Surviving a new year of mounting gloom

Seek help for debt rather than letting it spiral out of control
Seek help for debt rather than letting it spiral out of control
Dr John Steadman, archivist of Portsmouth History Centre based at Portsmouth Central Library     Picture:  Malcolm Wells

Your chance to trace past family members on the web

0
Have your say

Business and consumer polls are predicting a tough new year.

The outlook for jobs, the economy, housing, travel and personal finances remains gloomy. But how all the doom and gloom will translate into making ends meet for most hard-pressed families remains to be seen.

Streetwise looks at the likely scenarios and suggests ways of keeping ahead of the austerity game.

1. MONEY

With interest rates set to remain low for most of the year, savers will continue to be penalised. Interest on personal bank accounts will only earn loose change and few financial products will offer complete safety with respectable returns.

ISAs are untaxed savings accounts that will continue to be as safe as houses. It pays to put your savings into cash ISAs and not leave surplus money languishing in negligible interest bank accounts.

Bank fixed rate bonds are another safe bet, but banks have a nasty habit of giving you a top interest rate for the first year, reducing it to next to nothing thereafter. Search the net for top deals and switch your money around.

Credit will remain in short supply, but if you’re struggling to pay off the plastic after the festive binge dump your high interest cards and switch to one with the lowest possible rate.

Check with moneysavingexpert.com for rock bottom rate card deals, top interest rate bonds and ISAs.

2.DEAL WITH DEBT

Maxed out on the credit cards? Borrowing to pay for food and fuel? Both are warning signs that the finances are out of control.

Don’t be tempted to go for pay day or doorstep loans. You will end up paying through the nose and making the situation worse. To get your finances back on track and for help dealing with creditors make an appointment with the CAB and get free confidential debt help and advice.

3.EMPLOYMENT

All the signs are that the national economy will flat line or slip back into recession during 2012. The outlook for jobs remains distinctly dodgy.

Plan for the worst by reviewing your skills and keeping your CV up to date. If you’re unfortunate enough to be laid off, get your local CAB or trade union to run a check over your redundancy package, and use free internet facilities to help you with advice about sharpening your job application skills.

4.HOUSING

According to Credit Action, last year a home was repossessed every 14-and-a-half minutes. Overall prices will continue to drift down, mortgages will be more difficult to obtain and, towards the end of the year, borrowing costs could start to rise.

If you’re a buyer, don’t leave it longer than the summer, while potential sellers should consider staying put for a while and improving their homes until better times appear round the corner.

5.TRAVEL AND HOLIDAYS

Motoring costs are all still moving in one direction – upwards. While fuel costs have stabilised or even fallen a little in the short term, it’ll only take more political instability in the Middle East for them to rocket away again.

Spring clean and declutter the boot, check tyre pressures regularly, cut out short journeys, car-share the school run and develop a lighter right foot.

Even more worrying is the cost of car insurance which has jumped by more than 15 per cent over the last twelve months. When it comes to renew, don’t stay loyal, shop around and switch to save the £££££s.

More people will opt for stay-at-home holidays this year, but for the keenest deals at home or abroad, go online. Prices, even for packages, can be significantly cheaper than the very same deal from high street travel agents.

6.HOUSEHOLD

Energy now accounts for almost a third of household costs. Prices will fall modestly in the spring, but they will continue to rise well above the rate of inflation for the foreseeable future.

Protect yourself as much as possible by developing an energy-efficient home, turning down the heating in mild weather and checking the internet for guidance on switching to the most competitive energy tariffs.

Times are tough for retailers, so up your game to take advantage. Haggle for big-ticket items like fridges, washing machines, cookers, and flat screen TVs. Say you like the product but not the price and be brazen enough to ask for a discount for cash.

7.SCAMS

Always be on your guard. Too-good-to-be-true offers usually are, and hard-pressed households can do without being cheated while trying to cope with their very own austerity drive.