Hints and tips

Selling and buying a home

If you are selling your home to move to a new one, you may be able to transfer your existing mortgage to the new property, referred to as ‘porting’. This may mean you are able to keep your existing mortgage rate and avoid paying a penalty charge for ending your existing mortgage early. Not all lenders allow mortgages to be ported and will carry out affordability checks when doing this.

Household Utilities

Gas and electric can be a significant part of your expenditure, particularly during the winter months. The best deal for you is likely to be influenced by how much energy you use and when you use it. Online comparison sites can help you search for the best deal.

Overpaying your mortgage

Many mortgage lenders allow you to make limited overpayments to your mortgage each month. By reducing the size of the debt through overpayment, you will reduce the amount of interest that is accrued. This could not only reduce the overall cost of the mortgage but may mean you become mortgage free sooner.

Make sure you check the overpayment terms for your mortgage and how much you can pay before a penalty charge is applied.

Interest only mortgages

Whilst there are few interest only mortgages offered by lenders now, there are many people who have interest only mortgages taken out in the past. If this applies to you, make sure you have a savings vehicle (such as an ISA) that will enable you to clear the debt when the mortgage comes to an end. If you have insufficient funds to clear you mortgage when it ends, you may have to sell your home to clear the debt.

Building insurance

Your mortgage lender will require that you take out buildings insurance, however you can shop around for the best cover. Visit the online comparison sites and remember to search for new deals when the policy renews.

Contents insurance

Whether you own your home or are renting, it is a good idea to make sure you have sufficient contents insurance. Keep in mind that high value items, such as expensive jewellery may not automatically be covered. Ask your insurer for the details on this if this could apply to you.

Renting

If you are renting a property it is likely you will have been asked to pay a deposit. This deposit is covered by a government backed tenancy deposit scheme. To find out more about the protection this provides click here to visit gov.uk.

Keeping cash in your day-to-day current account

Current accounts quite commonly pay the lowest rate of interest amongst other types of bank or building society accounts. An account paying a low level of interest is unlikely to keep pace with inflation, meaning your money will lose its buying power over time.

Easy access too easy?

Are you using an easy access account for your savings goal? Do you find yourself dipping into it? Having a savings target and plan will help you be aware of the impact on your goal when dipping into your savings. You may also want to consider swapping to an account that isn’t so easy to access your cash.

Scams

If you are contacted with a deal that sounds too good to be true, then it probably isn’t true. Check the firm is registered with the FCA at https://register.fca.org.uk and get more help on spotting scams at www.fca.org.uk/scamsmart

Christmas clubs, retail savings schemes and pre-paid cards

These plans can help you save for specific goals. It is important to understand the terms and conditions of these plans including what happens to your savings if the company goes bust as you may risk losing some or all of your savings.

Locking your money away

Your bank or building society may offer you a better rate of interest for restricting access to your savings. Be sure to check the annual equivalent rate (AER) and small print to ensure you are happy with any penalties or charges you may incur should you wish to access your money early.

Savings warnings

Be mindful of the small print when taking out any savings or investment products, if the words ‘guaranteed’, ‘safe’ or ‘secure’ are used, find out exactly what they mean. Guarantees may only be paid if your plan meets the terms and conditions.

Lost pensions

It’s important to keep track of all of your pensions. Always keep your paper work safe and update your provider if you change address. You can trace lost pensions, the best place to start is the gov.uk website. For more information, visit Money Helper. You can also contact the government Pension Tracing service on 0800 731 0193 or visit www.gov.uk/find-pension-contact-details.

Shop around

Like bank accounts and savings, there are many different pension providers available. These providers are likely to offer pensions with different charges, investment choices and flexibilities, all of which could impact your pension savings.

Cost of delay

Have you joined the London Stock Exchange Group Pension Plan (LSEGPP)? The sooner you start saving for retirement, the more chance you will have to achieve the retirement income you want. Don’t miss out on years of potential investment growth and employer contributions.

Minimum contributions

You may already be a member of the LSEGPP but are you paying enough in? To understand how to make the most of your pensions visit Money Helper. Use their pension calculator to see if your current contributions are likely to give you the retirement income you need.

Scams

As with savings & investments, you need to be aware of pension scammers. Uninvited telephone calls, selling pension products or offering to review your pensions are now illegal in the UK, but you still need to be vigilant. Learn how to avoid a pension scam by visiting Money Helper.

Income tax

Think about how much income tax you will pay when taking money out of your pension savings. If you take out a big lump sum it could take you into a higher tax bracket, leaving you with less money. You may wish to take smaller lump sums over several tax years keeping you in a lower tax bracket.

Don’t neglect your pension

Keep track of how much you have and how your investments are performing by using your pension online access or by contacting your pension provider. Review your pension savings at least once a year, especially as you approach retirement.

Tax codes

Your tax code determines the amount you can earn tax-free each tax year, referred to as the Personal Allowance. The tax code for most people in the current tax year is 1257L which indicates they are receiving the full £12,570 Personal Allowance.
Your tax code is shown on your payslip and may be different. To find out more click here to visit gov.uk.

P60

Your employer will provide you with a P60 each tax year. This will tell you how much tax you have paid on your salary during the tax year. It is important that you check that it is right and also keep it safe for future reference. HMRC may ask to see a copy of your P60 if there is a query about the amount of tax you have paid.

Marriage Allowance

This can save a couple up to £250 in a tax year by making use of your partner’s unused personal allowance. A couple must include 1 person who is a non-tax payer, and another who is a basic rate tax payer to qualify. For more information click here to visit gov.uk.

Tax rebate

If you believe you have paid too much tax, you may be owed a tax refund (rebate). Typical reasons for this applying can be if you were to end paid employment part way through a tax year, possibly to retire or work abroad. You can submit a claim by by clicking here to visit gov.uk.

Tax-free childcare

If you are paying for approved childcare, you may be able to save up to £2,000 each year by registering for tax-free childcare. For every £8 you pay into the Tax-Free Childcare account, the government will contribute £2. The maximum contribution from the government is received by paying in £8,000 which will result in a £2,000 government contribution.

Find out more by clicking here to visit gov.uk.

Don’t insure items twice

Some insurances cover other circumstances as well as their main purpose. Home contents insurance can sometimes cover personal possessions (e.g. cameras or mobile phones) outside of the home too. So taking a second policy to cover such items would mean you were over insured.

Don’t over insure your life

Remember that should you die whilst working for LSEG you would get a death in service payment. If you take out life insurance to clear a debt, like a mortgage, think about how much cover you might need after taking the LSEG benefit into account.

Don’t delay your claim

If you need to make an insurance claim, make sure you read the terms and conditions and how you can claim first. Some policies require you to report any loss or theft to the police or make a claim within a certain time limit. If you don’t meet these conditions, then your claim may be rejected.

Keep evidence

You may be asked to provide evidence to support your claim such as receipts, travel tickets or photos. You may be asked for a crime reference number to support loss or theft of an item. Failure to provide this evidence could mean your claim is rejected.

The top result isn’t always the best

Be aware that some companies pay to be at the top of your search results, so look at the policy features and benefits to ensure that the policy meets your needs. You may want to use more than one comparison site as different sites will often have different offers.

Don’t automatically renew

Some insurance companies keep your payment details and may assume you wish to buy your annual insurance again and will charge you. Ask for a better price and shop around for new quotes. The auto-renew price is often the most expensive. Make sure you cancel the policy if you take another.