A list of financial housekeeping to keep you busy during lockdown
The coronavirus crisis creates the chance to tackle chores such as reviewing our car insurance and lowering inheritance tax bills
The lockdown may have dramatically reduced what we can do in our day-to-day lives, but it has given us several financial chores we can tackle from our sofas.
Firstly, consider your energy bill. The chances are your heating has been on more than usual during lockdown. Your electricity usage has probably shot up too. So make sure you aren’t paying more than you need to. “If you are one of the millions on a default tariff, you could switch to the cheapest fixed-rate deal for both gas and electricity and save about £412 a year on energy,” says Katherine Denham in The Sunday Times.
Shopping around for the best deal is simple. Find your most recent bill and head to a comparison website. Tap in your details and it will show you the best deals and how much you would save by switching. Lockdown could be a good time to help elderly relatives cut their bills too. During a phone call, ask them for the details of their bill and enter them into a comparison site to see how much they could save by switching. “Once you’ve chosen your provider, simply agree to the new deal online and your new supplier will communicate with your old one to arrange the switch,” says Denham.
Next, look at your insurance premiums. We’re all using our cars a lot less. If you aren’t using your car at all and can park it off the road you could get a Statutory Off-Road Notification from the DVLA before cancelling your car insurance and stopping vehicle-tax payments too; if you pay the latter semi-annually or annually rather than monthly, you can get a partial refund. And if you are still using your car for essential journeys you can cut your insurance costs by switching to a policy that charges you “by how far your drive by day – rather than estimating it over the year”, says James Andrews in the Daily Mirror. Pay-by-miles car insurance charges you a fixed amount while your car is parked. You then pay extra for the miles you drive using GPS technology to charge you accurately.
Finally, if you received a legacy of shares or property in the year leading up to the coronavirus market plunge you should be speaking to HMRC about the inheritance tax (IHT) bill. “Under a little-known tax rule, executors [can] apply for IHT refunds on losses made on the sale of inherited securities within 12 months of an individual’s death,” says Emma Agyemang in the Financial Times. The rule applies to listed shares, gilts and unit trusts. The market meltdown means there should be scope to claw back plenty of IHT. You can also claim an IHT refund if executors sell a property for less than it was valued at for IHT purposes within four years of the death.
Keep an eye on your Wi-Fi
Don’t pay over the odds for your broadband. “Millions of broadband customers may be paying £100 or more a year too much… after Ofcom relaxed the rules around how firms deal with contracts coming to an end,” says Sam Meadows in The Sunday Telegraph. Providers were due to start sending notifications to customers before the end of their contracts to remind them to negotiate a better deal or switch. But Ofcom has said that during the pandemic it won’t take action against those failing to warn customers that their contract is coming to an end.
No wonder, then, that several broadband firms – including Virgin Media and BT – aren’t bothering to send out the letters. “Two million homes will face hidden price rises over the next 12 weeks,” Alexander Fitzgerald, co-founder of broadband firm Cuckoo Internet told The Sunday Telegraph. “Check if you’re out of contract because you could save more than £100 a year by switching.” Switching may be difficult for now. Home visits by engineers have been stopped for the moment. But most of us should be able to switch remotely. So shop around for the right deal, then contact the new firm to see if they can switch you.