Beat the VAT rise and pick up your big ticket items now

As outlined in the emergency budget earlier this year, which was delivered by the Chancellor of the Exchequer, George Osborne, VAT is set to increase from the start of next year, rising from 17.5 percent to 20 percent, as the coalition government strives to make more money to clear the huge public deficit.

This will come as bad news for the many cash strapped consumers who are already struggling to make ends meet, because it means that price on many things will soar even further. This is why many people are now rushing to make their purchases in the few weeks that they have left prior to the rate of VAT increasing.

The items that many people are rushing to buy include big ticket items such as electrical items like televisions, fridge freezers, washing machines, and the like. Many are also rushing to book holidays before the prices go up, as the effect of even a small 2.5 percent increase on the cost of more expensive items can make a big difference.

Bearing in mind that VAT is set to increase by 2.5 percent at the start of the year it is a good idea to determine whether you are going to be making any big ticket purchases in the early part of next year, and then bringing the purchase forward if possible. This could save you the cost of the additional 2.5 percent, which on higher priced items can make a difference.

If you time it right you could get a bargain on your big ticket items. Directly after Christmas the price of many items is slashed by retailers, and the VAT increase is not set to come in until the start of January. This means that if you purchase your items between Christmas and New Yearn you could benefit from the lower prices from the sale, and you can avoid the VAT hike, which means that you could get a bargain.

In order to make the biggest savings plan you sales shopping, and try and work out which retailers are holding sales between Christmas and New Year so that you can plan your sales shopping accordingly. You should also consider planning ahead, and if you are considering anything such as booking a holiday make the booking early to avoid the VAT increase so that you pay less for your holiday.

Tags: increase, cash strapped consumers, New Year's Day, chancellor of the exchequer, budget

Using comparison sites for insurance

The cost of home insurance and vehicle insurance can be very high these days, and for the many households that are already struggling to make ends meet financially it can be difficult to afford these rising costs. At the same time having this sort of insurance in place is important to ensure that the home or vehicle is protected, and of course in the case of vehicle insurance it is a legal requirement.

The rising cost of insurance has resulted in an increase in the number of people looking to switch their cover to another provider in order to reduce costs, and this has resulted in a myriad of insurance related price comparison sites springing up over the past couple of years. These sites can often provide consumers with ease, convenience, choice, and speed when it comes to switching their insurance cover.

So, just how effective are these price comparison sites? In actual fact they can be highly effective in helping consumers to find low cost insurance deals that suit their needs and reduce costs, and they are very easy and simple to use. Consumers are able to compare a wide range of insurance options all under one virtual roof with a price comparison site, and the process is quick, simple, and convenient.

In order to use these comparison sites consumers simply need to enter details of their insurance needs and some personal details onto the website, and this will then bring up a list of potentially suitable and affordable insurance plans and providers. The consumer can then simply compare the costs and features of the policies and decide which one best suits their needs and their budget. This enables the consumer to arrange a new insurance policy quickly and easily, and to browse the options and compare with minimal hassle.

However, there are also a couple of things to bear in mind when considering using these comparison sites to cut insurance costs. First of all not all insurance providers are available through comparison sites, so you need to bear in mind that you might still find a cheaper deal directly through an insurance company rather than through the comparison site, as these deals may be available through an insurance provider than does not operate through comparison sites.

Also, remember that there are now many comparison sites in operation, and it is worth checking at least a couple of sites before you make any commitment in order to ensure that you get the best possible deal.

Tags: insurance deals, budget, low cost insurance deals, suit, suits, price

First time buyers fail to budget effectively

A recent report has indicated that many first time buyers fail to budget properly before they make the move into their new home, and often receive a shock when they realise that they outgoings are going to be far higher than they initially anticipated.

Many first time buyers are budgeting for things such as deposits, mortgage repayments, and shopping, but are failing to get prices for essentials such as utilities, insurance cover, and the like. In addition, many fail to account for costs such as petrol and general spending money when they are working out affordability, and this can come as a shock when they actually move in to the property and start paying out.

Buyers that are moving into a property for the first time and are therefore unaccustomed to the services they will need and the cost of these services are advised to seek advice prior to accepting any mortgage offer, otherwise they could find themselves in a property with a mortgage but may not be able to afford to live there.

Common things such as monthly or weekly shopping, home insurance cover, television licence, utilities, broadband or Internet costs, mobile phone usage costs, and general day to day spending money are amongst the things that many first time buyers fail to budget for when working out whether they can actually afford to buy and live in their own property.

One first time buyer who purchased a property last year said that it was a shock over the first month or so as she realised how many things she hadn’t budgeted for before moving in.

She said: “I’ve had to change my lifestyle completely because of the amount that I am actually paying out compared to the amount I had budgeted for. I wish I’d spent more time working out my budget rather than rushing to buy a property.”

Tags: mortgage, budget, first time buyer, costs, Mortgage loan, finance

Recession could lead to rise in burglaries

A rise in burglaries over the Christmas and New Year period is something that concerns most of us. Many burglars decide to step up the pace over the festive season because this is the time when people tend to have more expensive items in their homes, such as gifts purchased for others or gifts received from others. It is also a time when many people are out of their homes visiting relatives and friends or socialising, giving thieves more opportunity to carry out burglaries. Read more

Tags: growth, opportunity, burglary, recent reports, insurance coverage, phone call, budget, recession

People using credit to ‘patch holes in their budgets’

With financial conditions worsening under the current credit crunch, people are increasingly turning to credit to make up any shortfalls in their budgets, Fool.co.uk has said.

David Kuo, head of personal finance at Fool.co.uk, also said that credit fraud is likely to increase as people struggle to cover their living expenses.

People are increasingly seeing their personal finances being stretched as they face bigger outgoings due to rising household expenses. At the same time, salaries have not risen fast enough to cover the increased costs, Mr Kuo said.

Capital Economics recently reported that average earnings growth is set to remain at just under four per cent a year while food inflation is expected to stay at six per cent over the coming months.

“Initially it just starts with [people] saving a little less money…the next step is [people] start raiding [their] savings in order to try and cover [their] outgoings. The third step is [people] have to use credit in order to try and patch up any holes in [their] budget,” commented Mr Kuo.

Tags: Household, economics, order, budget, fool, Simple Dollar, food

Up to five out of six UK consumers fear for their finances

Up to 30 per cent of British spenders do not think they can cope much longer when it comes to managing the pressures surrounding their finances, according to new research.

Findings from a survey conducted by moneysupermarket.com during the budget week reveal that only 84 per cent of those questioned said they had no financial worries.

Additional research showed that Brits owe more than £1.3 trillion on loans, credit cards and overdrafts.

Tim Moss, head of loans and debt at moneysupermarket.com, said he was surprised by the levels of financial worry among UK consumers.

“There is little doubt many Brits will find their annual road tax as high as the value of their car as from next year, creating a massive headache for people who are really struggling,” he continued.

Moneysupermarket.com added that those spenders who are worried about their spending habits should take action rather than burying their head in the sand.

The firm recently said that consumers are becoming increasingly aware of having a good credit rating with more and more checking their financial status.

Tags: loan, GBP, budget, research, sand, new research, com, credit rating

Long-term fixed rate mortgages risky because of life uncertainty

Buyers tempted to take out a long-term fixed rate mortgage after chancellor Alistair Darling indicated in this week’s budget that action might be taken in future to promote them should be on their guard.

A number of experts have warned that the certainty that Mr Darling pointed to as the benefit of opting for a mortgage with the interest rate fixed for ten years or more is precisely what is missing.

“Uncertainty is the key deterrent,” Andrew Haggar of Moneyfacts told the Daily Telegraph, pointing to the unpredictability of life circumstances over such a long period of time.

“While borrowers can insure against unemployment and illness, people are still wary of tying themselves to a fixed rate for an extended period of time.”

Nici Audhlam-Gardiner, director of mortgages at Abbey, agreed.

“So much can happen in a quarter of a century, both to a customer’s circumstances and to the economy. While these very long term deals may be suitable to provide long-term stability for a small number of customers – they will not be suitable for all,” she said.

Tags: long period, Telegraph, interest rate, extended period, Business Finance

Consumers switch mortgages to save money

Nearly 1.4 million consumers have switched their mortgage provider in order to secure a better deal, one financial expert has claimed.

Research from MoneyExpert.com has revealed that an estimated three per cent of the adult population has changed mortgage supplier since June last year, a figure which is thought to represent 11 per cent of all UK mortgage holders.

Sean Gardner, chief executive of MoneyExpert.com, said: “The uncertain financial climate of the past six months has forced many people to reassess their household budget with the mortgage top of the list of priorities.”

He added that swapping mortgage supplier will cost more with rising application fees and most are now uncapped, meaning you’re likely to pay a proportion of the total amount you borrow

People aged 35 to 44 are the most likely to have switched mortgage provider, while people living in the South of England are least likely to have done so.

Meanwhile, further research from MoneyExpert.com revealed that four out of five consumers are overpaying for financial products.

Tags: mortgage supplier, household budget, Consumers switch mortgages, order, list, cent, budget

Christmas costs falling

The real cost of Christmas is falling steadily after taking inflation into account.

According to recent research by Halifax Unsecured Personal Loans, the price of the UK’s favourite gifts has continued to fall.

The study found that the price of games and toys has fallen most in the last year, dropping by six per cent, with woolly jumpers and socks falling in price by four per cent.

Indeed, in the past decade, the price of toys has gone down in real terms by 45 per cent, with spirits down by 26 per cent and brussel sprouts by 18 per cent.

“Our research shows that the cost of traditional Christmas favourites has actually fallen – good news for Christmas shoppers.

“However, just because the real price of items such as toys, CDs and Christmas cake has fallen, doesn’t mean we don’t need to budget and organize our finances.”

Halifax states that Christmas is as good a time as any to sort out finances, adding that it should not need to take up more time than decoration a Christmas tree.

Tags: price, uk, cent, christmas cake, Christmas lights, Agriculture and Forestry, Unsecured Personal Loans, budget

Holidays put Brits in debt

Millions of Brits are happy to put themselves in debt in order to go on holiday.

New research shows that as many as 12 million people borrow money in order to take a break abroad and they end up paying for it well after returning.

CreditExpert.co.uk, an online credit monitoring service, carried out research which found that credit cards, loans and overdrafts are the most popular ways of getting together the money for a trip.

Shockingly, six per cent of respondents admitted to going into debt most or every time they go on holiday, with 18 per cent believing that an annual holiday is so important that they do not think about the money until they return.

Once on holiday things do not get any better, with 22 per cent revealing that they lose track of how much they are spending.

“It’s worrying that, as a nation, many of us have a ‘me now, debt later’ attitude to our finances. Most of us work hard and need a well-earned break, but it’s important that we plan ahead and ensure our bank balance can handle the large outgoings that holidays and other expenses entail,” said Jim Hodgkins, managing director at CreditExpert.co.uk.

“Keeping a budget for the cost of the vacation as well as day-to-day holiday expenses will help you avoid going into debt.

“Missed credit repayments are likely to have a negative impact on your credit report, which means lenders may not want to offer you credit in future,” he added.

People aged between 25 and 34 are most likely to lose track of their holiday spending and 37 per cent say that this is the cause of their debt.

Tags: CreditExpert.co.uk, budget, order, money, online, vacation, bank, CreditExpert

Stamp duty is “big financial barrier”

The tax man is expected to reap the rewards of Gordon Brown’s final Budget with an additional £1.4 billion expected to enter his coffers as a result of stamp duty alone.

It comes as the Chancellor failed to raise stamp duty thresholds despite the average house price soaring in recent years.

The higher thresholds have been in place since 1997 yet in that time the average house price has rocketed by 175 per cent.

It means that more and more people are now expected to pay the tax, with first-time buyers being hit hardest as they struggle to get a mortgage and take their first steps onto the property ladder.

Homebuyers are required to pay one per cent stamp duty on a property which costs up to £125,000, three per cent for a £250,000 property and four per cent for one valued at £500,000.

The problem is that an estimated 3.5 million homes in England and Wales are now valued at more than £250,000.

“Stamp duty should be indexed in line with house prices and inflation,” said the Council of Mortgage Lenders’ Christopher Dean. “It is a big financial barrier.”

The Treasury has admitted that two fifths of homebuyers in the country will now be required to pay stamp duty.

Tags: tax, 000, house, Herald Sun, Victoria, finance, budget, treasury

Brits demand stamp duty changes

The majority of Brits want to see Gordon Brown change the stamp duty bands to bring them in line with current house prices.

A poll, carried out by GE Money Lending, has found that 71 per cent of us want Mr Brown to announce changes during the upcoming Budget statement.

Many people, 32 per cent of those asked, believe that the stamp duty exclusion band, which currently includes homes costing less than £125,000, should be increased to regional average prices.

However, one in four people accept that this is unlikely to happen and simply want Mr Brown to link the exemption band to house price increases moving forward.

Although most Brits are unified when it comes to increasing the stamp duty exemption band, we are more divided when it comes to helping first-time buyers to get onto the property ladder.

A majority 58 per cent want the Chancellor to increase the stamp duty exemption band for first-time buyers only and most want to see them given help in one way or another.

In contrast, 38 per cent believe that helping first-time buyers too much is unfair on those who have already paid.

“What is… interesting is the polarised levels of empathy consumers have when it comes to the plight of first time buyers,” commented Duncan Berry, director of mortgage sales at GE Money Lending.

“It is important that lenders continue to understand the difficulties faced by this group, developing new and innovative ways of helping them to get onto the housing ladder.”

If you are a first-time buyer who is looking to take out a mortgage make sure you shop around to find the best deal for you.

Tags: shop, is… interesting, budget, polarised levels, Budget statement.Many people, time