Money

Money saving tips from Emma Skinner of CompareAndSave.com

If you are not fully prepared for this time in your life, it can cause a lot of stress and worry. However, it is quite easy to save money on the little things that add up.

By taking the time to be thrifty, you can reap the rewards.

Being thrifty can be time consuming but finance after 50 is incredibly important, as every penny really does count. Here are a few ways that you can be thrifty in your fifties and sixties.

Cut your Mortgage costs

More often than not, the most expensive purchase you will ever make is your home and, when you are not one of the few people able to pay cash up front, you need to ensure that you are getting a good deal on the credit used to finance it.

It’s quite possible that you may have already cleared your mortgage by the time you start worrying about over-50s and over-60s finance but, if you haven’t, there are a few ways you can try and save money. If you can afford to pay over your minimum mortgage payment amount – do so! This could save you thousands of pounds in interest costs and will also reduce the number of years you have to buy life insurance cover for your outstanding mortgage balance, saving you even more money.

For example, let’s say you have borrowed £120,000 at 6.5% over a standard 25 year period; you will be paying back £810.25 per month. If you were to pay an extra £50 per month, you could pay off your mortgage 39 months earlier and save a whopping £18,549.36 on interest over the mortgage term.

You could be saving £742 a year in interest alone (£18,549.36 interest saved divided by mortgage term of 25 years) by taking two minutes to amend your monthly mortgage payment.

Plus, for 39 months in later life you will have £860.25 extra per month in your pocket because you will have finished paying off your mortgage early (depending on whether or not you have to pay an early-repayment fee).

Of course, if you are over-50 now, you may not be able to save as much money on your mortgage as shown in the example above, depending on where in your mortgage term you are. However, the general principle applies and it could help you pay off the rest of your mortgage more quickly and still save you substantial amounts of money on interest charges.

Compare and save

More and more people are starting to save money by comparing their gas and electricity payments. The domestic fuel market is incredibly competitive, and the chances are that you could become more thrifty just by investing a little time.

Gas and electricity prices are soaring – we have already had some shocking price hike announcements from the likes of British Gas, Scottish Power and Scottish and Southern Energy. This means that once the other big suppliers have also announced their price hikes (making it a level playing field) it will be the perfect time to ensure you are with the right supplier and start cutting the cost of your bills.

However, if you’re happy with your supplier, there are other ways to cut costs. You could try and stay as energy friendly as possible by switching electrical items off at the mains rather than leaving them on standby and by boiling less water in the kettle, etc. In addition, revising your payment method and switching to direct debit often saves customers around £5 per month.

If you were to spend 30 minutes searching for a new supplier, and researching on how to keep your energy costs down, you could save up to £300 on your fuel for the year – the equivalent of earning £600 per hour.

Insurance

We all have at least one form of insurance, whether it be home insurance, car insurance, life insurance, health insurance, pet insurance  or travel insurance. It is so easy to compare and save by getting an overview of the market and comparing your monthly payments to what is available.

Let’s say you have a policy for each of the six different types of insurance, and after two hours of research you find you could save £10 per month on each. You will have made an annual saving of £720 over all six insurance products – that’s the equivalent of earning £360 per hour!

Reviewing your finances in later life is so important because you are often relying solely on your pension income to support you, and if not, you are probably trying to be a little thrifty with the thought of retirement looming.

It is so easy to save money and become far more economical later in life if you are willing to invest a little more time.

Just the few actions we have shown you here could theoretically save you £1,762 per year, without even considering the extra £860.25 per month you wouldn’t have to pay out on mortgage payments for 39 months!

It is important that you take finance seriously in your 50s and 60s, so consider where you could make savings and take the time to save money – after all, you worked hard to earn it and should be able to spend it on the good things in life, which you deserve.

Emma Skinner

About the author

Emma Skinner is the Editor of CompareAndSave.com , one of the UK’s leading personal finance comparison sites, specialising in saving people money by giving them the information they need to compare credit cards, prepaid cards, insurance and utilities.