Money-saving tips for 2024
This content is for information purposes only and should not be taken as financial advice. Every effort has been made to ensure the information is correct and up-to-date at the time of writing. For personalised and regulated advice regarding your situation, please consult an independent financial adviser here at Castlegate in Grantham, Lincolnshire or other local offices.
Prices rose sharply in 2023 across the economy. Inflation stood at 10.4% in February last year, although the figure had fallen to around 4% by December. This compares to 4% in France and 3.8% in Germany, although it still hangs above the Eurozone average (2.9%) and US inflation rate (2.5%).
Looking ahead, the Bank of England (BoE) expects prices to fall later in 2024 – trying to achieve its 2% target by 2025. Meanwhile, many households are still wondering how to manage the rising cost of living in the UK. Below, our Grantham financial advisers offer some money-saving ideas for the months ahead in light of recent developments in the economy and markets.
We hope these insights are helpful to you. To discuss your own family financial plan with us, please get in touch to arrange a no-obligation financial consultation, at our expense:
01476 855 585
info@casfin.co.uk
Car insurance
The cost of insuring a car is expected to rise considerably this year. The Financial Conduct Authority (FCA) stated that prices have already gone up by 21% on average since June 2022. Young divers and electric vehicle owners are especially hard hit, with many of the latter encountering renewal quotes 60% higher than before – sometimes £5,000 or more.
Over-65s are also being hit hardest by premium rises. So, apart from ditching the car or declaring it “SORN”, what can you do? One idea is to time your renewal correctly. One expert suggests getting a quote 21 days before the renewal date.
Consider paying annually rather than monthly and check if you can add a “responsible driver” to your policy. Avoid “auto-renewing” on your existing policy (existing customers are often charged more) and make sure you are registered on the Electoral Roll before taking out a quote.
Broadband and mobile
Prices for this category of spending are set to rise by 7.9% this year as firms pass on rising business costs and inflation to customers. For those who are out of contract, remember that you are not required to stay with your provider. It may be possible to save by switching.
One idea is to double-check the connection speed that you really need. Standard speeds are often fine for many people and are typically cheaper than fast/super-fast fibre-optic broadband. You could also try haggling with your current provider if you do not want to switch.
Keep a close eye on your payments as some firms hike prices mid-contract (e.g. in line with an inflation measure like the CPI or RPI).
Savings
With the UK base rate currently at 5.25% it is possible to get better savings rates compared to previous years. The Bank of England (BoE) is not expected to raise the base rate again (although it could happen!). As such, early 2024 could be the ideal time to review your savings strategy – shopping around to see if there are better deals.
Smaller competitors often offer better rates than large high-street banks. Just be careful to consider accessibility when putting away savings (i.e. how much can you safely “lock inside” a fixed-rate deal for 2 or more years without a big risk of needing the money?).
Also, be mindful of your Personal Savings Allowance. Higher interest from savings is very welcome, but you do not want to receive an unexpected tax bill. In 2023-24, a Basic Rate taxpayer can earn up to £1,000 from interest each tax year. For a Higher Rate taxpayer, the tax-free limit is £500.
Speak with your financial adviser to ensure that your savings strategy aligns optimally with your tax-saving strategy. Some ideas to consider include using a Cash ISA and/or Premium Bonds.
Energy
The UK’s energy regulator, Ofgem, announced a hike in the price cap on 1 January 2024 – pushing it up from £1,834 to £1,928 per year. How this affects you will depend on your usage since the cap applies to unit rates (not your total charge).
A few competitive fixed-rate deals are starting to appear on the market. However, if you are considering switching, make sure to compare the unit rates to the new energy cap. Remember that the price cap is set to change again in April 2024. Some analysts are predicting that prices could fall by as much as 16% in the second quarter.
The April price cap is expected to be announced by Ofgem at 7am on Friday 23 February. However, be mindful that a return to pre-pandemic energy bills is unlikely.
Invitation
There are many other ways that households could save on costs in 2024 such as switching up their grocery shop, taking advantage of cashback offers and claiming tax relief (e.g. as a self-employed person). For investors, make sure you also take time to review the charges you are paying. A financial adviser could help you optimise your portfolio for cost-efficiency.
If you are interested in discussing your own financial plan or investment strategy with us, please get in touch to arrange a no-commitment financial consultation at our expense:
01476 855 585
info@casfin.co.uk
