Tag: savings

Working families see resilience plummet to just 19 days

  • The latest Deadline to Breadline report from Legal & General has found UK households’ financial resilience has shrunk by 21% since 2020 (from 24 days to 19 days)
  • People overestimate (by nearly six weeks – actually 41 days) how long they could fund basic living costs (such as housing costs, loans/ credit card repayments, utility bills and food) if they lost their income  
  • Cutting back has become the norm but the 5 million poorest workers in the UK have no financial safety net in the event they lose their salary

On average, working households are only 19 days from the breadline, according to a report from Legal & General. The new research has shown that households have seen the amount of time they can fund basic expenses decrease by 21%, five days less than in April 2020.

Households have average savings of £2,431 and debts of £610. Accounting for average daily expenses of £93, this would see the average household run out of money in less than three weeks if they were to lose their income.

The research found that most people underestimate how long their money would last, assuming they would have 60 days of breathing room were they to lose their job.

With household costs increasing significantly, and more businesses under pressure, this has raised concerns that many people across the country could be especially vulnerable to financial shocks should the worst happen.

Household energy bills, for instance increased by 54% in April 2022, a record increase, and are likely to rise substantially again in October and the New Year. 2

Cutting back ‘the new norm’

While a quarter of households are yet to notice an impact from the increased cost of living, cutting back – on both essentials (69%) and luxuries (81%) – is the new norm. Even the majority of those with no debt and a higher income (over £50k annually) are being more cautious. 61% of those with a household income of over £50k are cutting back on essentials.

Nearly 2 million adults have no money left each month, a rise of 330,000 in the last 2 years. Concerns are particularly high for the UK’s poorest workers. Those earning under £20,000 a year – 5 million people in the UK – are living paypacket-to-paypacket and the average household in this group has no safety net should the worst happen.

Legal & General’s recent Rebuilding Britain Index also found that the cost of living crisis is increasing inequalities between different parts of the country, disproportionately affecting households in areas where there is a greater need for levelling-up initiatives.

Older workers most at risk of overconfidence

Older workers in the UK (55 to 65 years old) tend to have higher levels of financial reserves they can draw on, meeting their expenses for an average of 99 days in the event they lose their income. However, these households are also the most likely to overestimate their safety net, assuming they can manage for at least 180 days.

This raises concerns as older households have less time to build their savings back up before retirement and typically find it harder to find new roles following redundancy. 

Bernie Hickman, CEO, Legal & General Retail, said: “Our latest research presents a challenging picture for working households across the UK. We often talk about managing money month-to-month but, as our findings indicate, for some it’s a case of day-by-day. 

“The cost-of-living crisis is squeezing the purses of people all over the country, leaving households of every shape and size with money worries. The fact is there is only so much people can do to manage their budgets in these difficult times but there are resources available that can help.

“Half of all people in the UK (52%) haven’t taken advantage of financial guidance available, including free services like MoneyHelper, to help make the most of what they have.

“It may feel overwhelming but we encourage people to do what they can now so they are best prepared for a further squeeze on finances coming this autumn.”

Legal & General’s Deadline to Breadline report, published later this year, will explore the financial resilience, security and engagement of working households across the UK.

To help people better understand their money and make informed decisions, the insurance and retirement provider has put together a financial safety net content hub signposting tools and resources.

What is ‘cash stuffing’? 

Financial expert explains the money-saving trend taking TikTok by storm

‘Cash stuffing’ is a money-saving technique currently blowing up on social media.

With the cost of living crisis impacting the majority of the UK, Gen-Z and Millenials are looking for new ways to save. Within the past year, Google searches for the term ‘cash stuffing’ have increased by 274% (Source: Google Trends/Glimpse) and the TikTok hashtag has generated over 498 MILLION views to date.

Dan Whittaker, Personal Finance Expert at CashLady.com, has released comments explaining the trending method of saving at home, how it works, along with the downsides:

What is ‘cash stuffing’?

“Cash stuffing is a method of saving money by physically withdrawing money from your bank account and organising it in a folder system.”

“Using a personalised folder containing several labelled envelopes, savvy savers divide their monthly outgoings into categories, label each envelope with a category, then select a budget for each category and put the allocated amount of cash into the envelope.

“For example, if your monthly take home pay was £1,000, you would make your essential payments as normal, such as rent, mortgage and bills. Then, you split the remaining money into several categories within your folder.

This could be for things like ‘the weekly shop,’ ‘birthday funds,’ ‘socialising,’ ‘holiday savings’ or ‘pocket money for kids.’ Each category and its envelope would contain the exact amount allocated in your budget.”

“The technique is also sometimes referred to as the ‘cash envelope system’.”

“At the end of the month, you can see clearly how much money you have spent in each area and track it on a spreadsheet. You can then readjust your budgets for the next month to stay on track. If you’re lucky enough to have funds left over, these should be moved into a separate folder which acts as bonus savings for whatever your ultimate saving goal is.”

 Why does it work for some people?

 “This method of saving can be a great way to keep you motivated to achieve your savings goals. Breaking down larger savings goals into smaller monthly targets makes the task of saving less overwhelming, and being able to literally see the money saved each month can lead to a greater sense of achievement.” 

“Also, seeing your money physically dwindle can make you more aware of the current state of your finances. Using Apple Pay, Paypal or even online banking can sometimes feel as though you aren’t actually spending money as there is no physical cash exchanged. With cash stuffing, you have a visual representation of your earnings and outgoings which can lead to a greater sense of awareness of your finances; when you see what you’re spending, you think more about what you’re spending.”

“This is perhaps why the method is particularly popular amongst young people, who have been brought up using online banking and are seeking a new way to view and manage their money.”

 “Another bonus with this method is that you’re avoiding the risks that can come with credit cards or overdraft fees. Avoiding credit cards altogether stops those prone to overspending from racking up debts, as once your monthly budget is gone, it’s gone.”

 What are the downsides?

“Security is the biggest downside. When your money is locked away in your bank it is protected by the banks security systems and protected by schemes such as the Financial Services Compensation Scheme.”

“However, with your money living outside of your bank in cash form, it may be more vulnerable to theft, loss or damage (for instance from fire). If this were to happen then you would essentially have no recourse to recover that money. If you are interested in this technique, investing in a safe or something similar would be advisable.”

“You also aren’t earning any interest on your money while it is not deposited in a bank, building society or other savings scheme.”
 

 How can I do it?

“If you want to give Cash Stuffing a try then firstly, you need to think about what you typically spend money on. Dividing your usual spending into categories will help you to start your envelope system. Spends such as shopping, dining out, entertainment, petrol, gifts and groceries might be the most consistent monthly costs to begin with.”

“Then, think of your longer-term savings goals. Assign an envelope for this, where you can start to deposit any spare change at the end of each month. This could be for a car deposit or saving for a renovation or holiday for example, but having a specific goal is a great way to keep you motivated. Having these additional folders means you’re always allocating some money to long-term goals.”

“Next, you need to work out how much money to assign to each category. If you know you spend too much on socialising, then lower your budget in that category, and so on. After you’ve budgeted, it’s worth creating a spreadsheet to track your spending, simply writing down how much you allocated and then spent that month. This creates an awareness of your spending habits and helps see where you went right and where you could cut back. Any leftovers can be added to your long-term envelopes to encourage you to keep going.”

“The important thing is to only spend what is in that envelope. Restrict your spending to only using the allocated amount on each category and you should have savings in no time.”

Over 50s to be hardest hit by the cost-of-living crisis and the financial impact of the Covid pandemic

A report by leading UK data scientists has revealed that the over-50s are being hit hardest by the current financial crisis and could face a lifetime of financial insecurity.  

That’s according to new research from the University of Edinburgh’s Smart Data Foundry, supported and funded by abrdn Financial Fairness Trust. 

According to the report, economic inactivity rates have risen a third amongst the over 50s since 2019, and people aged 50-54 face double the financial vulnerability risk than those aged 70-74.  

Findings reveal that people in their 50s and 60s are facing the ‘perfect storm’ of circumstances including redundancy, ill health or caring commitments combined with a lack of savings and pension provisions.   

To offset this loss of income, many people are being forced to withdraw lump sums from their pension pots to deal with pre-retirement income shocks.  

And with the majority of pension pots worth under £30,000, this is causing knock-on issues with income tax and entitlement to benefits.  Worryingly, the research also identified that those people who do cash in their pension pots early are 1.75 times more at risk of financial vulnerability in the future.   

To tackle this, Smart Data Foundry is calling on the Department of Work and Pensions to act now to reduce the risk of pension assets being spent before retirement. It recommends an increase to the current capital limit of £16,000 for means tested benefits and, for those on Universal Credit, the reform of the Support for Mortgage Relief (SMI) loan facility by removing the zero earnings rule. 

Chair of Smart Data Foundry, Dame Julia Unwin, explains: “We are seeing a pattern of people in their early to mid-fifties going from being in positions of comfortable, middle-aged breadwinners eyeing their future retirement over the horizon, to a generation suddenly finding themselves facing long-term financial hardship.  

“A combination of being unable to secure viable work, confused messaging over pensions, little by way of state aid, and the savage cost-of-living rises resulting in many making decisions that could have long-term negative consequences.  

“With this report and our key recommendations, we are calling for UK Government to intervene to protect and support the most vulnerable before it is too late. If they don’t act now, we will undoubtedly see even bigger problems in the years ahead. Data doesn’t lie; the evidence is there – older workers are at very real risk of financial vulnerability, but it is not yet too late to act.” 

The research study also uncovered a widespread lack of understanding about the benefits system, confusion about claims processes, and hardship arising from payment frequency.  To improve the transition to retirement, the report calls for increased government investment in the Pension Wise guidance service and expansion to include the state pension. 

According to the findings, older workers are encountering barriers to returning to work, including lack of digital skills, unavailability of flexible working, lack of specific government initiatives, ageism, psychological barriers, and retraining needs.  

The longer the unemployed worker remains out of work, the harder it is for them to find a suitable position and the greater their risk of falling into forced retirement.

The report calls for a government-funded employment programme targeted at those who need support in changing careers, starting from the first day of unemployment for the over 55s. 

Lead researcher Dr Lynne Robertson-Rose from the University of Edinburgh added: “We set out to understand the financial vulnerability amongst those in their 50s and 60s and have been surprised by the bleak picture that the data paints.

“Any disruption in earning capability in the decade before the state pension is forcing older workers to draw down on savings earmarked for retirement with little ability to top up the pot, leading to the risk of financial vulnerability becoming lifelong. 

“We have access to rich data supplied to Smart Data Foundry by UK financial institutions and these insights have furnished us with the information that enabled us to make policy recommendations.  It also flags  opportunities for the financial services and fintech sector to innovate in order to help individuals better manage their finances.” 

Karen Barker, Head of Policy and Research at abrdn Financial Fairness Trust, added: “Making decisions about your pension is tricky to navigate, and for those on lower incomes, advice is too expensive.

“The Government needs to improve access to advice on pensions planning for those on lower incomes to avoid a living standards catastrophe.”  

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Citroën welcomes NHS, Teachers & Emergency Services staff by extending ‘Citroën and You’ programme

  • ‘Citroën and You’ friends and family programme extended further to include NHS employees, Teachers and Emergency Services personnel.
  • Programme enables eligible customers to save up to an additional £1,200* on a brand-new Citroën car.
  • ‘Citroën and You‘ programme is available exclusively online through the Citroën Store.

Citroën UK is showing its appreciation for the incredible work of the NHS, Teachers and Emergency Services across the UK in recent years by extending its ‘Citroën and You’ programme.

The programme, previously reserved for friends and family of Citroën employees, welcomes NHS, Teachers and Emergency Services personnel into the Citroën family and allows users to save up to an additional £1,200* on a brand-new Citroën car.

‘Citroën and You’ is available to NHS employees, Teachers and Emergency Services personnel as a fully online experience via the Citroën store. Eligible users wishing to take advantage of the ‘Citroën and You’ programme can review current offers online, configure and personalise their car, place it in their shopping basket prior to checkout and access a discount with a personalised promotional code before completing the order.

The initiative launches this week with dedicated pages already live on the Citroën UK website. The offers extend across the Citroën passenger car range†, including C4 and ë-C4 Electric, New C5 Aircross and C3 Aircross SUV.

NHS Employees: https://citroen.co.uk/citroen-and-you-for-nhs.html
Teachers: https://citroen.co.uk/citroen-and-you-for-teachers.html
Emergency Services: https://citroen.co.uk/citroen-and-you-for-emergency-services.html

Last month, Citroën UK celebrated Sign Language Week (14 to 22 March) by extending the ‘Citroën and You’ programme to welcome British Sign Language (BSL) users. Citroën has pledged to become more accessible to the UK’s more than 150,000 strong deaf community. Last year, Citroën partnered with SignLive to become the first car manufacturer to introduce its online video interpreting service for deaf and hard of hearing customers across its entire UK retailer network.

British Sign Language users: https://www.citroen.co.uk/citroen-and-you-for-bsl.html

Eurig Druce, Citroën’s UK Managing Director, said: “Over the past two years we have seen the remarkable work the NHS, Teachers and Emergency Services have provided across the UK in the face of a global pandemic.

“To show our appreciation for the work they have done and continue to do for us all, I am proud to extend ‘Citroën and You’ to all NHS employees, Teachers and Emergency Services personnel so they can save on a great new Citroën vehicle.”

‘Citroën and You’ friends and family programme is exclusively available via the online Citroën Store, which allows customers to configure their vehicle, select the finance package that best suits their needs and order their new vehicle from the comfort of their own home.

*Current offer available at time of announcement. Subject to change in the future.

†Exclusions apply. Visit https://store.citroen.co.uk/ to see all available models.

Millions of people think inflation will leave them better off

More than half of all cash savers (52%) don’t know what impact inflation will have on the real value of their cash savings over time, while 13% believe inflation will leave them better off

New research from Legal & General1 has found that despite inflation reaching record levels many people in the UK are not aware of its impact on their finances. The findings reveal:

  • More than half of all cash savers (52%) don’t know what impact inflation will have on the real value of their cash savings over time:
    • One in 10 (13%) incorrectly believe inflation will leave them better off
    • 13% think the real value of their savings would stay the same
    • More than a quarter (26%) say they don’t know what impact inflation could have on their cash
  • Millions of savers (64%, the equivalent of 10.3 million) have taken no action on their savings, despite cash earning next to nothing in interest and inflation rising steeply. In fact, half of all savers (54%) currently keep their money in cash over the long-term.
  • The total cost of “saver inaction” in such an environment (6% inflation) could amount to £18 billion if this trend continues over the next five years2.
  • Savers currently have £136 billion sitting in cash ISA accounts on average interest rates of 0.26% per year3.
  • Legal & General analysis shows the impact of inflation for every £1,000 stashed away:
Inflation rateAverage £ lost overfive yearsTime for savingsto halveNational cost of saver inaction overfive years
6%£24313 years£18 bn
7%£27811 years£21 bn
8%£311Under 10 years£23 bn

Source: Legal & General, 2022

Emma Byron, Managing Director, Legal & General Retirement Solutions, said: “Inflation is at its highest rate for three decades and it’s worrying that savers don’t realise its eating away at millions of pounds sitting in low-interest paying accounts.

“Understanding the impact of inflation is crucial to understand how much money you have in real terms. Whilst it is essential to keep some cash in the bank for an emergency fund, savers might want to consider other options to make their money work harder.”

Three ways of protecting your savings from inflation


Tip 1: Work out how much to put aside as an easy-access emergency fund

The Money Helper4 service suggests that you should save for emergencies. As a rule of thumb, you’ll need enough to cover your essential expenses for three months.

You should be ready cover bills like energy, your mortgage, travel and food costs, so should the unexpected happen, you’ll be prepared.

And you’ll know exactly how much money you need to keep in cash (which can be hit by inflation), so you can start saving any extra income in more inflation-proof ways.

Tip 2: Get best the interest rate you can on your savings

Make sure that any cash savings you have are getting the highest interest rate possible.

These days you can switch savings accounts and ISAs relatively easily. But if you do find a higher rate, remember that they can quickly go down.

For example, it’s common for Cash ISAs to offer high rates for the first year. Those rates can drop dramatically after the first year. So always set a reminder to keep an eye on any new savings rates you find. You can find more information on most bank websites and compare interest rates on comparison websites.

Tip 3: Think about investing your money or topping up your pension to beat inflation

It’s important that consumers are aware of the long-term impact of their pension contributions, alongside the compound effects of investing.

So if you can stash your savings away for the long term, think about topping up your pension, or investing in a stocks and shares ISA.

People will understandably be feeling unsure about the future at this moment in time, but the key thing to remember is that investing is for the long term.

With time on your side, you can balance out the ups and downs of market volatility. And if you have an emergency fund, you might well be able to ride out any storms and leave your investments untouched. That’ll give them a chance to go back up in value again.

Scottish Building Society posts its best results in its 174-year history

World’s oldest remaining building society sees major growth in savings and mortgages

Scottish Building Society, the world’s oldest remaining building society, has posted record results for the financial year ended 31 January 2022.

Established in 1848, the mutual has seen its balance sheet grow by nearly 40% in the last 2 years, leading to a pre-tax profit of £2.4m and mortgage assets of £454m.

The Society, which only offers savings and mortgage accounts, ascribed the growth to customers seeking both value and purpose when joining SBS.

The Society’s Chief Executive, Paul Denton said: “We are as committed to our wider purpose today, as we were back in 1848.  As a mutual society, we reward our members with fair interest rates whilst responsibly using those funds to provide flexible mortgages, enabling Scottish people to buy homes and get on the property ladder.

“The environment has changed over the years, but that simple strategy has helped the Society survive and thrive towards its 175th anniversary next year.”

As the society is a mutually owned organisation, it has been able to offer its members savings accounts above market average interest rates, helping people get the most out of their money.

Mr. Denton continued: “Despite the historic low base rate, we have continued to pay savings rates above the market average, whilst our income has benefitted by growing our mortgage balances more than 36% in the last two years.

“We are now helping more members buy their homes than ever before, which is something we are incredibly proud of in today’s fierce mortgage market.

“As a mutual, unlike the high street banks, we do not have shareholders, so all profits are reinvested into the business, in areas such as in new digital technologies, improving our member experience and increasing our capital base to support future growth.”

Mr. Denton credits the staff at SBS for their “immense work” during the pandemic as one of the reasons why the society has performed so strongly.

He explained: “It has been without doubt two enormously difficult years from an economic and operational perspective, but our staff have delivered outstanding results despite these major challenges.

“Unlike retail banks who are moving out of towns and cities across the country, we are working harder than ever to provide for our members- be that through online or in-person banking.

“When many of our competitors sought to save money by cutting services, we were looking for ways to help our members, by offering compelling interest rates for savers and have now helped a record number of people own their own home.”

Thousands of teenagers missing out on Child Trust Fund cash

HM Revenue and Customs (HMRC) is today urging young people to check if they have a hidden pot of gold – in the shape of a Child Trust Fund (CTF).  

It is now one year since the first account holders started turning 18 and around 55,000 CTFs mature every month. This means their owners can withdraw funds or transfer savings into an adult ISA. Hundreds of thousands of accounts have been claimed so far, but many have not. 

CTFs were set up for all children born between 1 September 2002 and 2 January 2011 with a live Child Benefit claim. 

Parents or guardians set up these accounts with Child Trust Fund Providers – usually banks, building societies or investment managers – using vouchers provided by the government. If an account was not opened by the child’s parent, HMRC set one up on the child’s behalf. 

Between 2002 and early 2011, about six million CTFs were opened by parents or guardians, with a further million set up by HMRC. 

Economic Secretary to the Treasury, John Glen, said: “It’s fantastic that so many young people have been able to access the money saved for them in Child Trust Funds but we want to make sure that nobody misses out on the chance to invest in their future. 

“If you’re unsure if you have an account or where it may be, it’s easy to get help from HMRC to track down your provider online.” 

Some young people may not know they have a CTF – or some parents or guardians may have forgotten who they set the account up with. To help them find their accounts, HMRC created a simple online tool.  

Any young people unsure about whether or not they have a CTF should first ask a parent or guardian if they remember setting one up. Once they know who their provider is, they should contact them directly – and either request to withdraw the money or transfer the funds into an adult ISA or other savings account. 

For those who cannot access the tool, HMRC will provide alternative, non-digital routes to finding a CTF provider upon request. HMRC will send details of the provider by post within three weeks of receiving their request.  

The accounts were set up to encourage positive financial habits and a saving culture among the young account holders. HMRC is working with the Money and Pension Service (MaPS) and the CTF providers to continue to provide financial education to the beneficiariescation to the beneficiaries.   

At 16 years, a child can choose to operate their CTF account or have their parent or guardian continue to look after it, but they cannot withdraw the funds. At 18 years of age, the CTF account matures and the child is able to withdraw money from the fund or move it to a different savings account.

Consumer finance expert: How to fix finances for Summer

Relaxed restrictions in Scotland offer the chance to make the most of many of the much-missed activities that the pandemic put a stop to, from concerts to theatre trips and holidays abroad. But before you splurge on some much-missed activities, consumer finance expert PAUL WILSON explains ways you could get your finances in order first. 

With over 20 years experience in consumer finance, Paul has highlighted common pitfalls that consumers often fall into and the simple ways that consumers can get their finances in check whilst still making the most of the summer. 

“Many Scots will be excited to make the most of the things that they’ve missed out on in the past year, from concert tickets to holidays abroad. But, whilst there’s temptation to splurge and ‘go all out’ this summer to make the most of the relaxed restrictions, it’s important to make sure that spending doesn’t get out of control.

“Having worked in the finance industry for 20 years, some of the most common money management mistakes I see people make are not actively monitoring and striving to improve their credit score, not setting and sticking to a monthly budget and spending beyond their means on what often turns out to be frivolous.

“As things open up more, it’s important for consumers to enjoy their money, without falling back into bad habits they may have broken in lockdown. There are simple tricks and spending behaviours that can be adopted to make sure people keep their finances in check.”

Cancel those unused, or under utilised, subscriptions

“For many of us, TV and entertainment subscriptions were an essential part of getting through lockdown. But as restrictions lift and it’s easier to do more of the activities that used to fill your time, you may find that some subscriptions go unused.” 

“Check your subscriptions. It’s easy to sign up for a new subscription service – particularly when many companies offer free trial periods or low cost sign up offers – and then forget to cancel it. Or perhaps you have a number of subscriptions that you do use, but you could ask yourself how essential they really are. If you can live without it then you could save money by cancelling the subscription or choosing a cheaper alternative.”

Update your utilities providers

“The summer months are a great time to review your insurance and utilities providers. As things open up more, life admin tasks like this can fall by the wayside, so set aside some time to check your spending and see if you can get a better deal.” 

“Shop around for all of your insurance and utilities. Generally speaking, loyalty doesn’t pay when it comes to products such as insurance, energy, broadband and TV, and there are usually cheaper deals for an equivalent product out there. So when it comes time to renew one of these products, don’t just accept the renewal price – use a price comparison service to check for the best deals available.” 

Budget for your new lifestyle

“As tempting as it is to splurge this summer, make sure you properly budget all of your new spends, from setting aside a budget for going out and leisure activities to factoring in how much you want to spend on drinks at the pub or online shopping.”

“Calculate how much you have coming in each month and how much your essential financial commitments are (e.g. mortgage/rent, transport costs etc.) and therefore what you can afford to put away into savings and what your disposable income is. Once you have your budget – stick to it! Post it up somewhere in your house where you will regularly see it or set reminders on your phone to prompt you to check how you are tracking against your budget.”

Get on top of the weekly food shop

“For many of us, staying at home more often in lockdown meant spending more money on food and treats. So, the relaxing of restrictions is a great time to get on top of your food bill.”

“Save money on your weekly food shop by planning a menu and a shopping list to ensure you only purchase the items you need. Embrace batch cooking and freeze portions to be eaten at a later date – this may help avoid being tempted to use costly food delivery services when you haven’t got anything in for dinner. Consider choosing one of the budget supermarkets such as Aldi or Lidl for the bulk of your shop and downshift from brand name items to own-brand.” 

Spend savvy

“With more people getting out and about and making the most of the summer, there’s more incentive to buy new things, from new holiday clothes to treating yourself to see a band you haven’t been able to see live since 2019. So, if you’re planning on treating yourself, try using comparison sites that offer savings incentives in order to get your money to go further.”

“There are a number of ways you can save money when you are purchasing online. Firstly there are cashback sites that offer money back in your pocket when you purchase via a special tracked link – it costs you nothing extra, takes just seconds longer, and if you were going to buy the product anyway it’s a no brainer. Secondly there are browser extensions and apps you can use to hunt out bargains. For example, InvisibleHand is a chrome extension that runs in the background of your browser and automatically notifies you if it can find the product you are shopping for at a lower price on another site. Similarly, Honey is an extension that automatically finds and applies discount codes at the checkout when you shop online.”

Think about your credit options for big purchases

“It’s great to see the travel corridor opening up and more countries being added to the green list so that everyone can get a much-needed summer holiday. But as tempting as it is to go away, it is important to properly review your finances before committing to a summer holiday.”

“Save up for big purchases wherever possible rather than putting them on credit. Taking the time to save the money can give you time to evaluate if the purchase is really something you want or need. If you have the cash up front it will save you money on paying any interest and avoids any potential damage to your credit score through missed repayments. And remember, it’s tempting to pay for the holiday of a lifetime on a credit card, but then you’ll be paying for that holiday many years after you’ve come back.” 

Track your spending

“It can be very easy to lose sight of how you are spending your money so use a money tracking app linked to your bank account to ensure you keep track of every pound leaving your account.”

“Many money-tracking apps let you categorise spending and easily set budgets for different categories, such as shopping, eating out and groceries. This allows you to properly keep track of your personal finances and stick to your budget, as helpful notifications will let you know when you’re close to your budget for each category.”

Put savings away

“Don’t let the excitement of relaxed restrictions stop you from putting money away for a rainy day. Try to put a small amount away as soon as you get paid, or try saving a few pounds a week to kick-start your savings pot.” 

“If you do have any left over cash at the end of the month, put it in a savings account and try to build up an emergency fund. As a general rule, you should ideally have 3 months worth of critical expenditure (rent, food, bills etc) in your savings account to deal with unforeseen circumstances such as a redundancy or replacing an essential appliance.”

Save on travel to work

“One of the best things that came out of the pandemic is the uptake of cycling, with millions of Brits getting on their bikes to enjoy exercise and space outside in lockdown. Whilst some offices are inviting staff back to work in the office, a blended approach of remote and office-based working has been adopted by many businesses, which takes the pressure out of travelling in peak commuting times.”

“If you can sacrifice the convenience factor, you can save some significant money on fuel and parking by ditching the car and walking or cycling whenever possible. For example, could you walk or cycle to work? Even if it’s just one or two days per week or even just when the weather permits, the money saved can quickly add up.” 

“If I were to choose one of these tips as the most important, I would say that the additional benefits of walking or cycling – both in terms of the benefits to an individual’s health but also to the environment – make ditching the car more frequently the most important tip.” 

Paul Wilson is a consumer finance expert at Financial Conduct Authority authorised and regulated credit broker Little Loans.

Free financial health checks with local financial planner

To celebrate Financial Planning Week 2020 (5-11 October 2020) and World Financial Planning Day (7 October 2020), wealth manager Charles Stanley is offering free one-hour consultations with a financial planner.

Advisers in the Edinburgh office will be on hand to help people understand how they can achieve financial wellbeing and identify what steps they need to take to help reach their future goals. 

With the market and future so uncertain due to the Covid pandemic, many people are looking at their financial situation as their circumstances are changing, but planning finances can appear daunting and getting it wrong could be very costly. 

Anyone with questions around areas such as retirement, savings and investments or estate planning and inheritance, might benefit from getting an outside expert view.

Sam Cowan, Financial Planner at Charles Stanley says: “Many people think that only very wealthy people need advice, but nothing could be further from the truth.  Anyone planning for life milestones such as buying a home, planning for retirement or saving for their children’s university education can benefit. 

“There have been a number of tax and pension changes over the last year which can be complex which means people often miss out on available options and getting advice can really pay off and make a difference to your financial future.”

To book a video or telephone appointment for a free one-hour, introductory meeting call 0203 553 7384, email or fill in the form through our website. Appointments are limited and are allocated on a first come first served basis. 

Top 10 reasons to see a financial planner:

  1. Retirement:  Avoid common retirement planning traps and get help in making crucial decisions such as whether it’s better to buy an annuity and how to get the best deal or if it’s better to draw money from your pension without buying an annuity to secure your future income.  Some people may be considering, or forced to consider, early retirement and need help in putting their affairs in place. 
  2. Pension planning: many people are notputting enough aside to ensure the retirement they ideally want, while others want help in transferring their pensions from one scheme to another and consolidating them.

3. Inheritance:  whether you have inherited a sum of money and want to make the most of it, or if you want to plan ahead for passing on your estate to make sure your loved ones get as much of your hard-earned money as possible, it is worth getting advice.   The sooner you start planning, the more options you have to minimise the amount of inheritance tax that might be due, such as looking at trusts or lifetime gifts and annual exemptions.  Similarly, if the main or sole earner in your household has passed away you may need help in sorting out your financial affairs.

4.       Children’s savings:  saving little and often from an early age can build into a substantial nest egg by the time your children leave school.  Explore the most tax-efficient options of saving, from JISA’s to pensions, and whether cash or stocks and shares solutions are the most appropriate for your needs. 

5.       Preparing for life milestones: whether you are looking at buying your first home, changing career, starting a family, paying for your child’s education or planning for retirement, it’s important to make sure you are financially prepared. Take time to set goals and think about what your priorities are to put the best savings scheme in place for your life ambitions.

6.       Succession planning: having a succession plan in place is crucial to safeguard a continued smooth running of your business or estate.  Transferring a business to a new owner can have significant tax implications, so it’s important to understand how the funds from the sale of your company may tie into your own personal wealth objectives.

7.       Tax-efficiency:  tax rules are complex and there are a number of tax allowances and exemptions to be aware of, to ensure you are not paying more tax than you should be.  From Capital Gains Tax (CGT) and Inheritance Tax (IHT) to Charitable Giving and tax-efficient saving, there many ways to make sure you are taking advantage of all the legitimate tax breaks you are entitled to. 

8.       Long-term care planning: with the onus increasingly on the individual to meet some or all of the expense of long-term care should it be needed, there are a number of options to consider, from covering the costs from savings and investments or taking a Deferred Payment Agreement (DPA) with the local authority to equity release or taking out an immediate care annuity.  By planning early, you can ensure you are prepared. 

9.       Divorce:  going through a divorce is a stressful transition and a financial planner can be invaluable when it comes to cataloguing assets and advising on potential distribution, as well as other important factors, to ensure you are in the best possible financial position going forward. 

10.   Lifestyle protection:  make sure your family is protected and reduce the burden of life-changing events by arranging flexible protection policies to provide peace of mind such as life insurance, critical illness cover and income protection.

How to choose a financial planner

  • Get a recommendation:  speak to family and friends and see if they can recommend anyone.
  • Check qualifications and expertise
  • Get references:  speak to existing clients and check if they advise any clients in a similar situation to you.
  • How do they charge?  Make sure you get a breakdown of their charges and that you fully understand what you are getting for your money.
  • The psychology of money:  can the financial planner work out a financial life plan for you and create a vision for the future with a related financial plan?
  • Meet them:  make sure you feel they understand you and what you are trying to achieve.  Establishing a relationship with a financial planner you can trust is critical to achieving your goals.  Make the most of free consultations.
  • Do the understanding test:  make sure they explain everything clearly and don’t use jargon.  If you can explain their advice to a family friend, and if they understand it and can sense check it for you, then that’s a good way of checking that advice is sound.
  • What do you really, really want?  be clear about the advice you are looking for and what you hope to gain from the meeting and make sure they can offer it and are focused.
  • Check they are regulated:  they should be authorised by the FCA so check they are on its Register.