The year ahead for your money

Many of us make the same resolution every year – to get our finances in order. However, this is the year I want us all to see that resolution through and so I’ve asked the Rate Alert experts to offer their predictions and tips to help us make the most of 2008…

 So what’s your resolution for the New Year? Mine is the same as last year’s – to get in shape. Sadly though, if I’ve not developed a washboard stomach after a week or two, I usually give up.

Then again, if someone offered me money to keep at it, I might be a little more persistent.

Indeed that’s what makes organising your finances such a fantastic New Year’s resolution – because it’s one with which you see instant results. Just by making a few minor alterations here and there you could be saving hundreds of pounds every month.

Of course to achieve those results you’ll need some guidance – and so I’ve asked each of the Rate Alert experts to offer their predictions for 2008 and what they think your resolutions should be - to help you make the most of your money.

Predictions and tips for 2008

  • Banking by Kevin Mountford, Head of Current and Savings Accounts

Predictions: The Office of Fair Trading should soon find a solution to the bank charges saga and this should restore customer confidence and kick-start activity in the market. The Bank of England base rate should fall, which may lead providers to devise more “creative” products – for example, accounts with hefty withdrawal penalties.

With that in mind customers should pay close attention to the terms and conditions and features available with each account and not just the headline-grabbing interest rate.

Your resolution: To move to a bank account that offers a decent level of interest. Far too many of us are sitting on rates as low as 0.1% when we could be earning as much as 8% on a current account and more than 6% with a savings account. Check out our current account comparison tool and savings account comparison tool to see what’s available and don’t be afraid to switch.

  • Mortgages by John Myers, Head of Mortgages

Predictions: The good news is that the base rate should continue to fall – but the bad news is that the financial markets are likely to remain turbulent and this will mean lenders keep a tight reign on who they lend to.

In particular, be wary of high fees as lenders focus on profitability. A cooling housing market means good news for first-time buyers. It will be more difficult to join the buy-to-let market however, due to restrictions on products, though landlords will be encouraged by high demand.

Your resolution: To evaluate your mortgage costs and consider a re-mortgage sooner than later. With the base rate likely to fall over the coming months the most attractive tracker deals are available now.

A bird in the hand is always better than two in the bush. So, despite the likelihood of further rate cuts, if your fixed mortgage deal comes to an it’s still worth seizing another fixed deal as quickly as possible so you can bank some savings. Use our mortgage comparison tool to see what’s available.

  • Broadband by Rob Barnes, Head of Broadband

Predictions: The issue of customers not receiving the download speeds they expect will carry over into the new-year with Ofcom likely to force providers to give clear guidelines on the speeds people can expect. The market is likely to develop with even more competitive deals and perhaps a handful of new providers joining the fray – particularly in the triple play market. Also expect VoIP to become increasingly popular – it is likely to be bundled in with many broadband deals.

Your resolution: To keep an eye on the broadband market and consider moving to a bundled deal that combines two or more of broadband, mobile phone, home phone and television services. There’s little point in dealing with a series of monthly bills for separate services at higher prices when you could pay as little as £30 a month for a broadband, home and TV deal. Our broadband comparison tool will show you what’s available and all you need to do is enter your postcode to compare the market.

  • Credit cards by Steve Willey, Head of Cards and Payments

Predictions: With loan providers tightening their lending criteria I would expect 0% balance transfer deals to become a serious borrowing alternative. Expect a hike in balance transfer fees but with an increase in the length of the 0% periods made available as providers look to compete at the top of best buy tables. As ever, a borrower’s best friend will be their credit rating and the top deals will be reserved for those without blemishes on their portfolio.

Your resolution: Make it a priority to get a copy of your credit report (available for as little as £2 through agencies such as Equifax, Callcredit and Experian) and iron out any inaccuracies. If you have a less than perfect credit score, don’t waste time applying for cards you won’t qualify for – use our credit cards SmartSearch tool to search based on your credit profile and start building your credit score by making payments on time.

  • Loans by Tim Moss, Head of Loans and Debt

Predictions: With the after-effects of the credit crunch likely to hang over for some time yet, unsecured loans will be more difficult to come by. Secured loans will be easier to grab but of course that means your property will be at risk if you fail to make repayments.

Your resolution: To reiterate Steve’s point, my message is - sort out your credit profile, as the tiniest glitch on your profile could put good interest rates out of reach. Remember that applying for loans and being rejected will leave a footprint on your profile – so search using our loans SmartSearch tool to get a realistic evaluation of what’s available to you. If you are in debt, consider debt consolidation as a way to bring your outgoings under control – our debt solutions section offers more advice.

  • Mobile phones by Rob Barnes, Head of Mobile Phones

Predictions: Regulation is desperately needed in the mobile phone industry – especially over cashback deals and mobile slamming (bombarding people with calls to sell new contracts). Hopefully Ofcom will get a grip on both issues in 2008 and there should also be a significant reduction in the costs of data roaming as the European Parliament launches an enquiry into the fees British companies charge.

Your resolution: Take a look at your most recent mobile phone bills and look at where you are wasting money. For example, are you on a contract with hundreds of free texts or talk-minutes a month and yet you’re not coming close to using your quota? You could make significant savings by moving to a deal that more accurately suits your usage levels. Check out our mobile phones section for the latest deals on contracts and PAYG mobile phones as well as the latest handsets.

  • Gas and electricity by Paul Schofield, Head of Utilities

Predictions: There has been a lot movement in the market in December with nPower introducing its SOL 9 product and E.ON reshuffling its Price Protection and Guarantee tariffs. Further movement is expected early in 2008 and it’s unlikely to be good news for customers with providers using a rise in wholesale gas prices to justify further price increases.

Your resolution: Search the market for a better deal as soon as possible. Remember that when a provider introduces a new tariff you won’t be placed on it automatically – you have to actively switch to the better deal. With every provider having implemented price cuts in 2007, if you didn’t pick up a new tariff in the last twelve months you can almost certainly pick up a better deal by moving - even if you stick with your current supplier.

However, you must be quick before price changes are implemented – and consider fixed deals as a way of securing your finances, with more price hikes expected. Remember you can earn £30 cashback by switching both your gas and electricity tariffs through our gas and electricity comparison tool.

  • Insurance by Richard Mason, managing director of moneysupermarket.com (insurance channels)

Predictions: Back to me, and unfortunately I’m not the bearer of good news. Premiums are likely to go up across the board with an increase in hybrid and electric cars (which are expensive to insure), last year’s floods affecting home insurance, and a backlash to last year’s travel cover price wars, all contributing to price hikes.

On the flipside however, the Financial Services Authority (FSA) is expected to provide more information on payment protection insurance which should increase confidence in these products, if only marginally. Also we could well see the introduction of a travel cover no-claims discount, an industry first, in which travellers declare if they have ever made a claim before.

Your resolution: You still have the opportunity to save money because of the sheer number of providers on the market and through the popularity of price comparison websites – so make the most of it. Your resolution should be to evaluate your car and home insurance premiums at least once every six months and shop around using our car insurance and home insurance comparison tools. It costs nothing to search but the savings could be significant. Also remember to shop around for travel insurance and payment protection insurance too rather than accepting them as expensive add-ons to holidays and mortgages/loans respectively.

So instead of just aiming to lose pounds from your waistline in 2008, make it your resolution to put them into your wallet. Following our experts’ tips you could save enough money to afford some top-notch exercise equipment… or something else entirely!

Happy New Year from everyone at Rate Alert!

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