With the weather turning, I think all of us are starting to see the other side of lockdown – gone are the afternoons in the garden and the rays of sunshine streaming through the windows, and here are the days of confinement inside; let’s hope the sun returns before too long!
There is one silver lining behind the very literal clouds though – it provides another opportunity to get your house in order, and do the things you’ve been putting off for ages.
With that in mind, I thought I’d just share some pointers on some of the ‘financial stuff’ you could and should be doing while you’ve got some downtime, to put yourself in the best position, and keep as much of your hard earned money as possible:
Your utilities
Utilities are the sort of thing we take for granted, paying our bills each month, and spending little time shopping around.
But with all of us spending a lot more time at home right now, there’s a good chance that you’re using more of your utilities than you were before:
More electricity consumed, more Internet used, and now – with the temperature reducing – more heating needed.
Now’s the time to make sure you’re getting the very best price, and not paying more than necessary.
Millions of UK citizens are now on default energy tariffs, having finished a fixed-rate deal, and if that’s you, you’re almost certainly overpaying right now.
Similarly, many of the internet service providers tempt you in with an introductory discount for 12-18 months, and then escalate the price, and if you haven’t been keeping an eye on your bill, that may have happened to you.
In both cases, take some time to shop around and look at price comparison sites – this will help you reduce the amount you’re forking out each month.
Your premiums
Insurance premiums are another form of payment that we don’t think much about, but if you haven’t looked at your premiums recently, there’s a good chance you’re overpaying, so make sure you do a full audit of what’s going out, work out whether it’s needed and shop around for the best deal.
When it comes to car insurance, there’s a bit more you can do in this current situation.
Clearly, most of us are using our cars a lot less, but if you’re one of the many who isn’t using yours at all, and that situation is likely to be the case for the next few weeks at least, it could be worth getting a Statutory Off-Road Notification (SORN) from the DVLA and parking it off the road.
When you do that, you can cancel your car insurance and vehicle tax payments – if paying monthly – or claim a refund if you pay annually.
Your assets
This is a bit more of a niche piece of financial housekeeping, but for the people it’s relevant for, it’s hugely important:
If you were given a legacy of property or shares in the year before the crash caused by the coronavirus, then you need to ensure you’re talking to HMRC about the Inheritance Tax Bill.
Long story short – assets are given a value in the IHT bill, but that’s a projected value.
So, say you inherited a house that – according to the IHT bill – is worth £500,000, then you’ll have paid a portion of Inheritance Tax on it, relative to its projected value.
However, if you then sell the house for £400,000, as a result of a plunge in property prices, then you’ll have overpaid the tax, since you’ll have been taxed on the value, rather than the actual money received.
The good news is that if you sold/sell the property within 12 months of the individual’s death, you’ll be due a refund to cover the difference in tax you paid.
It’s complicated, but if this affects you, get in touch and I’ll be happy to help.