New year revolution

January is the time for New Year’s resolutions. But this month we are showing you six New Year’s REVolutions – to revolutionise your finances by cutting spending, boosting income, and avoiding fraud.

Savings
If you have money saved up you need to be vigilant to protect it from the bank or building society you keep it with and the taxman. Interest rates are currently falling. That is because the Government is lending banks up to £80 billion at a very cheap rate so they don’t need our money as much as they used to. So they pay us less for it. And if you are not vigilant they will give you as little as they possibly can – the worst savings rates are less than 0.1%! At that rate on £1000 of savings you would earn just £1 a year. But there are much better rates if you look for them – between 2% and 3.5%. You get more if you are willing to tie your money up for a few years – anything from one to five years. But you must be sure you really will not want it during that time. Or you can agree to give notice – say three months or six months – when you need to take it out. The worst rates are for instant access accounts – but even there you can get 2.5% on your ready cash. Remember – the price of a (half)decent return is eternal vigilance. Check rates and move your money every year at least. You can find the best rates from www.savingschampion.co.uk.

You should also make sure that the taxman does not take too much. By default any interest you do earn is taxed at 20%. So if you don’t pay tax you must make sure you tell your bank or building society and get it paid gross. More at www.hmrc.gov.uk/taxback

Energy
January is the coldest month – and that makes it the most expensive when it comes to keeping warm at home. So now is the best time to save money by changing your energy supplier. The average saving from changing is said to be more than £200 a year. Three ways to save the most: 1. Agree to pay monthly by direct debit. Many people hate direct debits but they do get you good deals. If the fuel company takes too much you can claim the excess back at any time. 2. If you have gas and electricity buy them both from the same supplier. These so-called dual fuel deals will usually be cheaper. 3. Go for a deal which fixes prices for the next one or even two winters.

You change supplier by going to one of a dozen or so registered ‘switching’ sites – such as www.which.co.uk/switch or call Which? on 01992 822 867.

Missing pensions
Thousands of us have paid into a pension at work and forgotten about it. Fortunately there is a free Government service which reunites people with their lost pensions. You will need details of where you have worked and when. The Pension Tracing Service has details of more than 200,000 pension schemes and helps thousands of people a year get access to a pension they have forgotten about or cannot find. Any job may have involved paying into a pension. In the past contributions could be compulsory so you may not even have been aware of the monthly deduction from your pay. Three quarters of people who apply for a trace are successful and three quarters of them gain between £9 and £29 a week and sometimes get a lump sum as well of £500 to £5000. More at www.gov.uk/find-lost-pension

Check your bank account
We can all be a bit lazy when it comes to money. And a lot of people never check their bank or credit card accounts. But it is worth doing. Charges can be taken without you noticing. Forgotten direct debits or standing orders can drain money from your bank account. Continuous payment authorities can similarly take money regularly from your credit card.

Three common problems. 1. Do you pay a monthly fee for your current account? If so it may well not be worth it. Ask your bank to switch to a free current account. 2. Check your direct debits and standing orders. Your bank will give you a list and if you bank online you can see one on your computer. Make sure you know what each is for. And if there are old ones that you no longer need cancel them. It won’t list recurring payments you made on a credit or debit card. So if you see small regular payments on either, check what they are. If you tell the bank or card issuer to stop those it has to follow your instructions. 3. Banks and credit card companies like to charge us for making mistakes. Perhaps a repayment was late or you went overdrawn accidentally. If you are a good customer these charges may be waived if you ring up and ask. But just checking what you pay can help you avoid these penalties in future.

Claim benefits
Up to £5 billion is left unclaimed by people over pension age. Around two million people could get more money each week or big discounts off their rent or council tax if they just asked. Often people do not claim is because they do not realise they can. Now there is a simple way of assessing your entitlement. If you have a computer go to www.entitledto.com and that will take you to a service which lets you enter your personal and income details and see if you can get help. It is completely confidential. If it says you have an entitlement then you can make a claim from the pension service on 0800 99 1234 or your local council. Alternatively you can call the charity Turn2Us on 0808 802 2000 or Independent Age on 0845 262 1863

Just say no
However much you save or gain from your own hard work a crook can take it away from you in an instant – literally. Online and telephone fraud are growing problems. The Home Office estimates that individuals lose more than £6 billion a year in fraud.

The saddest emails and letters I get begin ‘I realise now I was foolish but can anything be done?’ Unfortunately, once the money has gone it is often very hard to get it back. So make sure you realise you are being foolish before you say yes or send money to a complete, stranger often in another country. If someone calls to offer you investments in shares or forests or land or carbon it is almost certainly a fraud. Say no. If someone seems to know about shares you own and says they can find a buyer for them, it will also be a fraud. Just say no. Remember that no-one ever went bankrupt by refusing a tempting offer.

If you bank online remember to keep your anti-virus software up to date and change your password to one which mixes capital and lower case letters and numbers.

There is a lot of useful antifraud information at www.actionfraud.police.uk and you can report frauds on 0300 123 2040

Have a happy and prosperous 2013!

e-mail Paul Lewis on paul@paullewis.co.uk