Falling real wages don’t have to mean pain
THANKS to inflation of 4.7 per cent, most workers will probably see cuts in the real purchasing power of their salaries in 2011. But there is no reason for that to cut into your living standards. Here are some easy New Year’s resolutions to follow that will help you endure austerity Britain without feeling too pinched.
1 DON’T BUY THINGS YOU DON’T USE
This one may seem obvious, but it is astonishing how much it is ignored –
we keep spending money on things we just don’t need. In fact, according to research from Crunch.co.uk, the average Brit wastes an impressive £1,213 a year on goods and services that they then don’t use.
Unsurprisingly, gym subscriptions and sports equipment are the most pointless of purchases, accounting for £461 of the total wasted. So if your New Year’s resolution is to get fit, ask yourself whether you’re really committed to it before paying a hefty joining jee.
If gym membership is non-negotiable, those surveyed also admitted to spending £100 a year on food not eaten, £70 a year on clothes never worn and £110 a year on gadgets never used. A little thought about whether purchases are actually a good idea can save you a lot.
2 SWITCH PRODUCTS TO SAVE MONEY
Many companies make their money by exploiting existing customers but offering enticing deals to attract new ones. Don’t be a sucker. According to research from Gocompare.com, over 12m people have never switched any one of the 20 most common financial products, from car insurance to bank accounts, meaning that 12m people are probably paying too much money for everything from gas to car insurance.
Switching energy provider or insurance providers can save hundreds of pounds a year – according to Gocompare, the average saving from switching car insurance provider is £296 while the average saving from switching energy provider is £442. If you switch your current account, you could even earn money. First Direct is
offering new customers £100 just for signing up,
3 USE YOUR TAX ALLOWANCES
And when you’ve saved that money, you will want to make sure you put it away in a rational way. With VAT having jumped up this week, the government is taking even more of your money – but you don’t have to give them any more than necessary. According to research from Fidelity, 42 per cent of people will miss out on tax free investment returns by not using their annual ISA allowance. If you’re saving money, you should be sure to make the most of your allowance.
Up to £10,200 can be saved this tax year in stocks and shares in an ISA wrapper, or £5,100 in cash.