Coupled with rising fuel prices and a hike in VAT, the beginning of 2011 has been tough for many people.
However, there are steps Brits can take to lessen the impact of these price rises and free up some cash according to the UK's number one comparison site, moneysupermarket.com.
Kevin Mountford, head of banking at moneysupermarket.com, said: "The recent increase in fuel and commodity prices coupled with VAT increases on 4 January has left all UK consumers feeling the pinch as the cost of living soars. It is easy to accept rising costs as a fait accompli but there are many ways people can lessen the impact. The first step should always be to review your outgoings, ensure you are on the best deal for your needs and start looking at ways you can be more savvy with your spending - all steps which can help to free up some vital extra cash."
moneysupermarket.com's top tips for reducing the impact of rising prices
- Review your mortgage - High inflation may lead the Bank of England to increase Base Rate. If you are on a variable rate mortgage and are worried about any increases to your monthly payment, consider switching to a fixed rate deal.
- Use a cashback credit card - If you can currently afford your monthly outgoings then consider using a cashback credit card and let your spending make additional money for you. You need to be disciplined and pay off your full credit card balance each month.
- Consolidate debt - Reduce expensive borrowing by consolidating existing debt to a 0 per cent credit card or low rate personal loan.
- Protect your savings - Protect your savings from the taxman. Utilising your full ISA allowance will help maximise your savings and prevent you paying unnecessary income tax on savings.
- Switch your energy supplier - People switching from their gas and electricity energy providers' standard tariff to the best online deal could save £187.
- Reduce the cost of motoring - Customers who use moneysupermarket.com to renew their car insurance save on average £270.
- Reducing your annual mileage will not only decrease your car insurance premium, but will also cut the cost of fuel.
- Shop online - Consider doing your supermarket shopping online and set up a favourites basket of essential products you will need. This way you won't be tempted by all of the additional offers which entice you when shopping in store.
- Use discount vouchers - Take advantage of discounts, vouchers and special offers to help reduce your outgoings.
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