With the new year upon us, it’s a good time to review your finances and make sure your money is working hard enough for you. With that in mind, we’ve put together our top 7 New Year Money Tips – our first in the series focuses on making the most of your cash savings.
The current personal savings allowance means that every basic-rate taxpayer can earn £1,000 a year in savings interest before paying any tax on it, although that’s reduced to £500 a year for higher rate taxpayers. But in reality, with current rates as low as they are, how much interest are you likely to make from your savings? An article published in The Guardian last year, points to recent research that shows a staggering £173bn of savers’ cash is sitting in accounts that pay no interest at all. And that’s up sharply from £18.5bn a decade ago. Maybe it’s time to shop around for a better deal?
Safe and sound?
It’s also worth making sure that your savings are protected. If your bank or building society were to go under, you would be covered under the Financial Services Compensation Scheme, but only up to a maximum of £85,000. And that limit stays the same even if you have more than one account with the same bank. While you may want to be loyal to your bank, it might make sense to spread some of your savings around.
Look out for our next New Year Money Tip tomorrow. It’s all about reducing your household bills.
Disclaimer: This article does not constitute financial or other professional advice. You should consult a professional adviser if you require financial advice.