you reach a total you are happy with.
- The January sales start earlier and earlier each year and it’s a great time to pick up a bargain for next Christmas. It’s often hard to predict what gifts to buy but you might be able to pick up generic items, like Christmas cards, wrapping paper and decorations.
- Have a dry January. If according to figures released last year from the Office for National Statistics, you are an average British household that spends £15.20 a week on alcohol, by not drinking for the entire month of January, you could save over £60.