The full extent of Britain’s financial inertia was laid bare when passers-by in London and Manchester were offered a free £5 note – but most failed to take advantage of the no-strings attached offer.
Moneysupermarket.com wandered the streets wearing sandwich boards offering a free £5 note to anyone who asked. Despite encountering over 1800 people, only 28 passers by bothered to take advantage of the offer.
If more than 98 per cent of the people who passed by couldn’t be bothered to take advantage of free money, it raises some interesting questions about what needs to be done to persuade consumers to make an effort to improve their financial position.
With bills rising and no end to the credit crunch in sight, it’s well worth taking a bit of time to look at your outgoings and what financial products you have, to see if you can identify any areas where savings can be made – even small savings mount up over the course of the year, so think twice before you buy that coffee on the way to work tomorrow morning.
We recently saved one family more than £1,000 by identifying better financial and home service products for them. Click here to read that article.
Here are some tips which could help improve your financial situation:
We’re increasingly becoming a cashless society, with many people handing over a debit or credit card even for small transactions, but if you go back to the old fashioned way of paying with cash you will become much more conscious of how much you are spending – and will probably spend less.
Are you paying for gym membership you don’t use, or have a subscription for a magazine you don’t read? If so, cancel it. And go through your bank statement to see if there are any other direct debits or standing orders going out each month for things you’d forgotten about and don’t need any longer.
Take a packed lunch
Rather than buying a sandwich every lunchtime, take a packed lunch into work. This will probably save you about £3 a day which tots up to about £60 a month – that’s a saving of £720 a year.
Apply for an interest-free credit card
If you own money on a credit or store card move it over to an interest-free deal. And if you need a card for spending, you can also benefit from not paying interest. The Capital One Platinum offers 0% on balance transfers and purchases until 1 September 2009 – this is the longest ever interest free deal for purchases. Our comparison tool will enable you to find other interest free credit card deals.
Never get stuck on your lender’s standard variable rate. SVRs are typically at least one percentage point higher than the best mortgage rates, which can cost you thousands of pounds in extra interest over the term. If you are not tied into your current mortgage, call one of our advisers on 0845 345 5705 and find out if you could save by switching to another deal.
Shop around for insurance
According to research from the Association of British Insurers, the average person can save 35% by comparing just five different policies for a single type of insurance. Therefore imagine how much you can save by comparing over 50 providers in a moment on a price comparison site.
Switch current account
Most people have a current account that pays just 0.1% in interest, but you could earn significantly more than that. Alliance & Leicester’s Premier Direct account pays 8.5% for the first year. It also offers an interest free overdraft for the first 12 months.
Maximise your savings
While the credit crunch is bad news for borrowers, savers have never had it so good. Banks and building societies are battling for our money and this is resulting in some fantastic savings rates. Alliance and Leicester, Abbey, Birmingham Midshires and Kaupthing Edge all have easy access accounts paying at least 6.5% interest.
Cut your energy bills
Millions of households have never changed energy provider and they are still on their supplier’s standard rate. Swapping to an online deal such as British Gas’ Click Energy 5 Online tariff, could save the average household around £200 a year. Use our comparison tool to identify the cheapest provider in your area.
Save a bundle on broadband
If you currently receive broadband, home phone and digital TV from different supplies, you could save up to £450 a year by combining them all together and getting them from the same supplier. The cheapest broadband, phone and television deal is Sky See, Surf and Speak which has download speeds up to 2Mb, a 2GB cap, free UK evening and weekend calls and a variety or entertainment channel mix of your choice on a 12-month contract. The minimum monthly fee is £16, but you may pay more depending on what television package you opt for.
Have your say: Some people on our forum have encountered delays when opening a new account – have you recently switched your savings? If so, was it a smooth process or did you encounter problems on the way? Visit our forum and let us know.
Disclaimer: Please note that any rates or deals mentioned in this article were available at the time of writing.