What actions can you take to secure your finances as petrol, electricity, and food bills soar?

Matt Goddard, chartered financial planner from Smith & Pinching Financial Services in Norwich, shares 12 steps you can take to help you deal with the cost-of-living crisis and inflation.

1. Check your tax code

Most people receive their code through the post and assume it's correct. However, it’s worth contacting HMRC to make sure your employment details are up to date. It could be possible that you’re entitled to a refund.

2. Speak to your mortgage lender about a cheaper deal

Your mortgage lender may find you a better deal, allowing you to pay lower rates. They can discuss your options so you may be able to reduce your monthly mortgage repayments.

3. Use a budget planner

There are lots of free budget planner tools available online that will allow you to track your monthly income and spending. This can help you spot areas where you could save more money. We can also assess your finances and provide bespoke advice on ways you could save.

4. Shop around for cheaper insurance and broadband

You never know what deals are out there, which is why it's a good idea to use comparison sites to see if switching providers could help you save on things like insurance, broadband and TV packages. It's quick and simple to do and can save you a lot of money in the long run.

5. Transfer income to a spouse or partner

If you are married or in a civil partnership, one of you can transfer up to £1,260 of your Personal Allowance (the amount of income you do not have to pay tax on in the 2022-23 tax year) to the other to help minimise tax.

Eastern Daily Press: Use free online comparison sites and budget planners to help you find ways to save.Use free online comparison sites and budget planners to help you find ways to save. (Image: Getty Images/iStockphoto)

6. Change who owns the assets

To save tax, you could transfer ownership of assets to your spouse if they are a lower rate taxpayer, provided this is a genuine transfer of beneficial ownership. Some tax rates change depending on income, so disposing of assets that are in the name of the lower earner could be cheaper.

7. Use salary sacrifice to contribute to your employer’s pension scheme

If you can use salary sacrifice, your salary will reduce by the amount of your contribution, and your employer may agree to pay this into your pension, together with their own contribution. Because you are effectively earning less, both you and your employer pay lower National Insurance contributions, which means two things. Firstly, your take-home pay might increase; secondly, your employer can elect to increase your overall pension contribution by adding part or all their NIC saving to it.

8. Use interest rates to help you save

A basic rate tax-payer can earn up to £1,000 interest before needing to pay tax. A high-rate earner can earn up to £500 tax-free interest. Look at what interest rates currently apply to your financial accounts. It may be worth considering switching products to help you save more. We can help you discover what financial products will best suit you.

9. Invest to help increase your spending power

You can earn up to £2,000 of dividend income tax-free - this is the amount of profit made from stocks and shares you’ve invested in. Analyse what investments you have and consult a finance professional to make sure you’re utilising them in the best way.

10. Make use of your ISA allowance

You can place up to £20,000 every tax year into an ISA. ISAs are income and capital gains tax-free, and depending on what type of assets you’re holding, may also be inheritance tax-free. Of course, what returns you earn depends on how well the fund performs. We can offer guidance to help you understand and manage your investments.

11. Plan ahead to reduce inheritance tax

Inheritance tax (IHT) can be a costly affair, but pre-planning can help you save and maximise the amount passed onto your beneficiaries. You may choose to pass along assets using gifts or use the IHT nil rate band to reduce tax.

We can help you devise a plan for your estate that will enable you to live comfortably and still provide an income for future generations.

12. Consult a financial adviser

With living costs rising, it’s vital to ensure your money is working as smart and as hard as it can.

Financial planning pays for itself in the long run, and it’s about far more than simply saving money. For over 40 years, we’ve been providing professional advice and helping local families build financial plans, tailored to suit their lifestyle, budget and routine. In these worrying times, we’re here to remind you that you’re not alone and to help you find peace of mind.

Smith & Pinching provides independent, local and trusted financial services. They have offices in Norwich, Lowestoft and Eaton.

For more money saving tips, visit smith-pinching.co.uk/news/money-saving-tips.

Call 01603 789966 or email enquiries@smith-pinching.co.uk.