Valentine’s Day ….
It’s Valentine’s Day on Saturday (make sure you’re aware of this if you’re planning a meal out with some mates or you could be surrounded by couples eating heart-shaped steaks and drinking pink fizz!). So, being a cynical journalist and not an old romantic, here are my decidedly practical tips if you’re thinking of moving in with your partner or getting married:
- Make sure you talk about money before you move in together or get married. You don’t need to agree about everything, but you need to know what each other thinks money is for (mainly spending; mainly saving) and how you will tackle areas you don’t agree on.
- Work out how you will split your bills. It’s particularly important if you earn different amounts. In that case it may make more sense to split the costs unevenly.
- Be open about your debts. If you have secret debts it’s harder to face up to the problem (it’s always easier to clear debts with support of your partner or family). If you get behind with your debt repayments, it could affect your own credit record and, if you have joint credit with your partner, his or hers as well.
Car insurance costs driven down (sorry!)
Car insurance costs an average of £420 according to one price comparison site, after premiums fell by over 5% in one month. It’s the biggest monthly fall in premiums for around a year, so it could be a good time to switch if your policy is up for renewal and your current insurer isn’t competitive.
Here are my 5 tips on keeping your insurance costs down:
- Choose your car carefully. One of the main factors affecting premiums is the make and model of car you drive. Check how much it will cost to insure before you buy a car.
- Consider telematics or ‘black box’ insurance if you’re a young driver. It’s a gadget that tracks your mileage and how you drive and (sometimes) when you drive. If you’re a good driver you should pay less.
- Don’t have accidents! Some accidents can’t be avoided, but sometimes they happen because we’re not paying attention, we’re driving too fast or are too close to the car in front. The basics of good driving will help preserve your no-claims bonus – a reduction in the premium for not making a claim.
- Compare insurance deals on at least two price comparison sites and a specialist car insurance broker. Some insurers do exclusive deals with particular sites.
- Watch your mileage. You mustn’t lie about the mileage you do, but be realistic about the cover you need. It may be more expensive to insure yourself if, for example, you say you do 12,000 miles a year when you only do 9,000.
Mortgages down to 1.2%
Last month I mentioned that you could get a fixed rate mortgage charging less than 3% for ten years. Well, now a bit of a price war has broken out over two year fixed rate mortgages. As I write this, the cheapest headline two year fixed rate mortgage is 1.19%, although it comes with some pretty hefty fees. It’s also only available to you if you have a deposit of 40% of the purchase price or have 40% equity in the property.
It’s not the only competitive deal out there, so if you’re worried about interest rates rising or you just want to lock into a fixed rate deal, it may be worth talking to a mortgage broker about your options.
Buying cheaper than renting
Assuming you can get a mortgage, buying is cheaper than renting, according to a new survey. The buying versus renting review says that buying a property is 10% cheaper than renting it. It found the average monthly buying cost (including mortgage payments) for a first time buyer purchasing a three-bedroom house was £658 at the end of 2014. This was £62 (or 9%) less than the amount you’d pay in rent on a three-bedroom property.
Tap and pay for up to £30
If you’re a fan of contactless cards where you can just tap your card onto a card reader, there’s good news. At the moment you can only use your card to pay for purchases up to £20, but from September this will increase to £30.
Paying by contactless is much quicker than using an ordinary chip and PIN card because you don’t have to type in your PIN. Having said that, you’ll normally be asked to type in your PIN every so often when you’re using a contactless card, as an extra security measure.
SAVVY TIP: If you’re paying for your travel in London using your contactless card, make sure you use the same card for both parts of your journey, otherwise you may be charged twice and will have to get a refund.
Aged 55 or over? Get a state pension statement
If you’re aged 55 or over you’ll be able to get a state pension statement from the government, which will give you an estimate of how much state pension you might get when you retire.
The state pension system is changing for those reaching state pension age from April 2016 and, instead of getting a full basic pension of around £113 a week and possibly a second state pension if you are employed, there will be one state pension worth around £148 a week in today’s money. But, it’s not necessarily a better deal because you have to pay National Insurance for 35 years (or been credited with NI if, for example, you were bringing up your children or caring for a relative) compared to the current level of 30 years.
You can get a state pension statement free of charge on the GOV.UK website or Nidirect.gov.uk if you’re in Northern Ireland.