A survey of 400 companies by the British Chambers of Commerce revealed that 58% plan to freeze wages this year with a further 12% expecting to have to reduce salaries. This comes at a time when more of us are struggling to make our pay last.
So how can you give yourself a salary boost and make your money go further? Here are our top 10 tips:
Tip one: Use your ISA allowance
Returns on ISAs are tax-free so this is a savings vehicle well worth taking advantage of. Currently you can invest up to £7,200 a year into an ISA – you can either put the entire amount in a stocks and shares ISA or split it and invest half of it – up to £3,600 – in a cash ISA.
With interest on cash ISAs being tax-free, this effectively means higher-rate taxpayers receive a 40% boost on their return, while those in the basic tax band receive 20% more interest than they would if the money was held outside an ISA.
The top-paying easy access ISA account is the Barclays Golden ISA at 3.61%. Minimum investments begin at just £1 although it does not allow transfers from previous year’s ISAs. The NatWest e-ISA accepts transfers, and pays 3.51% if you’ve got over £10,000 in it, or 3.25% for less than this. However, it is only available to NatWest current or savings account holders. Use our savings comparison tool to compare more ISA rates.
As announced in last month’s Budget, the ISA limit is increasing to £10,200 a year (up to £5,100 of which can go into a cash ISA). The higher limit takes effect on October 6 for those aged 50 or over. Anyone under the age of 50 must wait until next April for the benefit to increase.
Tip two: Capitalise on Government benefits
Check to see if there are any state benefits you are missing out on. You can find out easily by checking out Entitledto.co.uk, which has a regularly updated calculator and will show you what benefits you can pick up.
There are other entitlements you might qualify for too such as bereavement and guardian’s payments; employment and support allowance; support for mortgage interest; and education maintenance allowance. If you’re struggling for cash the best thing to do is pop along to your local Citizen’s Advice Bureau for a detailed benefits check-up.
Tip three: Slash hundreds of pounds off your insurance costs
Make sure you’re not paying more than you need for products such as car and home insurance.
Independent research found that motorists can save an average of £155 on their annual car insurance premium by using moneysupermarket.com’s comparison tool. Chances are you’ll probably also be able to save on the cost of home insurance too – the average saving here is £116.
Moneysupermarket compares more prices than any other comparison site and it literally only takes a matter of minutes to input your car or home insurance details, making shopping around for the best deal easy.
Tip four: Make the most of tax-free NS&I products
National Savings & Investments (NS&I) offers a number of tax-free products so if you’ve used your ISA allowance and have more money to save, these are well worth considering.
Tip five: Use discount vouchers
Wayne Rooney and his wife Colleen were recently spotted at a restaurant using a half-price coupon to buy a meal. Clearly the stigma of using money-off vouchers is long gone and rightfully so – after all, what could be better than getting something you’re going to buy anyway for a lot less money?
Our new vouchers section has all the latest offers so see if there are savings to be made before you buy. Some of the offers available currently include a buy one get one free deal on Nivea Suncare at Boots; two for one on a main course at Pizza Express and Gourmet Burger Kitchen; and 30% off online orders of clothing from Marks & Spencer.
Tip six: Shop cleverly
If you’re a shopaholic then it’s time to tighten those purse strings. Become stricter about how you shop such as by making a list of essentials and sticking to it and picking up no-frills or the supermarket’s own products instead of expensive brand names. Take advantage of home delivery too – Waitrose now offers all customers free delivery on orders above £50.
Buying online, whether it is groceries or consumer goods, can also help you save and it removes the temptation of window shopping on the high street. Our shopping channel will help you compare prices.
Tip seven: Pick up freebies
Why pay for something when you can get it for free? One of the most common areas where we pay more than we need is with our home services. If you pay separate providers for your home phone, broadband and television, you can probably slash the monthly cost.
Sky and Virgin offer bundles where broadband is thrown in free if you have a TV and phone package. Similarly, Talktalk offers free broadband to its home phone customers.
There are other ‘freebies’ to be had – if you’re looking for a new mobile deal, then opt for a contract that includes a free handset.
And as Kevin Mountford explains in his article, ‘Fancy pocketing £100?’, Alliance & Leicester is offering £100 if you switch to its Premier Current Account but as well as the cash, you get free European annual multi-trip travel insurance too.
Tip eight: Reduce fuel costs
Another rise in fuel duty was announced in the Budget, but there are still ways to drive your motoring costs down. Firstly make sure you’re going to the cheapest forecourt in your area by entering your postcode into petrolprices.com.
From there, look at ways to drive more efficiently. For example, driving at 70mph can use 25% more fuel than driving at 50mph with 56mph considered the optimum speed for efficient driving, where legal. Avoid harsh acceleration, limit your use of air conditioning and plan your journeys to avoid the rush hour and find the shortest routes. Try and run as many errands as possible in one trip and if possible see if you can put your car aside altogether and cycle or walk to your destination instead.
Tip nine: Use a cashback/reward card for spending
Credit cards are often associated with debt but cashback and rewards cards can add £100s a year to your income if you use them smartly.
Rewards cards are great if you find a reward you can capitalise on frequently, such as air miles for regular travellers. However, cashback cards have the advantage of giving you tax-free money every time you spend – and of course money can be spent on anything you want. Currently the American Express Platinum Card pays cardholders 5% cashback for three months up to a maximum of £2,000 spending – after that its rates are tiered with cashback up to 1.5% available.
Just remember the golden rule and set up a direct debit to pay off the card in full each month or the interest you will pay will quickly wipe out the money you gain.
Tip 10: Staying in is the new going out
Don’t assume that you have to spend a night on the town in order to keep your social life intact. You can save money by staying home with a DVD or inviting friends over for a meal.