Simon Read: Don't let changing charges make you miss good deals

 

Charges have been dominating the news this week. Complaints about soaring car insurance costs have been mixed with cheers as home energy prices begin to slacken off a little.

With many families soon to be forced to cut back as the January bills arrive, the focus on charges will strengthen. But people shouldn't wait for a financial jolt to wake them up to the absolute essential need to plan and budget.

Let me tell you about the latest financial figures from the money education charity Credit Action. They don't make for pretty reading. For starters, they report that right now 1,764 people are being made redundant every day.

On top of that, 331 people are declared insolvent or bankrupt, and 101 properties are repossessed.

That's every day. Ending up with that scale of financial misery can't always be avoided, but I'm pretty certain that more planning could have saved some folk from money heartbreak.

As part of that, I'm always astounded by people who tell me that they haven't checked their energy deals or insurance costs lately. Renewing car cover with your existing insurance company, for instance, is almost certainly going to end up with you paying more than you need to.

A typical trick that some insurers resort to, for instance, is to just add around 10 per cent to last year's premium charge. An extra £40 on a £400 policy may not seem much and, if you expect costs to rise, then it's easy to simply accept it.

But that's playing into insurers' hands. If you do the same year after year, you could be quickly paying twice as much as you need to for policies, whether they're for your car, home, pets or even to cover you on holiday.

For that reason it's basic common sense to challenge the renewal price offered by your insurer. Calling a couple of rivals will quickly give you an idea of the current market cost of the cover and arm you with enough information to go back to your original company and ask if they can meet the lower price.

If they say no, go back to one of the other firms for a better deal.

The same is true of gas and electricity costs. The market has become ultra-competitive – witnessed by this week's price cuts, when as soon as one firm moved, the others followed almost immediately.

But if you haven't switched suppliers or deals recently, it's almost certain that you're paying more than you need to. Any one of the many energy cost comparison sites you can find online will be able to give you an idea of how much you should be paying for your gas and electricity, according to your usage.

The same is true of your basic savings and loans. If you haven't changed your mortgage deal in recent years, you could well end up saving thousands by seeking out a lower interest rate.

If you are successful in doing so, then continuing to pay the same amount on your mortgage as you do now while being charged a lower interest rate will have the pleasing effect of reducing the outstanding amount and, subsequently, cutting the length of the loan.

The quicker you pay off a mortgage the less interest you'll be charged, which, depending on the size of your loan, could mean being tens of thousands better off. Really!

Savings accounts, too, need looking at. There are still millions of people with cash in accounts which pay virtually zero interest. These are the deals which, once upon a time, offered market-leading rates but, once they had tempted you to deposit your cash, cut the rates paid to a desultory rate.

Check how much interest you're getting. It could quite easily be as desultory as 0.1 per cent, even if you have tens of thousands on deposit. Even though savings interest rates have not been great in the last few years, you could still get around 3 per cent return on your cash.

And while you're at it, why not check over your other personal finances? Got a 0 per cent credit card, for instance? Make sure you're paying it off quickly enough to avoid charges of 17-18 per cent when it reverts to its standard rate.

Or if you have a large outstanding amount on plastic, think about switching to a a 0 per cent deal. There are some offering no interest charges for up to two years, which could give you time enough to plan to clear the debt. (However, it's essential to check the transfer fee, which, at up to 3 per cent, could quickly eat into any savings you hope to make.)

Finally, why not run the rule over your investments and pensions? Even if you've carefully built up a portfolio of shares and property which you hope will see you into old age, it's important to run a regular spot check on them to ensure they doing OK. If not, you can take appropriate action. Good luck!

s.read@independent.co.uk

Independent Partners; request a free guide on NISAs from Hargreaves Lansdown

News
people Emma Watson addresses celebrity nude photo leak
News
Katie Hopkins appearing on 'This Morning' after she purposefully put on 4 stone.
peopleKatie Hopkins breaks down in tears over weight gain challenge
News
Boris Johnson may be manoeuvring to succeed David Cameron
i100
News
peopleHis band Survivor was due to resume touring this month
PROMOTED VIDEO
News
people'It can last and it's terrifying'
News
In this photo illustration a school student eats a hamburger as part of his lunch which was brought from a fast food shop near his school, on October 5, 2005 in London, England. The British government has announced plans to remove junk food from school lunches. From September 2006, food that is high in fat, sugar or salt will be banned from meals and removed from vending machines in schools across England. The move comes in response to a campaign by celebrity TV chef Jamie Oliver to improve school meals.
science
Arts and Entertainment
tv
Life and Style
fashionModel of the moment shoots for first time with catwalk veteran
Life and Style
fashionPart of 'best-selling' Demeter scent range
News
i100
Sport
Tom Cleverley
footballLoan move comes 17 hours after close of transfer window
Sport
Alexis Sanchez, Radamel Falcao, Diego Costa and Mario Balotelli
footballRadamel Falcao and Diego Costa head record £835m influx
Life and Style
fashionAngelina Jolie's wedding dressed revealed
News
i100
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Executive Assistant/Events Coordinator - Old Street, London

    £35000 - £38000 per annum + benefits: Ashdown Group: Executive Assistant/Event...

    HR Generalist (standalone) - Tunbridge Wells - £32,000

    £30000 - £32000 per annum: Ashdown Group: HR Generalist (standalone) - Tunbrid...

    Derivatives Risk Commodities Business Analyst /Market Risk

    £600 - £800 per day: Harrington Starr: Derivatives Risk Commodities Business A...

    Power & Gas Business Analyst / Subject Matter Expert - Contract

    £600 - £800 per day: Harrington Starr: Power & Gas Business Analyst/Subject Ma...

    Day In a Page

    'I’ll tell you what I would not serve - lamb and potatoes': US ambassador hits out at stodgy British food served at diplomatic dinners

    'I’ll tell you what I would not serve - lamb and potatoes'

    US ambassador hits out at stodgy British food
    Radio Times female powerlist: A 'revolution' in TV gender roles

    A 'revolution' in TV gender roles

    Inside the Radio Times female powerlist
    Endgame: James Frey's literary treasure hunt

    James Frey's literary treasure hunt

    Riddling trilogy could net you $3m
    Fitbit: Because the tingle feels so good

    Fitbit: Because the tingle feels so good

    What David Sedaris learnt about the world from his fitness tracker
    Saudis risk new Muslim division with proposal to move Mohamed’s tomb

    Saudis risk new Muslim division with proposal to move Mohamed’s tomb

    Second-holiest site in Islam attracts millions of pilgrims each year
    Alexander Fury: The designer names to look for at fashion week this season

    The big names to look for this fashion week

    This week, designers begin to show their spring 2015 collections in New York
    Will Self: 'I like Orwell's writing as much as the next talented mediocrity'

    'I like Orwell's writing as much as the next talented mediocrity'

    Will Self takes aim at Orwell's rules for writing plain English
    Meet Afghanistan's middle-class paint-ballers

    Meet Afghanistan's middle-class paint-ballers

    Toy guns proving a popular diversion in a country flooded with the real thing
    Al Pacino wows Venice

    Al Pacino wows Venice

    Ham among the brilliance as actor premieres two films at festival
    Neil Lawson Baker interview: ‘I’ve gained so much from art. It’s only right to give something back’.

    Neil Lawson Baker interview

    ‘I’ve gained so much from art. It’s only right to give something back’.
    The other Mugabe who is lining up for the Zimbabwean presidency

    The other Mugabe who is lining up for the Zimbabwean presidency

    Wife of President Robert Mugabe appears to have her sights set on succeeding her husband
    The model of a gadget launch: Cultivate an atmosphere of mystery and excitement to sell stuff people didn't realise they needed

    The model for a gadget launch

    Cultivate an atmosphere of mystery and excitement to sell stuff people didn't realise they needed
    Alice Roberts: She's done pretty well, for a boffin without a beard

    She's done pretty well, for a boffin without a beard

    Alice Roberts talks about her new book on evolution - and why her early TV work drew flak from (mostly male) colleagues
    Get well soon, Joan Rivers - an inspiration, whether she likes it or not

    Get well soon, Joan Rivers

    She is awful. But she's also wonderful, not in spite of but because of the fact she's forever saying appalling things, argues Ellen E Jones
    Doctor Who Into the Dalek review: A classic sci-fi adventure with all the spectacle of a blockbuster

    A fresh take on an old foe

    Doctor Who Into the Dalek more than compensated for last week's nonsensical offering