Simon Healy, Head of Savings at Aldermore, explains: "New Year is traditionally the time when we all resolve to put our lives in order; a principle which applies equally to our finances as it does to our waistlines! There are some very practical and straightforward steps that everyone can take, which will help them gain pounds in less time than it takes them to lose pounds!"
Aldermore's suggest that the following top ten tips should be on every savers New Year's resolution list:
1. Diarise maturity dates- make a note of the dates on which your savings accounts mature, or when introductory bonuses come to an end. Don't assume that your bank or building society will notify you when these dates are approaching, because not all do.
2. Review rates- check the rates you're being paid on your savings accounts. You may no longer be benefiting from the rates you originally signed up to because the introductory period has expired or because the rates are variable and can be changed by the bank or building society. Most financial institutions publish interest rates on their websites; but do make sure you know the precise name and issue number of the account you opened, as many accounts have similar names.
3. Ditch and switch- don't let your savings languish in uncompetitive accounts. If your bank or building society is paying you a derisory rate such as 0.1%, then review what else is available and move your money. This goes for ISAs, as well as ordinary savings accounts.
However, don't become obsessed about getting the absolute highest rate; the rate you get doesn't need to be market leading, as long as it's consistently competitive. For example, the difference between an instant access account paying 2.6% as opposed to 2.8% is just £2 per year on a balance of £1,000. Being able to access an account paying 2.6% via the internet may be more important than that extra £2 you get in interest. However, on £50,000 account, getting an additional 1% will earn you an extra £500 a year - which is worth having!
4. Sort out your paperwork- if, like many people, you have a drawer to which you consign all financial documents, it's a good idea to sort them out. It only takes a couple of minutes to sort them into separate files for each account, but it's time that will be well spent when you need to review your accounts in the future.
5. Increase your ISAs- the maximum amount you can invest in ISAs is increasing in the 2011/12 tax year to £10,680 of which £5,340 can be invested in a cash ISA. So when you take up your new ISA allowance after 6th April 2011, remember that you can invest £480 more than you could in the 2010 tax year (or £240 more in a cash ISA) - tax free!
6. Follow the FSCS compensation limit- at the moment, your savings in an individual UK bank or building society are covered up to the Financial Services Compensation Scheme (FSCS) limit of £50,000. However, the limit will increase on 31st December 2010, following European legislation, to £85,000.
This means you can invest more money in the most competitive savings schemes, secure in the knowledge that your money is safe up to the new FSCS limit. If you have spread your savings across different institutions for this reason it could be a good time to consolidate them, and achieve a better rate too.
7. Be regular- with savings, that is! Make it a New Year's resolution to invest a regular amount into a savings account each month. It doesn't matter if you only invest a few pounds; you'll be surprised how quickly it can develop into a worthwhile nest egg.
8. Lose your loans- if you have any loans, outstanding credit card balances or an outstanding mortgage, think about paying off those balances before you start salting money into savings accounts. However, do make sure you have some savings in a 'rainy day' savings account, just in case you're faced with an unexpected expense.
9. Build a budget- if you really want to get to grips with your money matters, write a budget. It's really easy: simply write down all your income and outgoings. A budget will help you see at a glance just how much you could be putting into a savings account each month - there are even free downloadable budget planners available on the internet (simply search for 'free budget planner').
10. Think long-term- the best savings rates are available if you're willing to commit your money for a few years. Obviously, don't put cash you may need in an emergency into a four-year savings bond, but if you can live without some of your cash for a few years, then consider investing long-term for the best rates.
Information about Aldermore's full range of savings products is available at www.aldermore.co.uk or by phoning 0845 604 2678
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