Get more from your money in 2011
New Year's money resolutions can be easily forgotten but you could buck the trend in 2011.
This means its time for an honest self analysis. What are your spending habits like? Does all your money seem to go on bills and other expenses? Are you spending more than you make?
Analysts are predicting a difficult 2011 as the UK continues to struggle with economic recovery. With that being said, there are money-related resolutions we can’t afford to break.
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Banking
There is, however, some good news for savers. As of 6 January savers' protection has increased to £85,000 from £50,000. This means that if your bank or building society goes bust the Government-backed Financial Service Compensation scheme promises to pay out the first £85,000 for each account holder per regulated financial institution. This brings the UK in line with the 100,000 EU cap.
Santander has reinstated its £100 cashback offer on its Preferred In-Credit Rate Account. With this account you could benefit from an impressive 5% AER within the first 12 months.
In order to get the £100 cashback you will need to pay in a minimum of £1,000 per month and will need to set up a direct debit within the first 11 weeks of opening the account.
First Direct is offering you £100 to open an account and an additional £100 if you close it after six months and within the initial 12 months. The £100 opening bonus is rewarded to customers who deposit £1,500 per month into the account for the first three months.
The Cooperative Bank’s Privilege Premier Account claims to offer £800 worth of free benefits which include travel insurance, breakdown cover, mobile phone insurance and an interest free £300 overdraft facility.
Beware this offer is only available until 15 January after which there will be a £13 monthly subscription charge to hold the account.
Dealing with debt
If you are repaying multiple debts, you may be paying over the odds in interest and have the additional hassle of dealing with numerous creditors. Consolidating your debt with one loan or a balance transfer card could be a valuable solution.
Barclaycard has positioned itself as a market leader by offering 17 months on balance transfers – the longest interest free period on the market. If you registered now you wouldn't have to pay any interest until spring 2012 giving you plenty of time to pay off your debts.
The card carries a 2.9% balance transfer fee but you will receive a £20 discount if you transfer more than £3,000 before 31 January.
Activity in the loans market in recent weeks has sparked a rate war as lenders have been dropping rates to attract borrowers struggling with debt.
At the end of last year Sainsbury’s topped the best buy tables with the market leading rate of 7.4% APR. However, Alliance & Leicester and Santander have since beat that with a 7.2% APR.
The rate applies to loans between £7,500 and £14,950 and is fixed over the lifetime of the loan with no arrangement fees.
Explore mortgage options
If you are in a relatively stable financial position and have managed to put a decent amount into your savings, 2011 could be the right time to boost the equity in your home or get onto the property ladder.
With the bulk of economists forecasting a rise in interest rates this year, cautious homeowners might want to consider a fixed rate mortgage for two, three or five years.
Conversely, Halifax has offered a life line to potential first time buyers with a new two-year, fee free, fixed rate mortgage at 5.79%. The lender claims first time buyers will save £1,986 on initial costs.
Typically first time buyers will pay a product fee of around £1,000, valuation fees, conveyancing costs and other fees associated with the mortgage.
Protection
The New Year is often a time to reassess your financial plans and the consideration of life insurance and other forms of protection should not be left out. It may be particularly prudent this year as analysts are predicting 2011 will be quite tricky as the UK struggles with economic recovery.
It is worth considering if you have adequate cover to ensure you are protected from the financial consequences of long-term illness, injury or your untimely passing. This will give you peace of mind knowing that your family or loved ones will not face financial insecurity.
**This material is for information purposes only and should not be considered financial advice. We strongly encourage our readers not to rely solely on this content, but to seek independent advice when making financial decisions.**
Loans - FAILING TO ADHERE TO REPAYMENT TERMS MAY RESULT IN PENALTY CHARGES AND AFFECT YOUR CREDIT HISTORY. THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME.YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT. Rates may depend on your individual circumstances
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