Save your new (and old) pound coins to help beat inflation
The new 12-sided pound coin is worth £3.10 in today’s money, compared with when the £1 coin was first introduced in 1983. So what does this mean for savers?
Savers today will need to put more than three times as much money aside to achieve the same levels of spending power that their counterparts had back in 1983.
Significant increases in the cost of goods and services
A quick check of the Bank of England’s inflation calculator will show that there has been a significant increase in the costs of goods and services. According to the Office of National Statistics, the cost of a loaf of sliced white bread has increased from 38p to £1 and a kilogram of cheddar cheese has risen from £2.55 to £7.19, showing the impact of inflation on the cost of everyday basics.
Bargain-hunting author and blogger Penny Golightly's tips for saving money
- Keep a spending diary
You might be surprised by how much you spend on some items, but keeping a diary will help to highlight key areas in your budget which can be reduced.
- Take part in paid online surveys
This will help you to earn extra cash, while you're watching TV in the evening. Some pay in shopping vouchers, others pay into your bank account or by PayPal. Established research companies include i-Say (used to be called IPSOS) and GlobalTestMarket.
- Remember voucher codes
Whenever you buy anything online, remember to use voucher codes and cashback to save extra money (myvouchercodes.co.uk, vouchercodes.co.uk, hotdeals.com, topcashback.co.uk).
- Delete your credit card details
If you have your credit card details stored with your favourite online shops delete them, and uncheck the 'remember me' box for other payments such as PayPal. This slows you down when you're shopping.
- Try own brands
Try one or two supermarket own-brand versions every time you shop to see if you like them. Most standard supermarket ranges are just as good as the famous names, and their budget ranges can save you even more.
- Cheaper cosmetics are often high-quality
Many designer beauty companies are owned by big businesses that also own cheaper makeup brands, and the season's most fashionable colours and finishes often filter down into the cheaper beauty treats.
Retirement expert Vince Smith-Hughes' tips for making money work harder
- Making use of individual personal allowances
Splitting pension contributions ahead of retirement (ie both having your own pension plan) is often the best way to maximise your individual personal tax allowances when the time comes to access your pension benefits. The combined personal tax allowance for 2017/2018 is £23,000 (£11,500 each) which could be a significant amount of tax-free income for you.
- Salary sacrifice schemes
You give up part of your salary and, in return, your employer gives you a non-cash benefit, such as childcare vouchers, or increased pension contributions. Once you accept a salary sacrifice, your overall pay is lower, so you pay less tax and National Insurance.
- Tracing lost pensions
Cast your mind back to when you paid into pensions in the past, as you could benefit from some significant pots of money that you had clean forgotten about. The Pensions Tracing Service can help you to track down these long-lost pensions.
- Making the most of the Marriage Allowance
If you are married, or in a civil partnership, you may be able to boost your finances with the Marriage Allowance. In total, around 4.2 million married and civil partner couples are eligible for the free tax break.
- Saving outside of a pension
There is a wealth of products available for saving outside of pensions, including ISAs and investment bonds. It is important to also retain emergency funds with instant access for quick withdrawal of those rainy day funds.
- Consulting a professional financial adviser
For many, this will enable you to make your money work harder, whether it's by ensuring that you don't pay a disproportionate amount of tax or simply ensuring that you are investing in the most suitable products.
This is based on our current understanding of HMRC taxation law and practice in the UK which may change.
Download a printer-friendly version of these tips to keep at home – on your fridge or by your computer for when you make online purchases or log in to your internet banking.
The introduction of the new pound coin
The Royal Mint will make over 1.5 billion new pound coins which it has billed as "the most secure coin in the world". The original round pound coin will cease to be legal tender after 15 October 2017.