Give your finances a spring clean with our top tips on savings, current accounts and mortgages for the new tax year
We reveal the best ways to get your finances in order with our top tips on financial planning
SORTING out our finances is not a task many of us relish.
In fact, financial planning firm Lemonade Money has found it is about as popular as putting out the bins.
But with the new tax year under way, now is a great time to freshen up your finances.
Here’s our guide to giving your finances a spring clean.
Maximise the Personal Savings Allowance (PSA)
You may be thinking about putting cash into a new Individual Savings Account (ISA), but research from
Moneyfacts shows you should consider your Personal Savings Allowance for bigger returns.
Since April 2016, this allowance has enabled basic-rate savers to earn more interest tax-free. The figure now stands at £1,000.
Charlotte Nelson, from Moneyfacts, explains: “ISAs overall have been struggling to keep up with the more desirable returns that standard savings accounts have on offer.”
At present, you can earn 1.15 per cent on an easy-access account with the Yorkshire Building Society and 1.51 per cent on a one-year fixed-rate bond with Paragon Bank.
But there is still a place for cash ISAs. Charlotte adds: “ISAs are beneficial for the long-term tax advantages, especially now the tax-free allowance is rising to £20,000.”
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The best rate on an easy-access ISA is 1.05 per cent with the Coventry Building Society, and 1.13 per cent on a one-year fixed-rate bond with the Bank of Cyprus UK.
Savers may also want to think about the new Lifetime ISA (LISA), designed to help first-time buyers and those saving for retirement.
However, it’s had a sluggish start, with only a handful of providers. If you’re a first-time buyer, you are likely to want to stick to cash.
Move debts to a competitive credit card deal or low-rate loan
If you have built up a balance on your credit card, there’s no need to pay expensive interest on the debt.
Apply for a competitive interest-free balance transfer credit card.
You can now get 43 months at 0 per cent with MBNA, 42 months with Sainsbury’s Bank and 41 months with Halifax, Virgin Money, the AA and the Post Office.
But beware costly balance transfer fees, which can be 3.25 per cent.
Charlotte says: “Once you’ve made a transfer, you must ensure the balance is repaid in full before the introductory deal ends to prevent interest adding to the bill.”
Another option for those looking to manage debts is a personal loan.
Lenders are focusing on larger loans at present, meaning there are some competitive deals available if you want to borrow a larger sum.
Based on a £10,000 loan over five years, top rates include TSB at 2.8 per cent, Sainsbury’s at 2.9 per cent and Clydesdale Bank, Ikano Bank, M&S Bank and Yorkshire Bank all at 3 per cent.
To explore your credit card and loan options without your credit score being affected, Smart Search at shows how likely it is you’ll be accepted.
Current accounts are one of the few places where a saver can earn interest that currently beats the inflation rate of 2.3 per cent
Charlotte Nelson
Switch your current account
There are a host of accounts paying high rates of in-credit interest, while a handful are offering attractive switching incentives.
Charlotte says: “Current accounts are one of the few places where a saver can earn interest that currently beats the inflation rate of 2.3 per cent. However, that interest is limited to smaller amounts.”
Top picks include Nationwide, which is paying a generous 5 per cent on its FlexDirect account, and Tesco Bank, paying 3 per cent.
But you need to check the monthly funding requirements.
Top switching sweeteners include £110 from The Co-operative Bank, £100 from First Direct on its 1st Account, and £75 from the Halifax on its Reward Current Account.
Move to a low-rate fixed-rate mortgage
The average standard variable rate (SVR) — what you revert to after an introductory deal — currently stands at 4.56 per cent, says Moneyfacts.
Charlotte says: “Those who are about to finish a two-year fix may be in for a shock but with mortgage competition high, now is the perfect time to look for a better offer.”
She adds: “Or fixing your mortgage for five years can inflation-proof at least part of your monthly outgoings.”
Switch to a fixed-rate energy tariff
Almost all of the major energy providers have hiked prices in recent weeks, or plan to do so later this month.
For example, Scottish Power introduced a huge rise at the end of March, with standard dual-fuel bills rocketing by around £86 a year.
Act now by joining The Sun’s People Power campaign to take on the Big Six and save hundreds of pounds on your energy bills.
Simply enter your email address and postcode at .
Mr Money Tips
- Take steps to budget properly. Rose St Louis of Zurich UK says: “Sit down and go through your finances. Keep track of bills by getting organised and having a document that lists everything in one place. This will help you spot where you can make simple cutbacks.” If you are unsure how to get started, use online tools.
- Review all your savings accounts to check you are getting competitive rates. Useful comparison sites include and .
- Don’t wait until the end of the month to save. Dominic Baliszewski, of Momentum UK says: “Setting aside a small amount every month after payday will help you spend within your means.”
9Dominic Baliszewski warns to be mindful of insurance traps saying that they hike the prices in the second year to make up for the discounts they offer you to join - Don’t fall into the auto-renewal trap for home, car, travel and pet insurance. Dominic adds: “Insurance companies increase prices in the second year to recoup the cost of first-year discounts.”
- As well as switching insurer, do the same with your broadband, digital TV and mobile supplier.
- Most firms give discounts for paying via direct debit. But check you are not still paying for mag subscriptions and gym memberships you no longer use.
Beware of Motor Monthly Schemes
HARD-PRESSED drivers are being ripped off by up to £250 a year to pay their car insurance in monthly instalments, new figures reveal.
More than half of drivers opt to pay monthly, and some of them are being forced to pay nearly 20 per cent more compared to a one-off yearly premium.
Using prices from various insurers, motor magazine Auto Express found that monthly customers are charged ten per cent more on average for the same cover.
Buyers choosing even the cheapest policies can end up spending £50 more, while those who select pricier premiums – with perks such as breakdown cover and courtesy car options – were found to pay hundreds more over 12 months.
The findings come after the Association of British Insurers (ABI) said motor premiums have reached record high levels, with an average comprehensive policy costing £462.
An ABI spokeswoman said: “Customers paying for their car insurance in monthly instalments are effectively taking out a loan for the cost of the cover and paying it back over 12 months.
“This means they incur interest and generally pay a higher total bill.” These interest rates can be as high as 19.2 per cent for some lenders, such as Endsleigh.
Even the cheapest quote for a 42-year-old owner of a 2016 Ford Focus living in Banbury, Oxon, included high interest fees.
Aviva quoted a 15.9 per cent variable interest rate, with 31.9 per cent APR.
A spokeswoman said its APR charges range from 10.9 per cent to 39.9 per cent.
Matt Oliver, car insurance expert at comparison site GoCompare, advises motorists to consider other ways to pay for insurance, including using a zero-per-cent credit card.