22 ways to get your finances in check for 2022 – including free £125 from taxman

22 ways to get your finances in check for 2022 – including free £125 from taxman

The start of a new year is the perfect time to get your finances in check.

From making the most of your savings, to some easy ways to cut back and make money, we’ve rounded up 22 money tips for 2022.

We’ve also included some important advice on where to get help if your plan for this year is to tackle debt.

It is especially important to give your wallet a refresh if you’ve got a big savings goal in mind for this year – or if 2021 wasn’t so good for you financially.

Here are our 22 money tips:

Review your spending

Go through your bank statements carefully
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If you’re looking to save money, the first step is to know where your cash is already going – and where you can cut back.

Go through your last six months worth of bank statements with a fine-tooth comb and make a note of all your regular payments.

We’ll go through how to cut back on each of your main utility providers and other bills in the steps below.

When going through your bank statements, you should also be able to tell if you’re making a lot of unnecessary purchases that you can cut back on.

For example, if you’re spending a lot on takeaways and coffees, or perhaps if you’re shopping too much.

Cancel direct debits

Going through your bank statements will also allow you to see if you’ve got any direct debits that could be cancelled.

Think of things that you once signed up for but now never use – such as Netflix or Amazon Prime, or even the gym.

Before you cancel, do a quick check of the terms and conditions of your contract with that company just to make sure you won’t incur any exit fees.

Haggle your internet and phone

Haggling is not guaranteed to work but it doesn’t cost anything to try
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If you’re a loyal customer who hasn’t switched their internet or phone provider in a while, then chances are you could save money by switching elsewhere.

Do a quick price comparison using websites such as Uswitch.com or MoneySupermarket.com.

If you do find a better deal, you could then decide to switch if you’re out of contract or won’t incur any exit charges.

But if you’re keen on your current provider, then it could be worth haggling to see if they can lower your costs.

Call up their customer service team and tell them you’ve found a better price elsewhere and see if they can match it.

If they can’t, you could always say you’re thinking of leaving to see if that creates any wiggle room on their end.

Cut your electricity bill

Energy prices are surging and sadly, comparing prices is no longer a way to cut down your gas and electricity bill.

Martin Lewis from MoneySavingExpert has been urging households to “do nothing” as there is nothing meaningfully cheaper than the energy price cap right now.

The energy price cap sets a limit on the rates you pay for each unit of electricity and gas and is what you’ll be rolled on to when your fixed rate deal ends.

But just because it is unlikely that you’ll get a cheaper deal from a provider, that doesn’t mean you can’t cut costs.

The best way to save money on your energy bills right now is to use less energy – that could be by doing simple things like unplugging devices when they’re not in use and making sure lights are switched off when leaving a room.

We’ve got 40 ways to be greener and save cash here.

Slash your water bill

While you can’t switch your energy provider, there are loads of ways to save money on your water bill.

For example, you might benefit from a water meter – depending on how many rooms are in your home.

Martin Lewis says those who have more or the same number of bedrooms in your house than people are the most likely to save money with a water meter.

Other ways to cut down costs is to use less water – this could be as easy as turning taps off when not in use, or reducing your shower time.

Some households can also bag a range of free insulation and water-saving devices through Save Water Save Money.

Lower your mortgage

You might be able to lower your mortgage payments
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Interest rates for millions of homeowners on a tracker mortgage will be more expensive now the Bank of England base rate has gone up.

Those who are on SVRs will have to wait and see if their lender will pass on the rate increase in full or only in part.

But those on a fixed-rate mortgage have a loan with set interest rates that don’t move for a set amount of time.

Mortgage borrowers will need to act fast to lock into a cheap fixed-rate deal – and banks have been slowly increasing their rates since November in anticipation of a rates hike.

Borrowers should use a mortgage comparison to check whether you are on the cheapest deal – we’ve got a guide on how to find the best rates here.

Update your calendar

Go through all your insurance payments and make a note in your diary of when each policy runs out.

This should then remind you of when to start comparing prices so you get the best deal.

Some of the most popular websites to check prices include CompareTheMarket.com, GoCompare.com and Confused.com.

MoneySavingExpert says 23 days before your car insurance is due to expire is the prime time to find the cheapest deals.

For home insurance, you should be checking 21 days before.

Make the most of your money

The Bank of England upped its base rate from 0.1% to 0.25% in December in what should be good news for savers.

While rates on savings accounts have still largely yet to correspond, it is still worth checking if your money is working as hard as it possibly can for you now by checking you’re getting the best interest rates.

The top easy-access savings account right now – where you can withdraw your money whenever you like – is Investec which pays 0.71%.

Virgin Money will pay you 2.02% but only on up to £1,000.

If you can lock your money away for a long period, you’ll generally get better rates compared to easy-access accounts.

The top one-year fix pays 1.36% from Investec, while two-year is 1.6% from Paragon Bank.

Locking your money away for five years will pay you up to 2.1% if you go with Secure Trust Bank.

Check your payslip

Millions of people could be overpaying on income tax because they’re on the wrong code – so check your payslip.

This is especially relevant if you’ve changed jobs or have started claiming benefits in the past year.

If you have one employer and earn under £100,000, your tax code is likely to be 1257L – or S1257L in Scotland and C1257L in Wales.

MoneySavingExpert has a great calculator to help you check your tax code here.

Get £125 back from the taxman

If you’ve worked at home for even one day over the last year because of Covid, then you could be entitled to £125 back from the taxman.

The tax relief for this year is applied directly to your salary, so you won’t receive the money in a cash lump sum unless you’re backdating a payment.

How much tax relief you get also depends on the rate of tax you pay – we’ve got more information on how this works here.

You can backdate your claim for the last four tax years, which run from April to April each year, if you qualified for the circumstances.

Use your ISA allowance

Don’t lose out on your ISA allowance
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An ISA is a type of account where you can save a certain amount of money every year, without having to pay tax on any money they make.

You get a tax-free allowance each tax year for your ISAs and if you don’t use it, you can’t roll it over into the next year.

For the 2021/2022 tax year the ISA allowance is £20,000 and the deadline for using your allowance is April 5, 2022.

Tidy up your credit score

A credit score is basically a way for lenders to tell how good you are at borrowing.

If you’re planning on getting a mortgage this year, or generally speaking in the event of you wanting to take out credit, then it is important yours is up to scratch.

Equifax, Experian and TransUnion are three of the biggest credit referencing agencies in the UK – and you can check your score for each one for free.

If your credit score isn’t looking too great, there are some simple ways to boost it – for example, by paying your bills on time or registering to vote.

Downshift your food shop

Try swapping out branded food to save cash
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The “Downshift Challenge” is where you swap branded goods for cheaper, supermarket-own equivalents – and doing this could save as much as 30% on your shop.

If you spend £100 each week on food, that would be a saving of £30 each week – over 52 weeks, this means you’ll have saved £1,560.

Another way to save cash in the supermarkets is to try cheaper stores such as Aldi and Lidl over more expensive shops like Marks and Spencer and Waitrose.

Stop wasting food

No one likes food waste – and it also hurts your wallet as well as the environment.

If something is nearing its expiry date in your fridge, check if it can be frozen in the freezer – and the same goes for any leftover food you have from a big dinner.

Meal planning is also a great way to avoid buying unnecessary food that could end up being thrown away.

Get cashback when you spend

Cashback sites do what they say on the tin.

You get money back for a qualifying shop when you provide proof of a receipt, and as long as you complete the transaction via their website.

Some of the most popular ones in the UK are Topcashback and Quido.

We’ve reported on loads of cashback success stories including this mum who got herself debt-free by using these sites and making the most of coupons.

Start a savings challenge

Some saving challenge start with just a penny
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Start 2022 by taking on a savings challenge – and see if you can stick it out right the way through to December.

We’ve rounded up three popular savings challenges here.

The first one, the 1p savings challenge, could see you save almost £670.

Or if that doesn’t take your fancy, we explain how the bingo savings challenge works, with the potential for you to save £1,378.

Finally, there is the Monday to Friday challenge – and this one could see you put away £780 if you do it all year.

Sell anything gathering dust

If you were lucky enough to get lots of presents at Christmas, then you might be wondering where you’ll put all your new belongings.

This could be a great time for you to have a clear out and make some extra cash.

Some of the sites where you cans sell your unwanted belongings include eBay, Facebook Marketplace and Etsy.

Be aware of any selling charges that you may incur from selling on some sites.

For example, Depop charges a 10% and eBay takes 12.8% plus a fixed charge of 30p per order and 35p to list an item.

Get free money from your bank

Banks will often offer you money to switch your current account to them – these are known as bank bribes.

For example, customers that are new to HSBC will get £150 for switching, or you can get £130 at First Direct.

Nationwide is giving existing customers £125, or £100 for newbies, while Virgin Money is giving new recruits a gift day experience card of a case of wine worth £150.

For any switch bribe you’re interested in, you’ll need to meet the terms and conditions before you apply – or you won’t get the cash.

This could be that you need to be a completely new customer, or pay in a certain amount of cash within a timeframe.

Check if you can claim benefits

Debt charity Turn2Us estimates seven million families are missing out on unclaimed benefits – but it only takes minutes to check if you can get extra money.

Martin Lewis has also urged half a million people to check if they’re now eligible for Universal Credit after changes were brought in to reduce the taper rate and increase the work allowance.

You can use a free online calculator from the likes of Turn2us, Policy in Practice and entitledto to check your entitlement.

The Mirror also has a free benefits calculator you can use here:

Slash interest on debt

If you have credit card debt, pricey interest rates will likely keep you paying it off for a longer amount of time.

See if you can move the debt you owe over to a 0% interest balance transfer card.

This is where you shift the money owed on one card to a new one that comes with a 0% interest-free period.

At the moment, the longest interest-free period available is up to 35 months from Virgin Money – but depending on how much debt you’ve got, you may not need that long.

You should note that only those with good credit ratings will get the top rates, and you may not always get the advertised rate.

Use an eligibility calculator first to check what you’re likely to be accepted for without damaging your credit score.

And crucially, don’t make any new spends on these cards as you’ll likely start to be charged interest until you pay it off.

Talk to your bank

If you’re struggling after Christmas, talk to your bank and see what help they can offer you.

For example, they may be able to set up a temporary overdraft or pause the interest on your payments for a set amount of time.

Banks have a responsibility to help customers that are struggling.

Get free debt help

Don’t suffer in silence if you’re in debt and really don’t know where to turn – seek free and professional advice.

Always be wary of firms who try to charge you for debt help, as you can get advice without paying a penny.

Speak to one of the following organisations for free:

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