Money: How to save some cash if school’s emptied your wallet

With the holiday season a fading memory, family bank balances are likely depleted from back-to-school costs.

Parents across the UK have collectively spent nearly £1.2 billion sending their children back to school, according to a report from Mintel. That makes it the third-biggest retail spending event after Christmas and Black Friday.

But, now the kids are back in the classroom, there are some ways you can help improve your finances – whether it’s sorting your pension, saving for a rainy day, even getting a new mortgage, or dealing with debts.

Here are some suggestions from Moneyfacts.co.uk…

Plug the pension gap

“It’s vital that consumers seek advice to ensure they have a comfortable pot ready for their retirement, as it will only get harder to plug the gap as they get older,” says Rachel Springall of Moneyfacts.

Depending on individual circumstances, she says, someone could potentially build up £30,000 just by saving an extra £100 per month over 25 years. But even this extra amount may run out more quickly than expected.

Reduce repayments

Some borrowers may be sitting on their mortgage lender’s standard variable rate (SVR) after an initial deal has come to an end.

But big savings could be made by switching to a new deal.

In early September, the average SVR stood at 4.89% – but the average two-year fixed rate mortgage on the market had a much lower rate of 2.47%.

“Borrowers may also be concerned about economic uncertainties and are looking to fix for longer,” says Rachel.

“Thankfully, there have been significant cuts to deals in the five-year fixed market, as well as more deals surfacing for even longer terms, such as 10-year and 15-year fixed deals.”

Shift credit card debts

Credit cards can be costly – but there are still plenty of interest-free deals available.

Rachel highlights a 29-month interest-free deal which has been offered on balance transfers from MBNA, for a fee of 2.75%.

Alternatively, NatWest has been offering a 23-month 0% interest balance transfer deal without a fee.

Consider a low-cost loan

Rachel says some lenders, including John Lewis Finance, have been offering personal loan rates as low as 2.9% to borrow £10,000 over five years. Five years ago, the lowest rate for the equivalent amount and term was 4.1% from Sainsbury’s Bank.

Switch current accounts for some “free” cash

Royal Bank of Scotland recently announced it would give £150 to consumers who switched. Other examples of cashback perks include First Direct, which has been offering £50, while new customers who switch to M&S Bank can get up to £180 in gift vouchers when they switch and stay.