22 ways to stay ahead of your finances in 2022 – Forbes Advisor UK
With the cost of borrowing on the rise, further increases in in-store energy bills, and lingering uncertainty around the pandemic and its effects on business and travel, 2022 is shaping up to be another difficult year.
But it’s always better to get revenge, before getting angry. So we’ve put together 22 tips for staying ahead of your finances in 2022 and beyond.
22 for 22
1. Compare insurance offers. From January 1, 2022, when you receive a renewal quote for your auto or home insurance, it must not be higher than what the insurer would offer to a new equivalent customer. This is part of a major rule change established by the regulator, the Financial Conduct Authority (FCA). Nevertheless, always check what other providers are offering. There could be a policy from elsewhere that is just as good – but cheaper.
2. Hang on for (more) interest rate hikes. The Bank of England raised interest rates in December to 0.25%. This means that if your mortgage has a tracking rate or your lender’s standard variable rate, your monthly repayment will also increase. Find out what interest rate hikes could mean for your mortgage and how to deal with other hikes with our mortgage calculator.
3. Get travel coverage right from the start. Always purchase travel insurance when booking your vacation in order to have immediate cancellation coverage.
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4. Check Covid Coverage on Travel Insurance. Make sure that any travel policy you purchase will be refunded if you need to cancel for reasons related to Covid. As a starter for 10, head to our list of the best Covid travel insurers.
5. Mobilize your savings. While the rates on fixed-rate savings accounts have risen for six straight months, according to Moneyfacts, if you are in debt, it’s still likely that you’ll pay more interest than you earn on cash in the bank. Consider using your savings to pay off what you owe.
6. File your income tax return. Last Christmas, 31,400 customers filed their tax returns between December 24 and 26, according to figures from HMRC. In fact, while they might not be the most festive activities, the Christmas holidays can present welcome downtime to master the life of an administrator like this. It also means you can be sure to avoid potential fines of £ 100 or more if you miss HMRC’s returns submission and payment deadline of January 31, 2022.
7. Secure a cheap mortgage. Don’t wait until your current mortgage contract expires to book your next one. Mortgage offers from many major lenders are valid for six months with no strings attached.
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8. Avoid unnecessary interest on credit cards. If you accumulated or added a credit card balance in 2021, do not pay interest on it. Transfer the debt to a balance transfer agreement that offers a 0% promotional period. However, you will need a good credit score, while balance transfer fees will generally apply.
9. Keep your credit score intact. Being refused for any type of credit can naturally lead to having to make several requests. These will show up on your credit report, which can deter subsequent lenders and effectively make the problem worse. Using an eligibility checker (which is part of the Forbes Advisor application process) performs an invisible “soft search” against your credit report. It then reveals the probability (expressed as a percentage) of being accepted for, for example, a personal loan or credit card, before making a formal request.
ten. Get a smart meter. Cheap energy does not exist at the moment. In fact, during 2021, many smaller suppliers went bankrupt in the face of soaring wholesale costs. Standard variable fares (which were traditionally best avoided) are now the cheapest option. At least one smart meter makes it easier to monitor your energy consumption. It also sends the data directly to the provider so that you only pay for what you use. You can contact your energy supplier to arrange a free installation.
11. Use the correct card to spend. If you’re planning to purchase a major item in 2022, check out the ever-improving range of shopping credit cards, the best of which offer nearly two years at 0% on new purchases. Note that you will need an excellent credit score to qualify.
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12. Watch out for incentives. If you have a great credit score and are on the hunt for a personal loan or credit card, lenders are tripping over themselves to attract your business. Often this is a free voucher or a “welcome bonus” of reward points. Just be sure to weigh the value of any incentives against the interest rate and other factors in the deal.
13. Cycling. Along with the health and environmental benefits, the financial benefits of choosing to cycle over ride are greater than ever. According to AA data, a liter of unleaded petrol cost on average crippling £ 1.47 in November 2021, while the cost of a liter of diesel was over £ 1.50. And that’s without counting the savings on parking fees. With a decent pushbike costing around £ 400, don’t forget to insure your two wheels.
14. Collect rewards. If you’re a heavy consumer at a particular store or supermarket, find out what loyalty cards or credit cards, if any, it issues. It’s a simple way to accumulate rewards that you can then use for discounts on future spending – what’s to lose?
15. Get life coverage. With our increasingly busy lives, life insurance could be the last on your financial priority list in 2022. But you can buy coverage for as little as £ 10 per month (£ 200,000 of coverage for just one). applicant under the age of 30). Many policies also come with incentives like health related discounts, so compare the options carefully. You can find the amount of coverage you might need with our life insurance calculator.
16. Use budgeting applications. Budgeting apps, such as Snoop, allow you to more closely monitor your spending by consolidating all of your financial accounts in one place. They allow you to set budgets, divide your expenses into categories to identify any potential waste, and “round” expenses to the nearest pound, automatically saving the difference.
17. Overpay… Paying a little more than your mortgage amount each month may not make a huge difference to your disposable income. But, when compounded, even small overpayments reduce the overall interest paid and the term of your loan. Learn more with our guide to mortgage overpayments.
18.… and underpay. Whether it’s searching for discount codes online, tapping into the January sales, or looking for the best deals on your household bills, make it your quest in 2022 to never pay more than what. is absolutely necessary.
19. Prepare for the long haul. If you earn more than £ 10,000 a year, you have probably been affiliated with a government occupational pension scheme. Since April 6, 2019, the total minimum contributions are 8% (5% paid by you and at least 3% by your employer). However, you can increase your contributions up to 100% of your income (up to the annual allowance of £ 40,000 for the current tax year) or £ 3,600, whichever is greater. Putting money in your pension is one of the most tax-efficient ways to save and means more income in retirement.
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20. Improve your broadband. When was the last time you changed your broadband provider? If you can’t remember, there may now be much better speeds available in your area – and maybe even at a cheaper monthly cost. Find out by entering your zip code into our broadband comparison service.
21. Consider switching to SIM card only. If you already own your phone and can live without upgrading to the latest model, SIM-only offers start from £ 5 per month. You can read more about switching to SIM only in our guide.
22. Tackle inflation where you can. In addition to the surge in oil and energy prices, the rise in inflation (5.2% in November as measured by the Consumer Price Index) has been attributed to rising costs of the clothing and food. The next time you’re on the main drag or the supermarket, don’t overlook the charity stores or the discount departments. You can always wash (or freeze) your purchases respectively.