If you snooze, you lose (money, that is)

Ever worked out the cash cost of simple laziness? You could be frittering away a sizeable chunk of your income every year just by not taking a few simple steps. Here are some of the best reasons why you should wake up and smell the money.

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Off the top of your head, how much interest does your savings account pay you? Now call up your bank (or log in) and check. If the figures still match, that’s great news. But maybe you got a disappointing shock.

We all know the trick, yet still we fall for it. They offer you a tasty rate of interest to hook you in, and then after a year or two it drops to almost nothing. You might even realise this when you open the account – but then you forget to switch, or you’re just too busy to bother. According to research by the Fairbanking Foundation, around 3.78 million savers are languishing in low-interest accounts after falling for introductory rates. Of these, nearly half had forgotten to move, and 20 per cent simply didn’t realise the rate had dropped.pig-896747_1280

Failing to keep your savings alive in high-interest accounts could be costing you hundreds of pounds a year. And (let’s be honest) it’s all down to Can’t-Be-Bothered Syndrome. Here are some more ways in which apathy and laziness are like additional stealth taxes on your finances.

Your mortgagehouse-161041_1280

Spooky, isn’t it? Just as your savings account’s interest rate goes down, the interest rate on your mortgage goes up. Around three million borrowers are making the unforgivable error of letting their mortgage revert to the lender’s standard variable rate (SVR) instead of remortgaging to get a better deal. Equally, you might just have got a poor deal by not shopping around. You can book a free mortgage review to see how much you could be saving.

Utilities (gas, electricity, water etc)manhole-cover-294510_1280

It’s very easy to end up paying too much on your utility bills. For instance, if you work full time you may not be around to allow meter readings at your home, which means the companies have to estimate your usage of gas, electricity and perhaps water. It’s in their interests to err on the high side; it’s in your interests to put them straight. And make it a resolution every New Year to shop around for better deals – there’s usually one out there.

Protectionarmor-158430_1280

A price comparison site can show you the cheapest deals for insurance and protection – but what it can’t tell you is which types of protection make most economic sense for you. For instance, many people have been mis-sold payment protection insurance (PPI) without ever asking the question, ‘Is there a better option?’ For example, one income protection policy may be far more economical than several different PPI policies, and do far more. By talking to an IFA you can work out how to get the best value from your protection, with plans tailored to your needs.

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This year an estimated £4.6 billion has been wasted by UK taxpayers, according to research by unbiased.co.uk. It’s not just a failure to save enough into ISAs and pensions – many people are on the wrong tax code without knowing it, many others fail to recover overpaid tax on pensions, and the recent boom in buy-to-let means a lot more people are having a rude awakening to capital gains tax. If you are self-employed or have income from multiple sources, an accountant is a must-have investment. Failing to plan properly for inheritance tax is another major source of tax waste. (See our Inheritance Tax Primer Pack for more information).

Making a Willdiploma-152024_1280

Probably the grand-daddy of all financial apathy (sometimes literally). Last year nearly 30 million adults in the UK admitted to having no Will in place, potentially causing no end of additional stress for their nearest and dearest (and at the most difficult of times). The law will not necessarily ‘sort things out’ as you would wish, and even in the best-case scenario it will take a lot longer to distribute your estate than if you’d simply made a Will. Most people who die intestate (without a Will) do so simply because they never got round to it, or planned to do it ‘later’. But a couple of hundred pounds spent now could save your family far more money and hassle in the future, and even reduce or eliminate their inheritance tax bill. Talk to a solicitor today about making a Will.

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