11 simple ways to save nearly £6,000 before Christmas 2020 and recession proof your financesAugust 19, 2020
MILLIONS of people have lost jobs or suffered wage cuts as a result of the coronavirus pandemic so we round-up ten simple ways to save almost £6,000 before Christmas.
It comes as more than 9million people have been furloughed and we enter what's expected to be the largest recession on record.
Thankfully there are ways of making it work even when job opportunities are scarce though.
From saving money to sorting finances, we’ve come up with 11 tips to help you claw back the pounds.
Follow our advice – which encompasses everything from examining your bills to making the most out of your spare room – and you could be sitting on £5,775.28 by the time Christmas 2020 comes around.
Here's what you need to know.
On your bike – Save: £800
If you're looking to save money, ditch the car or public transport and cycle instead if you can.
Anyone in England who has a bicycle in need of repair can apply for a £50 voucher from the government to get it fixed.
Don't own a bike? Walk wherever possible. Walking not only saves forking out on fuel and public transport, it's also better for your health.
Leave the car, which costs an average of £200 per month to fill-up, at home and you could save £800 come the end of the year.
What is a payment holiday and should you apply for one?
PAYMENT holidays are when a lender agrees to pause your monthly repayments for a set amount of time.
This has to be agreed in advance, so don't stop making your repayments until your bank has given you permission to do so.
The majority of lenders are now offering payment holidays, so get in touch with your bank to find out what help it can give you.
Most of the time, it'll require you to fill out an online form.
Typically, payment holidays are offered in extreme circumstances and are designed as an emergency measure to help you through a difficult financial time.
If you think you need to take one, you should speak to your lender to discuss your options – but do note that the break in payments doesn’t remove any debt or financial obligations.
Most lenders will also still charge interest during this time, so be aware that these costs will keep building up.
You should also always continue to make your normal payments if you’re financially able to.
Sue Anderson, head of media at debt charity StepChange, said: “If you can continue to make your normal payments without difficulty, then you should.
“Any temporary measures being offered by lenders don’t remove financial obligations – they are designed as an emergency measure to help you get through a period where your income may have taken a serious knock.
“However, if you need to use them then you shouldn’t hesitate to talk to your lenders."
While taking a payment holiday shouldn't affect your credit score, research from MoneySavingExpert has revealed it could still stop you getting a mortgage.
This is because many lenders rely on more than just your credit score when considering whether or not to give you a loan, such as Open Banking.
Lenders can then see whether you've paused any payments, which they can then use this information to decide whether or not they will lend to you.
Banks and lenders have been asked to extend the time customers have to ask for a payment break until the end of October.
However, it's best to get in contact as soon as possible if you're worried about your finances.
Homeowners have until October 31, 2020, to apply for a mortgage holiday.
Cancel subscriptions you don’t need – Save: £347.88
An easy way to keep your wallet well-stocked is by cancelling monthly subscriptions such as Sky, Spotify, Netflix, Amazon Prime and iCloud storage, as well as meal subscription boxes such as Mindful Chef and HelloFresh.
Have a look at your credit card bill and ask yourself if you really use all the services you are forking out for.
A standard Netflix subscription costs £8.99 per month while a Sky 'Ultimate TV package will set you back £25 per month and a HelloFresh habit costs you £45.99 for three recipes each week, for four people.
Add in Apple charging you £6.99 a month for iCloud storage and it's easy to spend a grand total of £86.97 per month, or £347.88 by Christmas, on unnecessary subscriptions.
Eliminating these expenses doesn’t have to be permanent either – Netflix, for example, allows customers to pause their subscriptions – but it could free up some much-need cash.
Ditch and switch utility bills – Save: £300
Make price comparison sites – easily found via a search engine – your new best friend.
Don't get stuck paying more than you should. Instead shop online for a better deal on everything from broadband and energy suppliers to your mobile phone bill, household insurance, car insurance and bank accounts.
MoneySavingExpert.com's Cheap Energy Club will even let you set up an email reminder that alerts you when cheaper deals become available.
The cheapest tariffs are usually fixed deals – meaning you guarantee how much you’ll pay for a set amount of time, usually 12 months.
The amount you pay varies depending on where you live and how much energy you use but, as a rough guide, switching to a cheaper supplier could cut your bill by up to £300 a year.
Move bank account – Save: £100
It's not just utility bills you can switch but bank accounts too.
Case in point? Halifax is paying customers who switch to or open its Reward Current Account or Ultimate Reward Current Account, £100 directly into their bank account.
It's the only bank to offer a switching incentive since coronavirus hit.
The Halifax Rewards account is available to new and existing customers. To open an account, customers must pay in £1,500 each month or pay £3 per month for the account.
As well as the £100 offer, customers can choose a monthly reward – either £5 cash, a Vue cinema ticket, three digital magazines or two digital movie rentals.
On top this, you can earn up to 15% cashback with selected retailers.
The Halifax Ultimate Rewards account costs £17 a month but also includestravel insurance,car breakdown cover, mobile phone insurance, card cancellation and home emergency cover and card cancellation.
Martin Turner, head of personal current accounts at Halifax said: “Both our new Reward and Ultimate Reward accounts come with the opportunity to earn a fantastic lifestyle benefit.
“The switching process takes just seven days and customers will receive their £100 before the switch is complete.”
Tempted to make the move? Be quick. The £100 payment deal ends on September 14, 2020.
What to do if you can't pay your bills
FALLING behind on your energy bills can be extremely stressful.
If you’re struggling to pay what you owe, contact your supplier as soon as possible.
Your provider has to help you come up with a solution, and you should be able to negotiate a deal that works for you both.
One option is to agree a payment plan where you pay off your debts in affordable instalments.
You may be able to pay off your debts directly from your benefits through the Fuel Direct Scheme.
A fixed amount will automatically be taken to cover what you owe plus your usage.
To be eligible, you must be getting one of the following benefits:
- Income-based jobseeker’s allowance
- Income support
- income-related employment and support allowance
- Pension credit
- Universal Credit (but only if you’re not working)
If you cannot come to an agreement with your supplier, they may try to force you to get a prepayment meter installed.
In very rare cases, where you refuse to negotiate, your supplier might threaten you with disconnection.
Chase refunds – Save: £75
Were you charged for a service you were unable to use or an event you couldn’t make during lockdown?
Perhaps it was a National Trust pass, a gym membership, cinema subscription, football season ticket, train ticket, theatre tickets, a sporting occasion or holiday abroad.
Know your rights: if you weren’t able to use the products or services during quarantine, you’re fully entitled to a refund so claim it.
As an example, I received a refund of £75 from Watford Football Club for the remainder of my 2019-20 season ticket, when the decision was made to complete the season behind closed doors.
Anyone having trouble retrieving their money can contact the Competition and Markets Authority.
That said, if the firm is struggling and your finances are robust, consider taking vouchers instead – it could just stop yet another company from collapsing and even more people from losing their jobs.
Check your benefits – save: £1,639.20
If you’re struggling to cope, you could be entitled to financial support from the government but you’ll need to claim it – no one is going to come knocking at your door.
Those out of work, unable to work or on a low income could qualify for Universal Credit.
A single person aged 25 and above would be entitled to receive £409.80 each month or £1,639.20 by the end of the year
Elsewhere, millions of self-employed people whose livelihoods have been affected by coronavirus since July 14, can now claim a second grant payment of up to £6,570 from the government.
However, the newly self- employed and PAYE freelancers are excluded.
Council tax support is also available so, if you’re struggling to stay afloat, talk to your local authority.
Transfer your work online – save: £240
Stuck for work? Why not see if you make some money from delivering your skills virtually.
Redundant tutors, personal trainers, yoga teachers, make-up artists and more might be able to make some spare cash by teaching via Zoom or Skype.
Someone who teaches four classes a month for £15 an hour, could easily net £240 by the time Christmas rolls around.
Plug your services on social media and platforms such as Nextdoor, as well as Airtasker – a digital marketplace that connects people and businesses with members of the local community who are able to complete tasks to earn some extra money.
Just check for any sign-up fees involved before deciding which platform to use.
Sell unwanted items – save: £200
The coronavirus lockdown led to a national spring clean of epic proportions – we’ve all been having a big Covid clear out, decluttering our cupboards and wardrobes while hunkered down at home.
If, post purge, you’re staring at a pile of stuff that – to paraphrase Marie Kondo – no longer “sparks joy” get rid of it (and make some money) on sites such as eBay, Shpock and Gumtree.
By sticking your unwanted clothes, furniture, toys and techs on the aforementioned sites and making an average of £50 per month, you could be £200 richer by January 2021.
Just check for any listing fees before deciding which sales site to use.
What you need for a return?
HERE's what to remember when taking your items back to the store:
- Have proof of purchase: If you want a refund most shops will ask for proof of purchase, but it doesn't necessarily have to be a receipt. It could be any other official record, such as a bank or credit card statement. If you're buying for your loved ones, ask for a gift receipt so they can exchange it if it's not suitable.
- Take the card you paid with: This is particularly important if you want a refund as it's often credited to the debit or credit card you paid with.
- Keep the original packaging: Even if you've removed the item from the packaging, it's always worth taking it along. With some items, such as tech, retailers may refuse a refund if the seal or packaging has been broken.
- Take it back as soon as possible: Within 30 days of purchase you're usually entitled to a refund but after that you'll probably only be able to get an exchange or part refund
- Check the store's policy: Stores have different policies so check beforehand to make you're sure entitled to a refund.
Return items on time – save: £30
Guilty of going on an online spending spree during the pandemic? We hear you.
But if your financial situation has changed since your retail therapy session, don’t forget to return those huge piles of parcels.
If that £30 top you can live without was bought online, you have 14 days to return it for a full refund.
If the item is faulty or not as described when sold, you can get a full refund within 30 days. Check your rights on Citizen Advice's site.
Cut your tax bill – save £43.20
If you’ve been working from home over the past few months, chances are you may have saved money on travel costs and lunches but your electricity bills will have rocketed.
Some employers give their staff an allowance to cover these costs.
But if they don’t, employees can still claim a small reduction in their taxes for the time they were forced to work from home.
HM Revenue and Customs (HMRC) lets you claim up to £6 a week of expenses without having to provide bills or paperwork to justify it.
That doesn't mean you save £6 a week – you only save the tax you would have paid on it.
This works out as £1.20 a week for a basic rate taxpayer, or £2.40 a weekfor a higher rate taxpayer, meaning those who have been working from home since the end of March could save a minimum of £43.20 by December 31, 2020.
However you must be working at home because you have to, not out of choice.
There are two ways to make the tax claim expenses – either on your annual tax return, if you file one, or on a special form called a P87, which is available electronically via Government Gateway, or on paper.
Rent out your spare room – save: £2,000
Got an extra bedroom? People pay storage facilities around £50 to £100 per month to stash their stuff, so why not let them store it with you instead.
For a bigger cash injection, rent out your spare room – sign up to the government’s Rent a Room scheme which allows you to earn up to £7,500 a year tax-free or £3,750 if you’re letting jointly.
Renting out a spare room for £500 per month means your bank balance would be £2,000 healthier come Christmas.
Alternatively, if you don’t want the hassle of living with a full-time lodger, what about renting out the room via Airbnb?
The accommodation firm reopened in the UK on July 4 and is a great way to make a bit of extra income on your terms – although you'll need to be ready to wash sheets and towels and hand over keys.
UK hosts on Airbnb can earn up to £7,500 tax free from renting a spare room or their whole home. The threshold is halved if you share the income with your partner or someone else.
The Sun has also revealed how you can save £5,200 to pay for next year’s holiday with the 52-week money saving challenge.
Plus, here's how to apply for free grants of up to £10,000 if you’ve recently lost your job.
It comes as unemployment is expected to jump to 7.5% – equal to 2.6million people – by the end of the year, according to The Bank of England.
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