The start of a new year is the perfect time to take control of your finances and set yourself up for success.
From switching providers to reviewing your insurance and creating a savings plan, these practical tips could help you to save money in 2025.
1. Switch providers to save
Switching your broadband, pay TV and mobile phone providers could save you up to £235 a year.
Our research shows broadband and TV customers save an average of £160 a year by switching, with those leaving Sky seeing the biggest savings. Mobile customers could also take advantage of switching, with average savings of £67.
Switching broadband providers is easier than before thanks to Ofcom’s One Touch Switch rules, which mean you only need to contact your new provider to make the change. Mobile phone users can also benefit from flexible one-month SIM-only deals that make it easier to move if prices rise or services fall short.
If you prefer not to switch, haggling can be a great way to lower your bills.
Read our advice on the best broadband providers and mobile phone deals.
2. Protect yourself against inflation
With inflation rising by 2.6% in November 2024, it’s important to protect the value of your savings.
Fortunately, there are still plenty of options that outpace inflation. The majority of savings accounts currently beat inflation, including instant-access accounts and fixed-term bonds. To find out which providers offer good rates, see our guide on the best savings accounts.
By shopping around and choosing the right deal, you can make sure your savings grow in real terms and protect yourself against further inflationary pressures in the new year.
3. Make sure you’re getting the best energy deal
The energy price cap is set to rise by 1.2% on 1 January 2025, pushing the average annual bill for a typical household up to £1,738, according to energy regulator Ofgem.
A household using an average amount of energy will pay around £21 more per year, but those using more energy will face bigger increases. The price cap limits the cost per unit of energy, so your total bill depends on your usage.
If you’re on a variable tariff, now might be a good time to compare fixed deals. Switching to a fixed-rate tariff could save you money if you can lock in a deal below the upcoming price cap rates.
If you’re on a fixed-rate tariff already, it’s important to check for any exit fees before switching providers.
4. Tax-proof your investments
With rising taxes on investment gains, the start of the year is a great time to make your portfolio more tax-efficient.
The Bed and Isa process lets you sell investments from a general investment account and repurchase them within an Isa, protecting future gains from tax.
Moving investments into an Isa could boost returns by more than £13,000 over 10 years for a higher-rate taxpayer. To start, you’ll need an Isa and a general account with the same provider. Some platforms offer a streamlined process, but stamp duty on shares may apply.
Act before 5 April 2025 to use this year’s Isa allowance. It’s a simple step to reduce tax, protect your portfolio and set yourself up for better returns.
- Find out more: how to tax-proof your investment portfolio
5. Maintain your assets
With a few proactive steps, you can ensure you’re well-insured and not paying over the odds.
For car insurance, keeping your vehicle in a roadworthy condition is essential. Neglecting maintenance or delaying repairs could invalidate your insurance, leaving you unprotected.
Regular servicing and addressing issues promptly will keep your car safe and your coverage intact. Additionally, reviewing and comparing policies annually can help you secure a better deal, as premiums vary significantly between providers.
When it comes to home insurance, protecting your property against storm damage is becoming more important with the rise in severe weather events. Inadequate maintenance – such as blocked gutters, loose roof tiles, or overhanging branches – can lead to costly damage. Insurers often reject claims if homeowners haven’t taken reasonable precautions.
Simple steps such as clearing debris and securing outdoor furniture can reduce risks and ensure smoother claims if damage occurs. Make sure your policy covers storm-related events and review your options to avoid overpaying for unnecessary extras.
- Find out more: Check out our guides on the best car insurance or best home insurance
Find the best deal on home insurance using the service provided by Confused.com.
6. Check your mortgage agreement
If your mortgage deal is coming up for renewal, now is the time to act.
Most fixed-rate mortgages revert to the lender’s standard variable rate (SVR) when the deal expires, which could significantly increase your monthly payments. To avoid this, start looking for a new deal up to six months before your current term ends – many lenders allow you to secure a rate early.
When remortgaging, it’s worth checking what your current lender is offering, but you could make big savings by comparing deals from other providers.
By preparing early, you can secure a better rate, avoid rolling onto a costly SVR and potentially save thousands over the life of your loan.
To start your research, check out our guide on the best mortgage rates.
7. Consider your retirement options
Recent changes announced in the Autumn Budget mean inherited pensions will be subject to inheritance tax (IHT) starting in 2027.
Defined contribution pensions will count toward your estate’s value. If your estate exceeds £325,000 (or £500,000 if passing your home to a direct descendant), amounts above the threshold will be taxed at 40%.
To plan ahead and reduce the impact of these changes, you can do the following:
- Spend or gift funds early: you can give away up to £3,000 each year tax-free, or gift regularly from surplus income to reduce your taxable estate.
- Consider an annuity: turning your pension into a steady income for life can provide financial security and lower the taxable portion of your estate.
Find out more: best annuity rates
8. File your tax return earlier
Filing your tax return before the 31 January 2025 deadline gives you plenty of time to gather documents, avoid mistakes and plan your payment. If you’re due a refund, filing early means you’ll likely get it faster, as HMRC processes rebates more quickly outside the end-of-January rush.
Filing early lets you budget by knowing exactly what you owe and gives you time to save. If you have questions or need help, contacting HMRC is easier before the deadline, when queues are shorter.
Avoiding last-minute stress and penalties makes early filing a simple way to start the year on the right financial footing.
- Find out more: 6 reasons to file your tax return early
9. Take control of your debt
If you’re managing debt, taking proactive steps can help reduce stress and free up money for other essential expenses.
One effective option is transferring existing balances to a 0% interest credit card, which can give you a break from high-interest charges and make it easier to pay down your debt faster.
These deals last for a set period, so be sure to clear the balance before the 0% term ends to avoid extra charges.
- Find out more: best interest-free purchase credit cards 2024
10. Create a savings plan
Having a savings plan is important for navigating through any life stage, be it starting a family or preparing for retirement.
The first step is to assess your outgoings. It’s important to take your time and consider how your money is spent, including utility bills, travel, mortgage payments and everyday spending.
Next, add your income and take away your disposable income, which should hopefully highlight opportunities for saving. Read our advice on how to budget for step-by-step guidance on creating a plan.
If you have particularly ambitious savings plans, such as planning to buy a house or to upsize, it might be worth investing in a financial adviser or financial coaching. A professional can give you tailored advice on how best to save your money and where to make changes in order to meet your financial goals.
11. Plan for the best, prepare for the worst
It might feel uncomfortable to think about life insurance or private medical insurance (PMI), but planning for the unexpected can protect your loved ones and provide peace of mind.
Life insurance provides financial support for your family if something happens to you, covering expenses such as mortgage payments, childcare and general living costs. This ensures your loved ones aren’t left struggling if the worst happens.
With many options available, it’s worth comparing quotes to find a policy that fits your needs and budget, whether you’re planning for a growing family or looking for a financial cushion for the future. You can find out more about taking out a life insurance policy using the service provided by LifeSearch.
PMI offers quicker access to medical care, avoiding potentially long NHS waiting times. While it isn’t essential for everyone, it can be valuable if you want access to specific treatments or more control over when and where you receive care. As with life insurance, premiums and coverage can vary widely, so shopping around is crucial.
- Find out more: see our guides on the best private health insurance and the best life insurance
Find the right private health insurance policy using the service provided by LifeSearch. Find out more
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