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