We’re fast-approaching the end of the tax year and if all the “use it or lose it” ISA reminders are only serving to remind you that you haven’t stuck to your new year’s resolution to invest - yet again - then help is at hand.
Here’s how to start a savings plan that you can stick to. Yes, even you. And this doesn’t even require you to find money that you don’t have.
It’s far easier to save than you think. Just take a look at your day-to-day spending and look for those easy to trim purchases that you could just as easily switch into savings instead.
Change your habits and make a few alterations to your routine spending and you’ll easily claw back thousands of pounds that you can put to far better use, inside your ISA instead.
Here’s how to do it:
1. Drop a brand on your weekly shop
The next time you do the weekly shop, try something different. Rather than opting for your usual brand, try a supermarket own-branded item and you’ll save a small fortune. According to comparison site MySupermarket, if you drop a brand level on everything you buy you'll typically cut the cost of your weekly shop by 30%. If you usually spend £100 a week, you could see a saving of as much as £1,560 a year. Even if you only drop half the brands, you could still save up to £780 a year.
2. Switch utilities
If you’re in one of the 700,000 or so households who will find themselves switched onto their supplier’s standard tariff in the first quarter of 2019, as your fixed tariff comes to an end, you could find yourself paying hundreds of pounds a year more than you need to.
If you were automatically moved onto your supplier’s standard tariff in January, and you do nothing about it, your energy costs are estimated to be around £219 more expensive this year.
In January, February and March this year there are 140 fixed energy tariffs coming to an end. Fail to act and your bills will increase. Analysis of the fixed tariffs ending during the first three months of 2019 by comparethemarket.com found that the average increase to energy bills is expected to be £193 per household.
Even if you’re not on a standard tariff, you should still regularly review your costs against competitor firms, because you could still save. It’s simple and saves you money, so what are you waiting for?
3. Claw-back over-payments
Many people now opt to spread their gas and electricity bills by paying a fixed sum by direct debit to their utility supplier. However, new figures show that the majority of these people are in credit on their energy bills, which means they have money sitting dormant in their energy suppliers’ bank account.
Research by Gocompare reveals that millions of homeowners have a positive balance on their utility bills and are owed, on average, £86.60 by their energy supplier. And a quarter have a credit balance of more than £100.
If that’s you, claim back what’s yours and put that money to better use, working for you instead.
4. Ditch your daily caffeine fix
If you’re on auto-pilot every morning and head straight to the coffee shop for your daily caffeine fix, you might want to stop and consider how much you’re spending. It might be the wake-up call you need.
If you’re spending £2.50 a day, three out of five working days a week for around 48 weeks of the year, you’re spending £360 a year on caffeine alone. If you pop to the coffee shop 20 times a month you could be blowing as much as £600 a year.
Invest that £50 a month instead in an ISA and you could have a lump sum of £3,000 after three years, assuming your investment grows by around 5% a year and has charges of around 1%. After 20 years you’d have almost £18,000.
Double that to £100 a month that you invest and you could have almost £36,000 in 20 years’ time.
It really is time to wake up and smell the coffee and put that spending to better use.
5. Turn down the thermostat
Do you ever get the feeling that money is going out of the door? It is, and especially in winter when it’s tempting to turn up the heating and stay wrapped up cosy and warm inside. But simply by turning down your thermostat by one degree you can save money. Money that can be put to far better use.
The Energy Saving Trust says that a typical household can save between £80 and £85 just by turning the heating down by one degree. It’s not a fortune on its own, but it’s money that’s better working for you than going into the pockets of the energy suppliers.
Start small, but start saving now. If you can claw-back all the savings above you’d have £2,545 a year to invest. Money that will give you a better financial future. So what are you waiting for? Get saving and get those savings working for you.
More on ISAs
More on saving regularly
The value of investments and the income from them can go down as well as up, so you may get back less than you invest. Tax treatment depends on individual circumstances and all tax rules may change in the future. This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to an authorised financial adviser.