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Top financial resolutions if you want a prosperous new year


A year of political chaos, continued low interest rates, mushrooming online fraud, a weak pound and collapsing travel companies has meant that 2019 was 12 months that many will want to forget. As Brexit dominated the political agenda, there appeared to be little time for anything else from the government.

But will 2020 be any different, and will promises in the Queen’s speech that there will be an end to no-fault evictions, and no rises in VAT, income tax and national insurance, be borne out?

Here is our guide to what to look out for next year when preparing your 2020 budget.

Don’t miss the tax deadline

Some things will remain the same every year and the deadline for tax returns is one of them. The last day for online returns for the 2018-19 tax year is still 31 January. Failing to file your return or not paying what you owe on time will result in penalty fees and interest charges. But still people fail to pay on time, sometimes with excuses which may not be born in truth – “my mother-in-law is a witch and put a curse on me” and “I’m too short to reach the postbox” among them. So get the job out of the way as soon as possible, ensure that you are taking advantage of all of the tax reliefs that are available, such as for expenses – and also ensure that you declare all of your income.

Watch out for currency shifts

While 2019 was the year that Brexit dominated the political agenda, it was in British holidaymakers’ pockets that its effect was truly felt. The pound has plummeted against both the euro and the dollar since 2016. While there may have been some rises after the Conservative election victory, they were soon followed by declines when new Brexit plans were announced. And these ups and downs don’t hide the fact that winter holidays on the French slopes and the annual summer break in Spain have got a lot more expensive for households. So how to make the most out of weak sterling? Transfer your money in advance, getting the best rates online using comparison engines such as that run by MoneySavingExpert, and avoid at all cost changing money when you are in the airport. Avoid ATM charges by using a card which does not charge for foreign exchange fees or other charges when withdrawing money abroad, such as Starling or Monzo (within a £200 limit outside the European Economic Area).

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Shop around for savings deals

Interest rates have been at or near record lows for the last decade and there are now suggestions that next year will see a drop of 0.25% after two members of the Bank of England’s monetary policy committee last month called for a cut. This will be bad news for savers as the banks will inevitably pass on the reduction and products with the best earning potential may disappear from the market. Ensure you shop around for the best current account rates – they vary widely – and don’t limit it to the high street banks: look at what the new generation of challenger banks can offer. For those who want to hedge their bets, putting some money into easy-access accounts and the rest into fixed-rate bonds will allow at least some money to garner higher rates.

Boxing day shoppers in London. If you’ve spent too much over the festive period, it’s time to take stock.



Boxing day shoppers in London. If you’ve spent too much over the festive period, it’s time to take stock. Photograph: Vickie Flores/EPA

Take stock to avoid debt

The excesses of Christmas spending are too often followed by credit card debt to be dealt with in January. A quiet month for many, it is a good time to take stock of how you spend and how you can make your money work better for you.

The first rule of credit card debt is to try to pay more than the minimum amount and act sooner rather than later if you feel things are getting on top of you. Organisations such as National Debtline, Citizens Advice, the Debt Advice Foundation, StepChange and PayPlan are all available to help if things do get out of control.

Make your mobile work for you

Managing your mobile is made a lot simpler by splitting the cost of your coverage and the actual price of the phone. Bundled deals, where the phone and the plan come together, typically result in consumers paying more as they are essentially taking out a loan to pay for the handset. Using an interest-free credit card to buy the phone is a better idea, and then couple that with a sim-only deal. Ofcom, the communications regulator, has called for mobile companies to be banned from selling locked handsets, which cannot be used with other sim cards unless they are unlocked – a significant reason among many for not switching their mobile deal. Those looking for better deals on their contract should especially focus on the Easter period, when operators have been known to offer good value.

Fingers crossed for the budget

It is widely expected that the chancellor will unveil a budget in February focused on non-Brexit-related matters. It is anticipated that election pledges such as funding 50,000 more nurses for the NHS and increasing the national insurance payment threshold will form some of the key announcements. There has been pressure on the Conservatives to set out plans for social care, for which they have pledged to allocate an additional £1bn a year. In the Queen’s speech, there were commitments not to raise the rate of VAT or income tax, while a renter’s reform bill offers to give tenants more security by removing “no-fault” evictions.

Look for energy bill deals

The energy price cap, which came into effect at the beginning of this year, will be reviewed in April. The price cap is for those who are on the standard variable tariff, the most basic packages offered by the energy companies. The cap limits the price a supplier can charge per kilowatt hour of electricity and gas used. It serves as a timely reminder that householders should always look around for a better deal, as they can typically save by switching their energy supplier. Under the current price cap, a home which uses a typical amount of energy on a standard tariff pays £1,179 a year.



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