Spring clean your finances!

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With spring in the air, our thoughts often turn to spring cleaning, but your home is not the only thing that could do with a spring clean each year. It’s important to review your financial affairs too, and now is a good time to do it, especially as it’s the beginning of a new tax year. Here are six ways to make sure your money is working hard — and that you’re not paying over the odds for monthly bills.

1. Be an ISA early bird

The government has just given each saver a whopping £20,000 tax-free savings allowance — the highest ever. You can save this amount any time between now and 5th April 2018. But the early-bird investor benefits from an extra year’s dividends on their investment. And those dividends will also benefit from further growth. Not everyone can maximise their ISA allowance at the start of the tax year, so regular savings are still an effective way to invest. This method tends to be particularly useful during volatile markets as your money buys more when markets dip, which is then worth more when they rise. Either way, start saving.

2. Review your home loan

Mortgage repayments are likely to be your biggest outgoing so make sure you’re getting the best deal. It’s estimated that around 4 million homeowners are currently paying their lender’s standard variable rate (SVR), which is the rate a mortgage automatically reverts to when an existing fixed-rate deal expires. But these rates can be poor value. Signing up to a new deal could work out cheaper as rates are so low at the moment, so speak to a broker and see if you switch to a lower rate. This will mean you pay less interest and your mortgage will be paid off faster.

3. Ditch your savings provider

The best savings rates are mostly for new customers, while the loyal ones sticking with the same bank or building society are often the ones who see rate cuts. Unless you switch, your money will be earning next to nothing. Check what rate you are receiving and move your money to the best paying provider.

4. Don’t overpay for investments

Platforms act as a place to buy, sell and hold all your investments. While charges for investing are unavoidable, but fees will eat into returns so you don’t want to pay over the odds. Different platforms offer different charging structures and services. Choosing the right one depends on the size of your pot, how you run your investments and what ‘extras’ you need on top such as access to research and analysis. Do a comparison on this site (calculator) to make sure your money is held in the right place.

 5. Don’t let auto-renewal catch you out

Unless you tell your insurance provider that you don’t want to continue with your policy, it’ll likely be automatically renewed at the end of the year. Insurance companies tend to increase their prices in the second year to re-coup the cost of discounts offered in the first year. So, compare deals for motor and home cover and consider switching to be sure you’re paying the best possible price.

 6. Save regularly

It doesn’t matter how small the amount is, if you save and invest regularly you’ll soon build up a little nest egg whether you’re saving for a specific purpose or a rainy day.  In addition, the government has made it easier with big ISA allowances and the annual personal saving income allowance of £1000, so make the most of it!

7. Boost your pension savings

When you make contribution to your pension, the government gives you back the tax you paid when you earned the money, so if you’re a basic rate tax payer and you make a contribution of £800, it’s rounded up to £1,000. These little top-ups will boost your pension significantly.  To find out more, look out for next week’s post on how to boost your pension pot.