Financial spring clean could result in thousands of pounds of savings, experts claim

News - Savings

Written by Ray Clancy

Tuesday, 02 March 2010 09:30

A financial spring clean could result in the average person being over £3,450 better off if they review their situation and seek out the best financial products currently around, it is claimed.

According to moneysupermarket.com there are thousands of pounds in savings to be made over the next 12 months simply by switching to the best deals.

‘There are some really easy savings to be made, just by spending half an hour reviewing where you’re at financially. It’s easy to be complacent but some rates on products change quite regularly so literally, it really does pay to be vigilant,’ said Clare Francis, site editor.

Mortgages should be reviewed as over the last month or so many standard variable rates (SVR) have increased, rates for new borrowers have been falling and there has been an increase in the availability of mortgages even at higher loan to value (LTVs).

‘With Base Rate at an all time low and only likely to increase, now may be the time to consider a longer term fixed rate mortgage,’ said Francis. For those with high level of savings it may also be a good time to consider an offset mortgage to make best use of all your capital, she added.

‘Whatever your circumstances shopping around for the best mortgage and keeping a close eye on mortgage rates throughout the year is advisable to ensure you get the best deal.
Someone with a £150,000, two year mortgage from Yorkshire Building Society fixed at 3.09% could save themselves £1634.76 a year against the average SVR rate of 4.69%,’ she explained.

Many people also do not use credit cards to their best advantage. Although some are savvy when it comes to making their plastic work hard for them with 25% using their card specifically for the reward points and 11% for cashback and 0% purchases, there are still many consumers who are yet to take full advantage of the benefits of their plastic, according to the company.

‘If you have a good credit history there are some great offers to be had. If a £2,000 debt on a card at the average rate of 18.52% APR is switched to a credit card offering 0% interest on balance transfers for the introductory period, such as the Virgin Credit Card, there would be no interest payments in the first year. This amounts to an annual saving of £264.11,’ Francis explained.

There is also savings to be made on personal loans. ‘Loan rates are at an all time high but we have started to see rates on the leading deals drop in the last few months. If a £7,000 five year loan at an average rate of 12.33% APR is swapped to an Alliance and Leicester loan at 8.9% APR, an annual saving of £156.77 could be made,’ Francis points out.

Other savings can be made on car and home insurance simply by switching provider and shopping around to make sure you are on the most advantageous tariff can save money on energy bills. ‘Moving online to a dual fuel direct debit deal is the easiest way to make savings. By switching to the best online tariff as opposed to the average standard QCC tariff, customers could save on average £325 over 12 months,’ said Francis.

Bundling your TV, landline and broadband can also result in savings of around £170 a year, the company reckons.