The cost of living squeeze is going to get tighter this month as millions of households face soaring bills on top of a 1.25 percentage point National Insurance Contributions hike to help pay for health and social care across the UK.
State Pension and other benefits delivered by the Department for Work and Pension (DWP) will be uprated by 3.1% on April 11- but inflation could hit a 40-year high of 8.7% in the fourth quarter of 2022, according to the Office for Budget Responsibility (OBR).
Eight benefits delivered by the Scottish Government will also increase this month, by 6%, to try and help more households mitigate the barrage of increased outgoings on everything from food, streaming TV services, broadband and mobile phone costs and of course, energy bills.
Many money-saving lists are doing the rounds at the moment, some with really good tried and tested tips and tricks to help people reduce their outgoings.
The one below hopefully has something for everyone, whether you’re living on your own or with a family, whatever age you are, and whatever your financial circumstances.
If you have a really good piece of money-saving advice that doesn’t appear on this list, please share it in the comments below or on our Money Saving Scotland Facebook group, so that we can create the ultimate, realistic list of things to do during these really challenging times.
Cost of living crisis cash-saving checklist
Martin Lewis recently shared four things everyone needs to check before the current financial year ends on April 5, or they could be missing out on allowances or refunds.
1. Tax Codes
A tax code is used by an employer or pension provider in order to work out how much Income Tax to take from an individual's pay or pension.
Tax code 1257L will be the most common tax code for the tax year 2021/22 and 2022/23 and is expected to be unchanged until 2026. It replaced tax code 1250L, which was the most popular tax code for the last two tax years (2019/20 and 2020/21).
Martin warned: “Millions of these [tax codes] are wrong every year, but it’s not your employer’s responsibility, it’s not HMRC’s responsibility - it’s your responsibility to check.”
He explained: “If it’s wrong and you’re overpaying then HMRC will owe you money, if it’s wrong and you’re underpaying, you’re going to get a big demand - neither of which are particularly good.”
Martin shared that there are free tools available online to check your tax code and advised people to do it “quickly” and go back to the 2017/18 tax year to see if you are owed any money.
2. Marriage tax Allowance
More than two million couples have already applied for Marriage Tax Allowance since it launched in 2015.
Martin explained how this is a tax break which allows married couples or those in civil partnerships to share their personal tax allowances if one partner earns an income under their Personal Allowance threshold of £12,570, and the other is a starter, basic or intermediate rate taxpayer.
Eligible couples can transfer 10% of their tax-free allowance to their partner, which is £1,250 for 2021/22, and means they could reduce the tax they pay by up to an impressive £252 a year.
It’s backdatable to 2017/18 and could be worth over £1,000.
3. PPI tax rebate
PPI claims may be long gone, but the financial guru explained how many people got a payout that came with 8% statutory interest.
Martin explained: “That extra is taxed as savings and you can reclaim it in the tax year you received the payout.”
To find out how much statutory interest you had added, request a certificate from the firm that paid you back your PPI showing the amount of tax deducted.
To make a claim, fill in the R40 on the GOV.UK website here.
4. Working from home tax allowance
Martin urged everyone who has been asked by their employer to work from home for at least one day during the 2020 lockdown or during the 2021/22 financial year to claim tax relief worth up to £125 from HMRC before April 5 as the rules for claiming working from home tax alliance may change soon.
If you haven’t already claimed for the 2020/21 period, and claim for this financial year it could be worth up to £124.
Check if you’re eligible for the tax break and apply at GOV.UK here.
You can read the full article with Martin’s checklist here.
Below are general tips to try and help you save money.
5. Use free budgeting tools
Get on top of your outgoings so you can cut back on any non-essentials quickly. The Money Helper website has a free budget planner tool here.
Eleanor Williams, a finance expert at Moneyfacts.co.uk said: "Sitting down and having an honest look at monthly finances and making a simple income and expenditure breakdown could reveal some areas where it might be possible to reduce outgoings. There are some free apps that can help with this."
There’s also good old fashioned pen and paper if tech is too fiddly.
6. Go through bank statements
Check to see if there are any subscriptions you could do without, you may need to go back a year to find any annual charges.
7. Make savings on food shopping
This one pops up a lot on money-saving lists and usually involves looking out for yellow stickers and switching to supermarket-own brands, but all you really need to do is plan the week ahead, make shopping lists and stick to your budget - if that means compromising then keep one thing in, but try taking another out.
Store loyalty cards are a must, I’m guilty of saying ‘no’ when asked in my local Lidl, which is my go-to for quality fruit and veg but at a really low price - and there’s no excuse as it comes in app form.
8. Join your local Facebook group
Wherever you live, in Scotland or anywhere else in the UK, your town/city/village/hamlet is bound to have at least one Facebook group.
These can offer a hive of information for activities in the area, but also for products and services available locally - often cheaper and more reliable as they are recommended by word of mouth. It’s also a great way to find local food banks that aren’t on the map yet, or places offering meals for low prices.
9. Look for a better broadband deal
This is easier said than done, but if you've been with your broadband provider for a while, you may be able to get a new deal, especially if you’re nearly out of contract.
Phone and ask, just make sure you check their website first for any new customer deals so that you can quote it to the advisor answering the phone, or talking with you in an online chat.
10. Look for a better mobile phone deal
Much-like the broadband scenario, you can try this with your mobile phone provider too. And if you’re nearly out of contract, have a think about going SIM-only, especially if you work from home more often now and don’t need the massive data package.
If you’re keen to upgrade your handset, shop around and try to get one that comes with an expensive freebie like a games console, headphones or bluetooth devices - if you’re not going to use it, you can always sell it.
If nobody has a good freebie deal, push for the best package at the lowest price.
11. Could you switch to a cheaper mortgage?
Mortgage payments are often a household's biggest monthly outgoing, and some households may find they can save hundreds of pounds a month by moving off their standard variable rate.
12. Cut the cost of debts
Moving debts to a 0% interest balance transfer card could help some people, but check any transfer costs and also make a note of when the interest-free period ends.
13. Get cash to switch current account
NatWest is set to withdraw its £150 free cash offer on April 7 while Nationwide is offering switchers up to £125 and first direct is offering £150 to switch.
Switching takes just seven working days and all your money is protected, so if you’re not that fussed about who you bank with it’s a quick way to make some money.
The team at MoneySavingExpert.com regularly update the website with the latest switching offers - find out more here.
14. Get £20 just for opening a first direct account
Pretty much what it says on the tin, and you don’t need to switch, just open an account and log into the first direct app or online banking service within three months of opening the account. The £20 is paid within four months.
15. Council Tax discount or reduction
Council Tax is paid in 10 or 12 equal monthly instalments to your local council, however, there are a number of ways to reduce the cost of this annual bill.
These include:
- If you live alone
- If you are disabled
- If you live with someone under 18 or a student
- If you are a carer
- If there are major changes to the value of your home
In most cases, reductions in your Council Tax bill could be backdated, so don’t delay making an enquiry - find out more here.
16. TV Licence discount or refund
TV Licence rules changed this year which means everyone pays for it, including those on State Pension. The only way to avoid the £159 fee is to be aged over 75 and in receipt of Pension Credit.
People who are registered blind are entitled to a half price TV Licence and may be eligible for a refund. When someone with a severe sight impairment applies for a TV Licence they are required to submit evidence of their disability - a blind registration letter is the most common form - and from that TV Licensing may identify an overpayment, especially if you’ve been paying by direct debit, and issue a refund.
Benefits
Most people will instantly assume they are not eligible for benefits, but this is usually because they do not understand what’s out there, how to go about claiming, or think it will be too much hassle.
But, many people are probably missing out on a crucial source of extra income. Below are a few to consider.
17. Personal Independence Payment (PIP)
Who can claim: People over 16 and under State Pension age
How much it’s worth: Between £94.80 and £608.60 every four weeks
What is it: A benefit delivered by the Department for Work and Pensions (DWP) to people with a long-term illness, disability or physical or mental health condition - including an ever-growing range of hidden conditions and long-term Covid.
PIP is non-means tested, tax-free and available to those in and out of work, it can also be claimed on top of other benefits as it is not affected by the benefits cap.
Find out more here.
18. Disability Living Allowance (DLA) / Child Disability Payment (Scotland only)
Who can claim: Children under 16
How much it’s worth: Between £94.80 and £608.60 every four weeks
What is it: DLA claimants in Scotland have moved from DWP to the new devolved benefit, Child Disability Payment being delivered by Social Security Scotland.
Both benefits pay the same rates and have the same eligibility criteria for PIP.
Find out more about DLA here and Child Disability Payment here.
19. Best Start Foods
Who can claim: If you or your partner are getting certain benefits or Tax Credits, or you or your partner are pregnant, or are the main person looking after a baby or child who's the right age for a payment.
How much it’s worth: The payment is worth £18 during pregnancy and for any children between one and three-years-old. It is £36 for children under the age of one.
What is it: A benefit paid by Social Security Scotland every four weeks on a pre-paid card to buy healthy food including eggs, milk, fruit and vegetables.
20. Best Start Grants
Who can claim: Parents and carers on low incomes.
What is it and how much is it worth: It is made up of three separate payments - the Pregnancy and Baby Payment is - a one-off payment of £606 for a first child or £303 for a second or later child. The Early Learning Payment is a one-off payment of £252.50 if your child is between 2 and 3 1/2 years old. The School Age Payment is a one-off payment of £252.50.
You cannot get Best Start Grant or Best Start Foods if you only get Child Benefit - you must still be getting one of the benefits or payments from this list to be able to get Best Start Grant or Best Start Foods.
Find out more here.
21. Attendance Allowance
Who can claim: People over State Pension age.
How much it's worth: You will be paid either £240 or £358.40 every four weeks.
What is it: A benefit delivered by the DWP that helps with extra costs if you have a disability severe enough that you need someone to help look after you. It can also help you stay independent in your own home longer.
Find out more about claiming Attendance Allowance here.
22. Carer’s Allowance
Who can claim: People who spend at least 35 hours a week caring for someone.
How much it's worth: £270 every four weeks. In Scotland there are also two additional payments of £231.40 each year as part of the Carer’s Allowance Supplement.
What is it: A benefit for people who help someone with washing and cooking, taking them to appointments or helping with household tasks such as managing bills and shopping.
Find out more about Carer’s Allowance and the supplement here.
23. Pension Credit
Who can claim: People claiming State Pension.
How much it's worth: The figure is determined by a number of factors, including savings, but is potentially worth up to £3,000 per year.
What is it: A benefit delivered by the DWP for older people to help with the costs of retirement. Kt includes additional discounts including a free TV Licence for those over 75 (worth £159), Council Tax Reduction (worth £1,000 to £2,000 per year), Want Homes Discount (worth £140) and more.
Find out more about Pension Credit here.
24. Benefits Calculators
These are a quick and easy way to identify any benefits you may be entitled to claim.
They are independent and completely confidential, all you have to do is enter personal and financial details about your current circumstances.
Find out more about benefits calculators here.
25. Get help if you are struggling
If you cannot afford to keep up repayments on a mortgage or loan, speak to your lender as soon as possible.
If you are sinking into problem debt, or worried about doing so, consider getting help from a non-profit charity such as StepChange, Citizens Advice, the Money Advice Trust or Christians Against Poverty.
All of these charities actively encourage everyone to get in touch for free and confidential advice.
To keep up to date with the cost of living crisis, join our Money Saving Scotland Facebook group here, follow Record Money on Twitter here, or subscribe to our twice weekly newsletter here.
