Getting the best from your money in 2024

Getting the best from your money in 2024

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It’s important to keep an eye on how you are spending your money and to make the most of any allowances.  I spotted a Money Tips article in Which? Money and I’ve chosen 10 of their tips that I think you will find useful.

1. Review your savings

Now is a good time to consider locking some cash away in a fixed-rate account to take advantage of higher interest rates.

The Bank of England has held the base rate at 5.25%.

With rates having risen so steeply over the past year, more savers are exceeding the limit for how much interest they can earn tax-free. The annual personal savings allowance is £1,000 for basic-rate taxpayers and £5000 for higher-rate taxpayers.

You can’t carry your £20,000 Isa allowance forward, so if you have any allowance remaining, consider using it now before the start of the upcoming tax year.

2. Complete your tax return asap

Tax is usually deducted automatically from your wages or pension. However, if you receive any other income such as from self-employment, capital gains or dividends outside an Isa – you need to report this to HMRC by sending a tax return.

If you haven’t yet submitted your return for 2022-23, you’ll need to get organised: if you miss the 31 January deadline, you’ll face a fine of at least £100. There are very few excuses HMRC will accept – they include a life-threatening illness or the recent death of a partner.

Make the process easier by gathering the relevant documents and information beforehand – such as invoices and records of any relevant expenses.

If you’re submitting a tax return for the first time, you’ll need to register with HMRC and set up a Government Gateway account to get your Unique Taxpayer Reference (a 10-digit number). You can then log in to your account to fill out your tax return online.

3. Check your credit report

Your credit report is like your financial CV: lenders consult it whenever you apply for a loan, credit card or mortgagee.

Even if you’re not applying for credit, it’s worth checking your credit report to make sure the information is correct. Not only will this allow you to pick up on any mistakes that could reduce your chances of getting the best credit deals in future, but you’ll also be able to spot if any fraudulent applications have been made in your name.

4. Update or complete your will

Making a will guarantees that your estate will be shared with your loved ones in line with your wishes after your death.

But you’ll also need to review it every few years to make sure it reflects any change of circumstances.

Not only could an out of date will mean that your wishes aren’t carried out, but it could also create unnecessary family conflict.

While it’s possible to write a will yourself, it’s generally better to seek help from a professional unless your circumstances are very straightforward.

5. Make money at home

If you’re planning a new year clear-out, consider selling items on second-hand marketplaces such as Depop, eBay or Vinted. Thanks to the ‘trading allowance’ you can make up to £1,000 a year tax-free from doing this.

This allowance also covers other ways of making money from your home – for example, renting out your driveway or garage on sites such as JustPark and YourParkingSpace to drivers searching for a cheaper or guaranteed parking spot. You can register your space free of charge, and earn anything from £50 to £800 a month.

6. Switch your bank account

Switching your current account provider takes just seven working days and can quickly pay off. Some banks pay an upfront cash bonus for your business – £175 from First Direct and £200 from Nationwide.

Just make sure the account you choose matches your needs, whether it offers cashback on your spending or comes with an interest-free overdraft.

7. Gift money

Gifting money during your lifetime is a great way to reduce or eliminate the inheritance tax bill your heirs face when they inherit your estate.

Main allowance: each year you’re allowed to give up to £3,000 worth of gifts tax-free, split between however many people you like.

8. Car insurance

Check comparison sites to see what prices competitors are offering, quote these to your current provider and tell it you’re willing to go elsewhere, unless it matches or betters a competitor’s offer.

Who’s paying what?

Here are the groups that reported paying some of the highest and lowest premiums.

 

 

Price paid by majority a

 

Group

Annual payers

Monthly payers b

% that saw price increase (significant increase)

 

 

 

 

·  London

£450+

£960+

52% (15%)

·  Age 18-24

£550+

£720+

41% (6%)

·  Two claims

£450+

£720+

48% (14%)

·  All drivers

£350+

£480+

60% (15%)

·  Wales

£300+

£240+

62% (16%)

·  Age 65+

£300+

£240+

67% (19%)

·  No claims

£300+

£240+

62% (15%)

 

Source: In September 2023, Which?Money surveyed 1,992 car insurance customers. a The majority of drivers in each group were paying above this amount for their cover b Amount paid across the year.

Tips re haggling

Do your research

Review comparison sites.

Phone up

Admiral let on that ‘if our customers contact us at renewal because they’ve received a cheaper quote elsewhere or are unhappy with their initial renewal offer, we will check to see if there is any discount that can be applied to keep the customer with us’.

Be polite

Ask the insurer to explain the premium increase, ask if can do better and describe any better deals you’ve found elsewhere.

Say that you’re considering leaving

Insurers’ cancellation departments can sometimes offer reductions to retain your business – even of you’ve been refused discussions beforehand when haggling.

Pay-monthly car cover even pricier

With car insurance premiums soaring, more customers are choosing to pay monthly rather than upfront. Yet new sales data, shared by comparison website GoCompare, shows that the spreading payments is getting more expensive.

One alternative is to pay for cover annually with an interest-free credit card, and pay off a 12th off the card’s balance each month.

The big five insurers – Admiral, Aviva, Direct Line, Hastings Direct and LV – all accept payment by credit card.

9. Update your pensions

If you’re yet to retire and are in line for a pay rise or bonus this year, think about using this extra money to boost your pension contributions.

If you’re reluctant to increase regular contributions, consider an ad-hoc payment – according to calculations by Standard Life, one-off pension contributions of £1,000 every five years could boost your pot by £23,000 in retirement.

10. Take advantage of capital gains tax allowance

If you have any investments outside of an Isa make use of the capital gains tax (CGT) allowance before it decreases.  It is £6k at mo but this reduces to £3k from 6/4/24.

There are lots of things you can do to maximise your money and be more tax efficient so its worth taking the time to plan.

Anna Goodwin @2024 All Rights Reserved.

www.annagoodwinaccountancy.co.uk