Month: August 2023

How to spend less on looking good…

Clothes can be one of our biggest outgoings, even if you wouldn’t exactly call yourself a fashionista.

You need day-to-day wear for home and work, formal clothes for events and occasions, going out outfits, utility wear, holiday clothes…the list goes on.

At the same time, clothes are a vital way of expressing ourselves, showcasing our personalities, creating our identities and boosting our confidence.

But being ready for every occasion and feeling good at the same time doesn’t always come cheap, particularly if you’re also buying clothes for growing children.

So what can you do to cut the cost of this basic essential, at a time when prices seem to be rising across the board?

Buy pre-loved clothes
We’re in a world where many people go through clothes at an alarming rate, often to keep up with the latest trends and because they refuse to be seen in the same outfit twice, both in real life and on social media.

But this trend of buying and disposing of clothes so regularly and on such a massive scale has led to huge concerns about the fashion industry’s environmental impact.

As consumers become more conscious of their own carbon footprints, many are now actively looking to source clothes in a more sustainable way, such as by buying second-hand clothes.

Purchasing pre-loved items can tick multiple boxes for environmentally conscious and hard-pressed shoppers.

Firstly, it reduces the level of demand for new clothing production, and therefore means there’s less waste and pollution.

Secondly, it can be extremely affordable, with even designer goods often available at knockdown prices.

And finally, buying pre-loved clothes allows people to express their own unique style, rather than conform to the trends dictated by big brands in the shops.

Where can I buy pre-loved clothes?
Scouring your local charity shops is a great way to find some stylish and affordable bargain clothes, and support a good cause at the same time.

If you thought charity shops were full of old-fashioned, dowdy and worn-out clothes, then think again, as many will be full of exciting options for people of all ages.

Of course, you can never be sure exactly what you’ll find when you start looking through the clothes racks, so it’s worth being patient in your search to find the right items for you.

Spending time browsing can also open your eyes to items that you might not ordinarily consider. What’s more, since charity shop clothes are so affordable, you’ll have a bit more freedom to experiment with different styles and mix things up a little.

Online marketplaces such as Vinted, Depop and eBay can also be a treasure trove for anyone searching for great clothes at low prices.

Simply set up an account and you can then search for the items you want to see. You can also use filters to narrow down your options even further, and then easily make a purchase.

Many of the items listed on apps such as Vinted will be as good as new, maybe even still with their shop tags on, yet on sale at ridiculously low prices, so it’s a really affordable way to refresh your wardrobe.

Declutter your wardrobe first
A good way to make the most out of charity shops and online marketplaces is to go through your own cupboards beforehand.

Are there any items of clothing that are in perfect condition that you’d forgotten all about and could be put back in rotation?

Could an item in perfect condition that you don’t wear any more be sold on an online marketplace and make you a few extra pounds?

Are there items in your wardrobe that have seen better days and need replacing?

If money is tight, you don’t want to be purchasing items you don’t really need, so it’s well worth making sure you know what you’ve already got and what you need to look for.

Style doesn’t have to be costly, either to your wallet or to the environment, so next time you’re in the market for some new clothes, why not start by looking for pre-loved items?

Nearly £2bn in Child Trust Funds remains unclaimed…

In 2005, then-chancellor Gordon Brown launched a new scheme to encourage parents to save money for their children.

Under the Child Trust Fund (CTF) policy, every child born between September 1st 2002 and January 2nd 2011 was eligible to receive at least £250, which they’d be able to access once they turned 18.

But many young people who are now old enough to claim their money are yet to do so.

In fact, a new report by the Public Accounts Committee (PAC) estimates that more than four in ten 18 to 20-year-olds have not claimed the savings in their matured accounts.

Figures also show that more than £1.7bn is currently waiting to be claimed by nearly a million young adults.

So what’s gone wrong?

Some of those who haven’t claimed the money will have simply lost track of these accounts, while others might not even know they have a CTF in their name.

The PAC has therefore called on HMRC to do more to find and get in touch with anyone who hasn’t claimed money they’re entitled to, and has criticised the organisation for a “failure in long-term planning”.

Trust providers were also singled out for criticism, with the PAC noting that although they’re charging fees for managing CTFs – and potentially earning up to £100m a year through these charges – they’re doing little to connect dormant accounts with their owners.

Figures showed that just four out of 55 providers have proactively and voluntarily worked with the Tracing Group to find people who may have forgotten about their account.

The fact that so much money is going unclaimed by young people is especially worrying given that this same group are among those hit hardest by the cost of living crisis.

As the PAC notes, about half of all CTFs were for children in low-income families – and many of these could be among those failing to claim this money now.

The CTF policy was designed with the idea that young people would have a pot of money available upon reaching adulthood, and understand the wisdom of saving.

But if those who would benefit don’t know about it then they’re at an instant disadvantage.

Keeping track of different accounts can be difficult enough, but if so many people turning 18 don’t know about CTFs or how much money they’re sitting on, it’s clear that the ball has been dropped.

Let’s hope that HMRC acts on the PAC’s recommendations and helps young people access this money, as it could make a very real and tangible difference to them at a crucial point in their lives.

What do rising interest rates mean for you?

The Bank of England has increased interest rates for the 14th month in a row – meaning they now stand at 5.25 per cent.

Members of the Monetary Policy Committee have been hiking rates in an effort to tackle inflation, which remains well above the Bank’s target of two per cent.

But while high inflation is putting many people’s finances under strain, raising interest rates causes its own pressures for hard-pressed households.

So what does this latest rate hike mean for you and your finances?

Higher mortgage payments
Interest rate rises will be deeply felt by anyone with a mortgage, as anyone on a variable rate mortgage is likely to face higher monthly repayments.

According to estimates from the Bank of England, nearly a million households are set to see mortgage payments go up by at least £500 a month by the end of 2026, while more than two million households will pay between £200 and £499 more each month.

The Bank also believes that the average household coming off a fixed rate deal in the second half of this year will see their monthly repayments go up by £220 if they refinance at current rates.

Needless to say, the impact of these increased payments could be devastating for some, and at least strongly impact on the budget and disposable income of others.

Higher Cost of Borrowing
Interest rate hikes can be costly if you’re borrowing money, perhaps if you have a credit card or have taken out a personal loan.

That makes it more vital than ever for anyone with multiple debts to prioritise their repayments, perhaps working to pay off high interest debts as soon as possible.

Less disposable income
Your mortgage is one of your biggest financial commitments, so if your monthly repayments become more expensive, you’ll have less money to spend elsewhere.

This can impact on countless aspects of your life, from the amount you’re able to spend on essentials such as groceries to how often you’re able to go on holiday or eat out.

Homeowners having less disposable income would also have a wider effect on the economy, as consumer confidence will fall, people would spend less and businesses would see a drop in demand and custom.

According to figures from KPMG, more than half of consumers have cut non-essential spending in the first half of 2023, with many cutting back on luxuries such as eating out, choosing to buy more own brand and value food instead of branded alternatives, or opting to holiday in the UK rather than overseas.

More than a third of those polled cited their mortgage as their main reason to cut back on their spending, as many were worried about their current costs and others were concerned about their monthly repayments going up in the near future.

Not saving as much
On the face of it, higher interest rates are good for savers. But in reality, increased borrowing costs can push short-term concerns to the top of the agenda, and saving to the bottom.

For instance, if a person has debts, they’ll be more likely to prioritise repaying them instead of putting money into their savings.

As a result, many will miss out on the interest they could have got on their savings, and perhaps find themselves with a smaller pot of money further down the line.

Dipping into savings
In a climate of higher interest rates, many businesses will be forced to pass on many of their extra costs to consumers.

That, in short, means basic goods and services can end up costing more and consumers are under greater financial pressure. It’s therefore no surprise that many people are resorting to accessing their savings.

Figures from KPMG show that a quarter of people are currently having to use savings to help them cover essential household costs. This is particularly common among younger adults, with 43 per cent of 18 to 24-year-olds using their savings in this way.

With soaring interest rates having such a profound and wide-ranging effect on people’s finances, it can be easy to get knocked off course as you work towards your long-term financial goals.

That makes it more important than ever to speak to a professional financial adviser, who can take an informed, objective look at your financial situation and offer advice that suits you and your circumstances.

If you have any questions on managing your finances in the current climate without losing sight of your goals, please get in touch and we’ll be happy to speak with you.