Tax Refund and Rebate FAQs

We've collected the answers to the most common questions we get here. If your question isn't answered, or if you just prefer to talk to a real person right away, you can give us ring, use the Live Chat here on our site, join us on Facebook or send us a message for help.

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Walk over to your thermostat and turn it down by one degree. If you can, avoid touching it again. Manage that, and you’ve just saved yourself nearly one hundred and twenty seven pounds for the year!

How many times have you put an item on your shopping list, and then realised you already have it? That’s partly why the average UK household wastes around seven hundred pounds’ worth of food per year. So go save some food from landfill, right now! Find the seven items closest to their sell-by and work them into this week’s meal plan. Repeat that process once a week and you’ll save yourself nearly five hundred pounds a year.

What’s your quietest day of the week? Circle that date and make it your “no spend day.” Pick free activities you can walk to. Make meals from leftovers. Crack out the board games. There’s loads you can do that costs nothing.

Could you live without premium, all-access gym membership? Could you replace spin class with a jog? Could you take a Youtube fitness class? There’s loads you can do to keep fit in the great outdoors and your home. The “gym of life” is all around you, and membership is free forever.

If you can live without a forty pound per month gym membership, that’s four hundred and eighty pounds back in your pocket for the year.

You don’t need two streaming services. You definitely don’t need three. So keep your favourite and get rid of the others. Remember, iPlayer, All4, and Freeview are all included in your TV licence fee. Youtube’s also free. And if you’re really old school, there’s always live TV…

You’ve definitely got one ill-considered purchase sitting in the house that still holds some resale value. Like the guitar that gets picked up once every six months. Or the iRobot Roomba that hasn’t been charged since last year. Get it on eBay, get some cash in your pocket, and reclaim some living space.

Are you in the right council tax band? Martin Lewis estimates more than four hundred thousand households are in the wrong one. The bands were calculated over 30 years ago. And in some cases, the calculations may have been wrong in the first place. So check your council tax band on a recent bill. It should have a letter next to it, like “Band B.” Letters close to the start of the alphabet are the cheaper bands. So if your home is fairly modest, but your council tax band is F or H, something could be wrong. Get on your local council’s website and find out how to challenge your band. Or get them on the phone - cause that call could be worth thousands! There’s another tax code you’ll need to check that often gets messed up - and it’s on your paycheck! 

In debt with your council tax? Read our guide for support.

Let’s have a look at your last paycheck. What’s the tax code? Is it something like…

1257 W1

1257 M1 OR

1257 X?

If that’s a “yes”, it looks like you’re on an emergency tax code. Usually, this is a short-term measure - for example, on your first paycheck from a new job. They’re used when your employer, their payroll accountant, or HMRC don’t have your up-to-date information. A really common example is when your P45 hasn’t been received or processed yet.

But if you’ve been on an emergency code for a while, something may be wrong. It might be that your P45 was never received or processed. If it’s something you forgot to do, get that P45 to your employer, pronto!

If they already have it, it’s time to start busting chops. Get on to your employer first. They may allow you to speak directly to their accountants, or they may not. If you have no luck there, contact HMRC directly.

Once HMRC has the correct information, any tax you’ve overpaid will get paid back to you through your salary.

Where’s your water meter? Do you even have one? Are you sure? Water bills get charged in one of two ways; either through a water meter reading; or by averaging the amount of water used in your area. If you don’t have a water meter - and not everyone does - you could be paying for some of your neighbours’ water. The utility company will take an average for the area. But they make some assumptions in those averages - specifically, they may assume a larger house has lots of people living in it. Say you live alone in a three-bed house - in that case, you may be paying for 3 people’s worth of water. So check your bill. If it’s got a meter number on it somewhere, you’re golden. If not, call your utility provider - get a meter installed for free and get yourself a fairer deal.

Do you spend your own money on work expenses? For example, do you travel between work sites in your own car, or on public transport? Have you spent your own money on uniforms or courses? Many people don’t realise these expenses are tax exempt. It’s also a common misconception that you can only claim these expenses back if you’re self-employed. So if your employer hasn’t reimbursed you for these costs, you could be due a tax refund. It takes just a couple of minutes to find out what you could be owed.

Death, taxes, rising energy bills. You can definitely count on the first two. And the third is quickly becoming just as certain. Switching your energy provider is often touted as a smart way to lock in favourable terms. So has combining your gas and electricity into a single bill from the same provider. But that’s not always the best course of action. There are the usual hurdles to consider - like exit fees. But market conditions could also mean it’s better to stay where you are. Changing energy caps, in particular, have muddied the water. And many customers have ended up with providers they didn’t choose because theirs went out of business. So by all means, fire up the comparison site and see if there’s a better deal on the table. If there is, make sure it’s a good enough deal to offset any exit costs. And do your research. If there are press stories about your potential new supplier struggling financially, consider staying put.

You’re probably familiar with the unofficial “lazy man tax”. That’s when you get slapped with less favourable terms than new customers for products like insurance. In many cases, it’s been cheaper to shop around for new customer deals than stick with your existing providers - and banks have been no exception. In fact, it’s possible to get slapped with a double whammy on your bank accounts. For example, you may have signed up with a bank who offered a high interest rate on savings accounts. But after a year, those terms end, and you roll onto a much lower rate. It might even be zero percent! And by leaving your money where it is, you may also miss out on incentives for switching banks - like a cash bonus, or attractive introductory rate. However, like with energy bills, times have changed - and switching providers may no longer be the best option. In many cases, it might make more sense to stay where you are. Check your bank’s deals first, then see if any others can beat it.

Are you paying interest on your credit card bill each month? If the answer is yes, it might be time to look at a balance transfer. If you’re paying a high rate - which can be upwards of twenty percent APR - it could be time to transfer that balance. That’s where you move your existing credit card debt to a new card with a lower promotional interest rate. There’s usually a fee or percentage involved in balance transfers. But it can be worth paying if there’s a long-term saving on interest.

If you don’t carry a balance on your credit card, you could still consider switching. Many card providers offer 0% interest for two years or more. So, in theory, you could put your household expenses on your new 0% interest card. Put the money you’d normally spend on expenses into a high-interest account - and DO NOT TOUCH IT. Then pay your card off right before the end of your promotional term. You’ll be left with a tidy amount of interest in your savings account! Be warned though - this takes skill, attention, and discipline. You don’t want to accidentally spend the money in your savings account - or miss the end of your promotional period. So approach this idea with caution. Finally, could you get a better deal from a rewards card? This is where you get rewards for spending on your card - like cash-back on purchases or air miles. Make sure the benefits outweigh any fees based on your spending habits.

Getting Ocado delivered to your door? Get on Google Maps. There’s probably an ALDI, LIDL, or other discount supermarket nearby. Make your next shop a cheap one!

It’s that dreaded “lazy man tax” again! Digital subscriptions quite often sneak “auto-renew” features into their product. This can happen even when you think you’re paying a one-time fee - it can actually be a covert annual subscription that auto-renews. Adobe Photoshop, take a bow! So log in to any digital product or service you’ve signed up for recently and check you don’t have “auto-renew” turned on. It’s especially important if there are sneaky annual increases built into your terms and conditions. So go hunt down that auto-renew button and turn it off! Just make a note of the date the service will end. You can always switch it back on if you’re enjoying the subscription come renewal time. 

It’s a classic for a reason. A simple penny jar is great for giving you a real-time, real-world sense of what you’re saving. Plonk your jar on a shelf or window sill, somewhere you’ll see it every day, and physically put your saved pennies into it. You won’t get too deep into the year before you have to get yourself a bigger jar, which is a great feeling in itself if you’d always felt like you couldn’t save money at all.

One thing to watch out for is the “cash-out tax” you might find yourself getting kicked with when you take your jar(s) to the bank at the end of the challenge. You could choose to carefully bag up all the loose coins yourself to deposit them, which is a bit of a chore but does keep your savings intact. On the other hand, dumping them into a bank’s coin-sorting machine is a lot simpler – but will typically cost you about 10% off the top for the convenience. With the kind of cash we’re talking about, that’s a big chunk of change to lose.

Obviously, the cash method won’t work for everyone. We don’t all deal in coins as much these days, particularly since COVID-19 reared its ugly head. Instead, you can use your online banking app or website to transfer the savings into a separate account. Depending on your bank’s rules and systems, you might have to do this monthly rather than daily. That’s slightly against the spirit of the challenge, of course, but stick to the plan and don’t skip your transfer dates either way.
Another way to go is to split up your yearly savings total into 12 payments and get them transferred automatically to your savings account. Rounding up, this would mean stashing away £55.67 per month throughout the year.

Saving money isn’t always easy. When we talk about things like following the 50/30/20 rule, what we’re really trying to do is build up a healthier relationship with our cash. It’s all about developing simple habits that lead to serious benefits over time – and that’s usually worth a lot more than socking away a lump of cash every now and then.

For a quick guide to the 50/30/20 rule, take a look at our article, “What You Should Be Saving According to Your Salary”. For right now, though, let’s talk about how even the smallest baby-steps toward better saving habits matter. The 1p money saving challenge is a great example of this, and it’s something you can start as soon as the year ticks over.

Here’s the whole idea in a nutshell. Every day of the year, starting from the 1st of January, you’re going to save just one penny more than you did the day before. So, on the 1st of January you set aside a single penny. It doesn’t matter if it came out of your pocket or you picked it up off the street. Just put it away somewhere and mark your calendar to show that you did it.

When the 2nd of January rolls around, you save 2p – that’s on top of the 1p you saved yesterday, so you’ve got 3p saved already. On the 3rd, you save 3p (for a total of 6p stashed away). After that you just keep on going to the end of the year. See? We told you it wasn’t going to be complicated.

So right now, you’re probably thinking that these amounts really don’t seem like they’d be worth saving. After all, even on the final day of the year you’ll only be putting away a grand total of £3.65, right? The funny thing is, even though the challenge is incredibly easy to complete, that doesn’t mean it’s not worth trying. In fact, following the challenge for an entire year actually nets you a grand total of £667.95 (or £671.61 if it’s a leap year)!

The beauty of the 1p money saving challenge is that it really doesn’t matter when you start. The savings will be mounting up from the first day, and you can keep going well past the end of the year to keep your momentum.

If you’ve missed the suggested kick-off date of the 1st of January and want to catch up rather than working from scratch, no problem! Just work out what you would have saved if you had started on the 1st and sock that amount away immediately. So, if your actual start date was, say, the 24th of January, you’d just add up all the previous totals to get £3 and start by saving that. Then, the next day, you’d just add 25p to that total and work from there.

You can read up on this in our article “The 1p Money Saving Challenge”, but it’s basically just a very low-hassle trick to help you save an extra £667.95 per year. You can take the challenge with nothing more than a jar or piggy bank, or do it digitally if that’s easier. Either way, it’s as simple as saving a penny one day, then 2p the next and so on. It doesn’t sound like it’d amount to much, but over a year it’s an impressive way to save.

 

More money saving challenges

Making money decisions in a hurry is often a bad move, but we’re getting pressure piled on us all the time to do just that. “Unmissable” deals with limited-time offers and “FOMO” sales techniques are designed to short-circuit your brain into emptying your pockets. Before you know it, there’s a courier at your door and you’ve already forgotten what you ordered.

Here’s an easy trick that’ll cost you nothing and could save you plenty: just give it a day and decide tomorrow.

The 24-hour rule is one of Lloyd’s Bank’s top savings tips for the same reason it’s one of ours: it works. Set yourself a 24 hour no-spend rule on non-essential purchases – particularly online ones. Instead of hitting the “add to cart” button, just bookmark the page and click yourself away somewhere else. The next day, come back to your bookmark and ask yourself if it still looks like it’s worth the money. If it does, at least you put some thought into it. If it doesn’t, you’ve saved some cash.

Spending money is the easiest thing in the world and it seems even easier when it isn’t yours to begin with. As good as credit cards seem in the short term, failing to pay back your credit can gradually put you and your money in a very bad place. It’s vital that any purchases made on these cards is paid back pronto to prevent their high interest rates racking up debt. The money you’re using just to pay back the interest is cash that could otherwise be in a savings account. This is why crunching your credit is widely seen as the number one priority.

If you find yourself with large amounts of credit card debt, fear not, there are ways to unshackle yourself from this money merry-go-round. You can do this with the help of a balance-transfer credit card. It may seem strange to use another form of credit to pay off another but hear us out. By using one of these you can transfer your existing debt into new credit that reduces the impact of the initial interest.

Each balance-transfer card has different conditions but the majority offer a set promotional period to pay back the money without interest. When it comes to finding a balance-transfer card you must make sure you give yourself enough time to pay it back. Otherwise, you could find yourself in the same position as before. If you make this first step into cleaning out your credit, you’ll be in a much better mindset to kickstart your saving journey.

This tip is more about setting good saving discipline than actually finding money. All you need to do is set up a standing order so that money goes into your savings account each month. Be careful not to stretch yourself too thin as this trick works best when you don’t even notice it leaving your account. If you find yourself constantly pulling money back out of your savings, try dropping the amount until it’s at a consistent level.

Once you’ve hit this point you can continue living your life as usual but, this time, with a steady stream of savings totting up in the background. If you end up catching the saving bug and love this method you can take it one step further. The rise of online banks such as Monzo have grown in popularity over the past decade because of their dedicated saving tools. If you don’t mind switching, some let you segment your income into different pots for different purposes. Whether you’re saving for a holiday or a new car, this is handy for those who might lack discipline with their spending.

Spotify, Apple Music, Netflix, Amazon Prime and even Disney+. These streaming platforms have become a media mainstay in recent years with 60% of Brits now signed up to at least one service. In isolation, low costs of £9.99 for an almost endless library of content seems like a good deal when compared to satellite TV packages. However, if you’re subscribed to multiple platforms that serve the same purpose, your monthly costs could start to climb. Knocking just one additional platform from your bills can see you save upwards of £120 a year in some cases.

For those who literally cannot live without all of their subscriptions, it may be worth looking into sharing an account with a friend or family member. With the exception of Disney+, most of the major platforms offer some sort of discount for a shared subscription. This allows you to keep your own profiles and preferences whilst saving yourself a few quid each month.

With phone prices skyrocketing in excess of £1,000 it’s no wonder that more people are holding onto their phones for longer. Many top of the range handset contracts can easily cost you £80+ a month. The problem is that these contracts are split into two segments - device and usage. Network providers often use a standard usage tariff which means that you can get the same amount of texts, minutes and data for much cheaper if you were to switch to a SIM-only.

In general, it’s usually cheaper to buy a product outright. Unless you plan on shooting slow-motion motion video in ultra-HD, the chances are you can get by with an older model at a fraction of the price. If you want to save even more, many manufacturers and sites sell refurbished versions of even the latest models. If you’re a bit sceptical about refurbs, most actually come with a warranty in the unlikely case that something should go wrong.

Switching providers can be one of the quickest and most effective ways to save money each month. Whether you’re shopping around for car insurance, broadband or energy, you can input your details in a matter of minutes and see exactly what you could be paying. More times than not there’s a substantial difference between the most expensive and cheapest deals on the internet. Making this part of your routine every time your contract is up for renewal will ensure that you’re never overpaying for your services.

In the UK alone, Cheaper Waste found that 6.7 million tonnes of food is wasted every year at a cost of £250-£400 per household. Prepping meals on a weekly basis is a win/win if you can get yourself organised. On one hand, by setting one day a week to prepare your weekly meals, you can reduce the likelihood of ordering take-away on the days that you don’t have the energy to cook. Simply put your prepped meal in the oven and it can be ready quicker than the delivery driver can get to your door. Food prep can also reduce your monthly shopping total as it prevents your food from going out of date, making sure you get your money’s worth from every ingredient that otherwise may end up in the bin!

There are loads of tax reliefs and benefits that you may not know about but could be saving you money. For example with the Marriage Allowance, you can claim if you earn more than your husband, wife or civil partner and they do not pay income tax or pay the basic income tax rate. By transferring a maximum of £1,260 of your personal allowance to your partner, you can reduce their tax by up to £252.

If you have children, you can benefit from Tax-Free childcare if your child is under the age of 11. You must earn at least the National Living Wage for 16 hours a week on average to be eligible, this must also apply to your partner if you have one. You can receive up to £2,000 a year for each child or £4,000 if they are disabled.

If you haven’t already seen our 7 Simple Heating Bill Hacks, we break down the easiest ways to reduce your energy bill each month. Some of the easiest methods include turning down your thermostat by 1 degree, prioritising heating in the rooms that you use and making sure you block out any drafts to prevent heat from escaping. With energy bills currently through the roof, just picking one of these tips can help knock a chunk off your heating bill and free up some money to put elsewhere each month.

Heating bill hacks

With all things considered, saving even just a little bit of money can go a long way. Starting off is always the hardest part and breaking the paycheque to paycheque cycle isn’t easy. Even if you just become slightly more aware of your spending, you can start to pick apart your outgoings and prioritise what means the most to you in your life. After all, life is for living and if you can put more money into just that, we see it as a job well done.

If you already own a residential property, you’ll be hit a little harder with your SDLT charge, to the tune of an extra 3% on top. That means second homes, holiday homes and buy-to-let properties will all land you with extra Stamp Duty to pay. If you’re living in Scotland or Wales, that extra charge bumps up to 4% instead.

The timing can be pretty important here. If your main residence is already sold by the time you buy a new one to replace it, you won’t get lumped with the extra SDLT charge. If you still haven’t sold your main home by the time you complete the purchase of your new one, though, you’ll technically own both properties at the same time. That means the extra 3% (or 4% in Scotland or Wales) will apply. However, there’s a wrinkle in the rules that could still save you money. If you manage to sell your old place within 36 months after buying your new one, you can claim a refund of the 3% charge you had to pay. There are a few other situations that can earn you that same refund, but they’re few and far between.

Another key question is whether or not you count as a UK resident for tax purposes. This can sometimes get tricky, but a lot depends on how much time you spend in the UK. If you’re abroad for at least 183 days of the 12 months before you buy a property, you won’t count as a UK resident for SDLT. In that case, you’ll generally be charged a 2% surcharge when you buy a residential property in England of Northern Ireland.

There are more resources out there to help with both money and mental problems than most people realise. They don’t all involve waiting on phone helplines or sitting through benefits assessments, either. In fact, some of the most effective resources could already be right on your doorstep.

The first step you take is always the most important, so reaching out to family or close friends can set you on the right path from the start. From there, once you’ve broken the silence and opened up the conversation, you could start looking a little further – like talking to your GP or a support worker. The most important thing to understand is that you’re not alone in this. For instance, there are peer support networks online where people share their experiences and the solutions they’ve found or tried. If your mental health load is becoming too much to carry, there are experts at the Samaritans (call 116 123) who can offer confidential support with no judgement or strings attached.

Read our guide on tax debt & mental health

Even though the table contains the tax rates for each income, it leaves out two crucial points for those earning over £100k in a year. For every £1 that you earn above this amount, your personal allowance will reduce by £2 until it’s diminished. Once you hit the £125k mark your allowance will automatically be set to £0 meaning that you’ll have to pay tax on everything you earn.

In real terms, anyone caught between £100k and £120k can actually be paying a whopping 60% in tax. You may earn £100k a year but with a bonus of £1,000 your total income is taken to £101k. That additional £1,000 will not only be taxed at 40% but will also knock £500 off your tax free personal allowance. This removal of £500 from tax will be charged at another 40%, leaving you with a meagre £400 from your £1000 bonus.

As you can see, even if you think you’ve got breathing space before hitting this threshold, it’s best to check if you’re inline for any big bonuses or commission before the end of the tax year. Many people don’t notice until they receive their tax slip and it’s too late to act.

Although there is no way of avoiding this 60% tax for £100k-£120k earners, there are ways to manage your income so that you can still make some changes to become more tax efficient. Pensions, workplace benefits, and charitable donations are all great ways to help you reduce your earnings to below £100k and prevent any reduction in personal allowance.

One route you could take is to use your pension contributions to take you under the £100k barrier. You’d essentially be sending some of the money that would’ve been heavily taxed to your retirement pot. Although you’d be taking home less money each month, you’d still be more wealthy overall because of the break in tax and the hefty pension waiting for you. It’s worth noting that you can only deposit a maximum of £40,000 a year.

Now if a pay rise is on the cards, you may want to check out what benefits your company offers as a trade off. Things like company cars and private healthcare can often make your life more comfortable without having to jump over the £100k barrier. These are usually given through a “salary sacrifice” scheme so it’s definitely worth asking about if you’re in line for an annual review.

If you’ve got a purchased life annuity, you’ll usually be taxed on it at the normal rate. If your income is below your tax-free Personal Allowance, you’ll be able to claim that tax back. Alternatively, you could ask for your annuity to be paid out without tax taken off.

To claim back the tax you’re owed, you’ll need a form R40 for every year you’ve overpaid. As always, there’s a hard limit of 4-years to get back what you’re owed.

If you want your annuity paid tax-free instead, you’ll send form R89 to your provider, or form R86 for joint annuities. Either way, keep in mind that you’ll have to alert the provider if your income ever goes up. If you start bringing in more than your Personal Allowance, you’ll owe some tax on it.

For pension annuities, you should get a P800 letter from HMRC if you’re owed any tax back. If you don’t get one and think you’re owed money, talk to HMRC.

Most likely, yes. The amounts you receive don’t normally cover everything you’re entitled to.

It is important to know that we deduct HDT or GYH allowances from any claim we make as both are paid non-taxed.

Use our Tax Refund Calculator to find out if you are owed anything from HMRC

If you live in married quarters, on or off base, and spend your leave periods there, it would normally be classed as your main residence. The claim in this case would be for any costs for travel between your married quarters and any temporary postings of up to 24 months.

If you already receive a Home to Duty (HDT) allowance for this already, we will review the amounts received against the allowable limits and claim for any shortfall.

Use our Tax Calculator to see if you are owed a refund from HMRC.

If you live on base part of the time but go home to another address for weekends or longer periods of leave, the leave address would be classed as your main residence.

A tax refund claim in this case would be for travel between your home address and your workplace.

If you already receive a Get You Home Travel (GYH) allowance for this, we will review the amounts received against the allowable limits and claim for any shortfall.

Use our Tax Calculator to find out if you are due a refund.

Yes this is very important as we need to have documentary evidence to support your claim.

Please ensure you keep a copy of each of your Assignment Orders for each base that you have traveled to. You can print these from JPA but please note these are deleted after 60 days.

See our checklist of the documents you will need to make a claim. We can help you get copies of anything you are missing if needed.

It will depend on the type of training.

HMRC has strict rules about what is classed as an allowable expense around training. If it was an essential part of your contractual duties of employment then we might be able to claim for the traveling expense.

You will need to have completed your phase one training to make a claim.

Even if you not due a refund this year remember that you can claim for the past 4 tax years so use our tax calculator to find out if you are owed anything.

To get a tax refund, HMRC says you need to be travelling to temporary workplaces. Reservists and Territorial Army personnel tend to spend most of their service in one place, which wouldn't qualify and is an example of when you wouldn't be able to claim an MOD tax refund.

That said, your circumstances might be different from most. Get in touch if you want us to look into it for you. It costs you nothing to find out where you stand.

Use our tax calculator to see if you are due a refund

Find out if you need to complete a Self Assessment Tax Return or if you can claim Flat Rate Expenses.

Yes. You are legally entitled to reclaim 24p per mile, which is the difference between the HMRC allowed rate of £0.45 per mile* and the MOD £0.21 per mile tax exempt allowance. To claim this, you must be on temporary duty. This is defined by the relevant HMRC legislation, not by MOD policy.

 

Ask RIFT about your specific circumstances if you are still unclear.

*HMRC EIM32080 Travel expenses: travel for necessary attendance: temporary workplace: limited duration, the 24 month rule.

Read the letter from the MOD about supporting tax refund claims.

Despite what some people are saying, MOD personnel really can get UK tax refunds. RIFT Refunds always knew this was true and we fought hard to get the proof. You can read the MOD letter to us and feel assured that this is something that can be legitimately claimed for.

Tax refunds for travel can be claimed, as confirmed in DIN ‘2015DIN01-005’ which has been issued to all service personnel to officially confirm this.

There has been a lot of confusion around tax refunds that RIFT has worked hard to clear up with both the MOD and HMRC.

Different interpretations of what is meant by ‘a temporary posting’ have caused this confusion. Some believed that individuals who claimed a tax refund on HDT were doing so in breach of HMRC rules. RIFT can categorically confirm that none of these potential situations can arise and this is confirmed by the MOD.

Some also thought that making any claim for a tax refund may mean the individual may have to repay rebated money in the future. Others also thought claiming a refund would jeopardise the whole tax exemption of the MOD HDT allowance, disadvantaging many service personnel.

Others were worried about changes to tax codes. Your tax code should not change due to a refund claim but any problems with your tax code are covered in our aftercare service which means we will get any errors fixed for you at no extra charge. Read more about tax codes and how to check if yours is correct.

DIN ‘2015DIN01-005’ has been issued to all service personnel to officially confirm that tax refunds for travel are claimable.

It also states that you can use an agent to make a claim for you. RIFT will act as your agent, providing an end to end service if you don’t have the time or are not comfortable dealing with the technical legislation set out by HMRC.

This supports the previous formal confirmation we received from the Ministry of Defence.

Just like anyone else, you're entitled to a UK tax refund for travel expenses to and from temporary workplaces. If you're making your own way from a UK residence, you could have a pretty big refund on your hands. Watch out, though - if your family has moved abroad with you, then your main residence might be outside the UK. In that case, you can't claim for your travel costs.

Find out everything you need to know about paying UK tax if you work overseas or get in touch.

Yes, if this is classed as your main residence.

The legislation for tax refund claims is based on costs for travel expenses on to temporary postings of under 24 months, even outside the UK, using either your own vehicle or public transport counts.

If you're in the Armed Forces and making your own way to more than one base, you can claim any overpaid tax on the cost of that travel for the last 4 years, and the RIFT average 4 year rebate is £2,500.

HMRC takes a big enough bite out of your pay already. Don't let them hold onto cash that's supposed to be in your pocket. Use our tax calculator to find out if you are owed anything back.





No, laundry costs are included in your annual personal allowance (i.e. the amount you can earn tax-free each year). This will be recorded in your tax code.

 

You may be able to claim if you have the receipt and it is in the last four tax years as it is a work related expense.

Use our tax calculator to find out if you are due a refund.

Yes, the cost of flying varies considerably so we need evidence of your actual expenses for HMRC. We can only claim for the actual flights you made, not the cost of any flights between two destinations.

Have a look at our checklist of the documents or paperwork we'll need for your claim.

You can download all your wage slips from the JPAC website.

Under HMRC legislation a posting that is more than 24 months is deemed permanent and therefore the temporary workplace rules don’t apply. However, we would review every case in isolation as we would need to understand your expectation at the outset of your posting.

As you can claim for the previous 4 years even if you have been at your current base for over 24 months you may be able to claim for previous postings.

Use our Tax Calculator to work out if you are due a refund.

We need the following information to assess your MOD tax refund and then hopefully process your claim:

  • List of bases you’ve attended - Copies of assignment orders are helpful here and are available from JPA, but be aware they are deleted after 60 days. Included in this list you should also include any time spent on courses as this can be claimed for as well
  • Monthly payslips – If you haven’t got all of your payslips, you can download them from the JPAC website
  • Other supporting documents – If you can, MOT certificates, P60s and P45s can also help your claim. Don’t worry if you can’t provide these though, we can still reclaim your tax without them

See our full document checklist and what to do if you are missing anything.

Other information – We’ll ask you a few simple questions about your financial circumstances e.g. if you have any other sources of income such as rental income, whether you have a student loan or a private pension that may affect your claim, your tax code or mean that you need to submit a self assessment tax return.

The MOD accommodation rules may also have an impact so we will need to understand your living arrangements. This helps us calculate the value of tax you’ve overpaid.

Use our Tax Calculator to find out if you are due money back.

Armed Forces uniform tax rebates are handled differently from most other professions. Generally speaking, your uniform maintenance costs are handled through your tax code. Basically, your tax-free Personal Allowance gets ratcheted up a few notches to make up for what you're shelling out.

The Pay As You Earn (PAYE) system generally does a decent job of keeping the tax most people pay under control. The problem is that HMRC won’t always have the information it needs to work out your tax bill correctly. When you’ve got work expenses like travel to temporary workplaces, the PAYE system tends to struggle. On top of that, a lot of your work expenses change over time. HMRC will tend to assume that your expenses stay the same year-on-year, and will sometimes change your tax code to account for them. This can lead to severe headaches when those expenses change - which is why you’re better off making full yearly refund claims and watching your tax code carefully.

Check your tax code

It’s easy to get set in your ways, particularly with things you rarely even think about. You already know what temperature you like your home to be, so you reach for the thermostat, set it and forget it. The thing is, if you’ve got all your radiators on full, you’re blowing through a lot of energy just to heat the rooms you’re hardly using. Consider turning a few of your radiator valves down – or even just shutting doors so you’re not spending needless money heating empty rooms.

While you’re at it, think about nudging your main thermostat down by just 1 degree. The chances are you won’t even notice the difference – at least until your energy bills arrive. Running your home 1 degree cooler could be worth an average of £55 a year off your energy budget.

Here's a few more bad habits to try break:

  • Stop leaving your household appliances on standby all day and night. Boom – you just saved yourself £35 a year with zero effort!
  • Stop running your dishwasher half-empty. Even if you end up only dropping the number of times you use the thing by 1 cycle per week, you just saved another £8 a year off your energy bills.
  • Do the same thing with your washing machine. Always make sure it’s properly loaded before you set it off. Again, you’re saving another £8 per year just by running your washing machine once a week less.
  • There really is no need to keep filling the kettle up to the maximum capacity line every time you boil it. All you’re doing is wasting energy. Only heat the amount of water you need for the job at hand. That alone will probably save you £6 a year. Just imagine what you’ll save by using the same trick when you run your bath.
  • If there’s no one in the room, there’s no need to leave the lights on. Simply remembering to flip the switch when a room’s not in use can mean an extra £11 in saved cash over a year.

Bank credit is similar to consumer credit in a lot of ways. The bank offers the chance to pay back what you owe in stages, with terms depending on your financial position. The bank will look at things like your statements and the value of any assets you own, which are often used as ‘security’ in the agreement.

As for what you actually get with a bank credit deal, we’re talking about anything from a mortgage or housing loan to a cash credit facility. Letters of credit (where a bank backs your payment to a seller), bank guarantees and discounted bills of exchange (where a bank basically buys a debt at a discounted rate) are also broadly lumped under the bank credit category.

 

There’s a fair bit of confusion about whether or not rechargeable batteries actually save you money. For one thing, you’re going to use a fair amount of electricity charging them up back, rather than swapping them out for a fresh set of regular batteries. What it comes down to is whether the price of those new conventional cells ends up higher than powering up a set of rechargeables. The bottom line there is, if you pick the right battery brand, you’re better off recharging.

Rechargeable batteries last a lot longer than conventional ones. Good quality rechargeables can handle 200 or more charges, so you’d potentially have to replace normal ones hundreds of times to match up. Yes, you’re using electricity to top up your flat batteries, costing you some money. However, you stand to save a lot more by not having to buy a new single-use battery every time one goes flat.

Of course, money isn’t the only thing that disposable batteries waste. A battery is a difficult thing to get rid of safely. Doing it right means taking them to a household waste recycling centre, or a shop that’s set up to collect them. Switching to high-quality rechargeable batteries isn’t just a money saver; it’s also a good way to bring down your carbon footprint and waste output.

Let’s start with your simple, beginner-level options for making money from home. They won’t get you rich quick, but they also don’t need any special skills.

  • Errands

Pick up people’s dry cleaning, mow their lawn. These kinds of odd jobs have been around for ages. But it’s now a digital marketplace - sites like TaskRabbit connect people who need odd jobs doing, with the people who are happy to do them. Some of this will require leaving the house - like picking up dry cleaning. But equally, it could be helping people with digital tasks - like helping write emails or making them a spreadsheet. So go check it out!

  • Paid surveys

We’re not talking about life-changing money here but some companies will reward you for filling out surveys. It is that simple - give your opinion, get paid! You won’t even need a laptop for this one - you can easily do it on your phone.

  • Pet sitting

Some people want their pets looked after in their own homes. But others will be happy to drop them at your place. There are a few well-known companies who’ll let you sign up online and then connect you digitally with pet owners - so get Googling!

  • Sell your stuff on eBay

If you’re just looking for some short-term funds, auction sites are a great place to start. Getting some unused items up for auction will also help you declutter your life, as well as giving you a short-term cash injection.

Selling on ebay? Watch out for the taxman

A lot of people like the idea of being their own boss, but don’t want to risk being self-employed as their only source of income. That’s how a lot of small businesses get their start, as second jobs for people who wok on the books elsewhere. This can be a great idea if you’re cut out for it, but you do need to keep your tax situation under control.

When you’re self-employed, even as a second job, you’ll need to get cosy with the taxman. That means registering yourself with HMRC as self-employed, getting set up for the Self Assessment system and filing yearly tax returns to report all your earnings, expenses and other key details.

Self Assessment comes with some specific dates and deadlines to hit, the most important of which is the 31st of January. Every year, this will be your deadline for filing your tax return paperwork, along with paying up what you owe.

Guide to UK Tax Returns

The other thing to know before setting yourself up as self-employed is that your National Insurance Contributions (NICs) wont’ magically take care of themselves any more either. You’ll have to pay what you owe for these when you settle up with the taxman each year.

The basic paperwork for your self-employed job will be a little different from your on-the-books work, too. You won’t have a regular payslip sent to you, for one thing. That means you’ll have to keep a tight set of records covering all the money flowing into and out of your business. Self Assessment tax returns are a huge topic in themselves, so make sure you have a good understanding of what’s involved before diving in.

So, are you an on-the-books employee with a self-employed side gig or a small business owner who moonlights PAYE for someone else? Generally, it’s probably best to class your “main job” as the one that brings in the most money. Either way, you’ll be paying a year in arrears for your self-employed work. That means, for example, that the profits your self-employed business made in 2021/22 will factor into the eventual tax bill you’ll pay up by the 31st of January 2023. This is something that trips up a lot of people when they’re new to Self Assessment. Instead of the tax trickling out of your pay each month through the PAYE system, your self-employment tax for the entire year will all fall due in a big lump. Tax years run from the 6th of April to the 5th of the following April, though, so you’ll know 9 months ahead what you’ll have to cough up.

Important financial dates & deadlines

One of the most important things a good adviser will do is make sure you’re not paying more tax than you need to. The right kind of specialist will protect your money by helping you make the most of all the tax relief and deductions you’re entitled to. At the same time, they’ll protect you by making sure you’re keeping within the various tax rules.

Another thing a specialist adviser can offer is the reassurance of getting your tax paperwork handled accurately. Getting caught in the spotlight of an HMRC investigation is bad news, and can lead to fines and penalties – or even a criminal record! A good specialist will help you keep your tax documents spotless, even when dealing with the most complicated areas of the rules like reporting multiple sources of income.

Beyond that, a specialist tax consultant will make planning out your finances a lot easier and safer. Tax planning is an ongoing process throughout the year, and some of the biggest decisions need to be made well in advance. A tax consultant who understands your situation will help you scout out the financial road ahead for opportunities and obstacles alike.

Finally, talking to a tax adviser is a great way to save time and boost your peace of mind. Taking care of your taxes can be stressful and time-consuming. Just knowing your money’s in good hands can free you up to focus your attention on the things that really matter to you.

Are financial advisors worth it?

Taking out a bond is like making a loan to a business or government (government bonds are also known as gilts). In return for your investment, you get a steady income in the form of interest payments for the duration of the bond. At the end of the term, you get your initial cash back. In terms of risk, bonds are generally considered pretty safe investments to make. As usual, though, that does tend to mean that the returns are comparatively lower. If you don’t feel like going it alone in a fixed-income bond, you can buy into collective investments like unit trusts.

It’s worth stressing that investing in bonds is very different from buying shares in a business. All you’re doing is lending the organisation your cash in return for interest payments. You won’t get a stake in the company itself this way. On the other hand, bonds can be a safer bet if business goes badly. If the company were ever made insolvent, for instance, you could still lose your money like a shareholder. However, since you’re counted as a “creditor”, you stand a decent chance of getting at least a big chunk of your investment back.

You can buy company bonds from the London Stock Exchange’s Retail Bond platform, with a minimum investment of just £1,000. For gilts, you can go straight to the government’s Debt Management Office.

Before you calculate how much a house will cost, you need to know how much you can borrow. We all have a dream house. However, since the financial crash in 2009, new laws set by the UK’s Financial Conduct Authority (or FCA) mean that in most cases, banks will only be able to lend you up to 4.5 times your income. This can vary depending on a number of factors such as your credit score or if you’re buying with another person.

Most banks will offer a mortgage calculator tool. This allows you to input your income with other financial information to figure out the maximum that you can borrow.

Mortgage calculators will often use something called a “soft credit search”. These will not impact your credit score which is important if you are looking to borrow money. A better credit score can lead to better rates when taking out a loan - making it cheaper in the long run. It’s best to check that the calculator you are using only involves a soft search. Some may leave a hard search on your report, and if too many of these are used in a short space of time, you may end up affecting your credit score.

Online calculators are not the only way to find out how much you can borrow for a house. You can also use a mortgage advisor to work out this amount for you. However, some advisors can only offer certain products or providers when comparing deals. In order to see all of the offers available on the market, you’ll need to make sure you go with an Independent Mortgage Advisor. If you’re unsure if an advisor is independent or not, make sure to ask as they are legally required to tell you.

Whatever method you choose will give you an estimate on how much a bank is willing to lend you. This means you can now work out how much of a deposit you want to put down.

  • Stop leaving your household appliances on standby all day and night. Boom – you just saved yourself £35 a year with zero effort!
  • Stop running your dishwasher half-empty. Even if you end up only dropping the number of times you use the thing by 1 cycle per week, you just saved another £8 a year off your energy bills.
  • Do the same thing with your washing machine. Always make sure it’s properly loaded before you set it off. Again, you’re saving another £8 per year just by running your washing machine once a week less.
  • There really is no need to keep filling the kettle up to the maximum capacity line every time you boil it. All you’re doing is wasting energy. Only heat the amount of water you need for the job at hand. That alone will probably save you £6 a year. Just imagine what you’ll save by using the same trick when you run your bath.
  • If there’s no one in the room, there’s no need to leave the lights on. Simply remembering to flip the switch when a room’s not in use can mean an extra £11 in saved cash over a year.

The most important first step you can make is to give yourself a clear picture of where you’re money’s going each month. If you’re looking to find ways to save cash, you need to spot the leaks in your wallet first.

One of the most useful hacks for this is what’s called the “zero-based” or “zero-sum” budget. It’s simpler than it sounds. First, figure out exactly how much money you’ve got coming in, regardless of where it’s coming from. Once that’s done, look at where all that money’s going. Start with the stuff you really can’t control, like rent or mortgage payments, before moving on to your “optional” spending. Finally, don’t forget to take any cash you’re saving into account. A lot of people miss this step, but remember – every penny goes somewhere, even if you save it.

If it’s sounding like hard work already, remember that there are loads of free apps designed to make it simpler. At this point, the goal is to get organised so you can make better decisions later. 

What you should be saving according to your salary

Well, okay. Maybe “exciting” isn’t quite the right word, but the humble spreadsheet is still one of the most effective ways to get your budget working for you. If you don’t already have one you’re comfortable with, there are plenty of spreadsheet options on offer. A lot of them even have built-in templates specifically for managing a budget. Microsoft Excel and Google Sheets, for instance, have a range of set-ups to help guide your budget-building in the right direction.

The main thing to realise up-front is that setting up a spreadsheet to handle your budgeting really isn’t nearly as difficult as it might look. You won’t need to study up and become a qualified computer geek to stay on top of your financial plans. What you will have to do, though, is make a few basic decisions from the outset.

The first thing you’re going to want to do is choose whether you’re making a weekly budget or a monthly one. Basically, this is going to come down to the way you’re paid. Weekly budgets make more sense if you’ve got weekly wages than if you’re paid at the end of the month, for instance. If that sounds obvious, it probably is – but remember that it might not just be your own finances you’re budgeting around.

 

That brings us neatly to the next thing you’ll need to consider. Is the budget you’re making only going to include your own income and spending? If there’s another earner in your household, it’s a pretty good idea to include their information in a combined budget. This, naturally enough, could easily effect your decision about budgeting weekly or monthly. If your partner’s paid by the week and you’re paid by the month, for example, it might make sense to make your budget a weekly one.

With those initial decisions squared away, it’s time to start entering the key details. The first things to look at here are your bank statements, whether you get them on paper or digitally. Your statements are some of the most important budgeting tools you’ll ever have, so it pays to keep track of them.

Most of the information you’ll need can be found here. Note down all the income covered in your statements, wherever it comes from. What you’re really looking for here is the money coming in that you can count on regularly. We’re talking about wages, pensions, rent payments (if you’re making any extra cash by letting out a room or property) and any benefits you’re getting. If you’re self-employed, on a zero-hours contract or have an irregular income for any other reason, this can sometimes be a challenge. In that case, you’ll often find your best bet is to average out your income over 3 to 6 months’ worth of bank statements. Once again, your banking paperwork comes to the rescue!

Now let’s take a look at the other half of your budget: your regular spending. Start out with the costs that you really can’t do too much to bring down. We’re talking about your rent or mortgage repayments, Council Tax and other essentials like energy and water (although there are a few ways to help with those – see our guide, “6 Easy Ways to Save on Gas and Electric Bills” for more). Once you’ve got those sorted, move on to your other regular expenses, like transport costs (whether that’s petrol, public transport tickets or both), grocery bills and any medical costs you’ve got, like prescriptions or private health insurance payments.

Next up, give some thought into the spending you’re doing on a less regular basis. This is where you record the cash you spend on one-off emergencies, repair bills and so on. This kind of spending can be difficult to account for – but again, averaging the numbers based on what you’ve splashed out in previous years is a good start. For costs that crop up only once a year or so, feel free to divide them by 12 when you slot them into your monthly budget, to keep things nice and simple.

How to save money on your energy bills

That’s pretty much your basic budget in a nutshell. The important thing now is to make good use of it. This is going to sound pretty obvious, but the main goal is to keep your spending lower than your income. If you can’t do that, then you’re going to be running up debts over time. When the balance of your budget seems to be tipping that way, it’s time to start looking for ways to either boost your income (like renting out an unused room, for instance) or to cut back on your spending. Look a little closer at those expenses you’ve been recording to see if there’s anything you could prune back enough to balance things out.

If you can get yourself into a position where you’re spending less than you’ve got coming in, you can start planning out a strategy for saving money. Again, your budget is a great help here. The trick to saving is to make a habit of it. Putting a little aside every month is generally a lot better than dumping in a big chunk of change only once in a while, particularly when you’re trying to plan ahead. The more consistent you are with your saving, the easier it’ll be to see it stack up - even if the monthly amounts aren’t huge. Most importantly, remember to include your savings in your budget spreadsheet. That aim is to record where every penny of your income is coming from and going – whether it’s spent, saved or given away. It’s called a “zero-based” budget, and it’s an incredibly valuable tool.

Free budget planner

To get you started on your budgeting journey, we've produced a free and simple budget spreadsheet that uses the 50/30/20 rule to help you take control of your finances without a lot of hassle.

  1. Enter your total yearly income, credit card balance, annual loans (including mortgage repayments) and any assets you have into the boxes.
  2. Check the ''Each month...'' box to see what you should be spending and saving from your total earnings.

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Building a budget is about making predictions. Just like an employed person with a regular income, you need to understand where your cash is coming from and how reliable it is. For the self-employed, one of the simplest ways is to base your average expected income on what you earned in previous months. You won’t be able to predict every little bump in the road or unexpected bonus this way, but the longer you keep it up, the more accurate your predictions should tend to be.

While you might not be able to predict or control every penny you’ll have coming in from month to month, there’s a lot you can do to keep your costs in line. When you make a budget, you’re trying to account for where every penny you’re earning goes – whether it’s spent, saved or given away. That means it’s every bit as important to track your spending as your income.

Naturally enough, there will be some essential costs you’ve got no way of bringing down. Others, however, might be a bit more flexible. Just to pick one of the more common things self-employed people overspend on, take a look at your broadband package. It’s easy to assume you need a top-tier superfast service, but if all your business needs is email and maybe decent video conferencing, you might be paying too much to get online. Even if you don’t want to slim down your service, you might still find a better deal on a similar package if you’re prepared to scout around a bit.

So, armed with a clear picture of what you’re spending each month to keep the lights on and a good estimate of your expected income, it’s time to turn that information into an actual budget. The good news is that you’ve already done most of the hard work!

Having regular bills and irregular income needn’t stand in your way too much here. You’re already used to working with averages, so you’ve probably got a decent idea of your annual income. You’ve checked through your regular bills, so you know what your unavoidable yearly “overheads” like electricity and internet access are costing you. Working out what percentage of your total income is being taken up by these essential expenses will tell you what you need to set aside for them each payday.

So that’s the job done, right? Well, not exactly. Bills have a nasty habit of sneaking – or rocketing – up over time, so each year you’ll need to readjust your calculations a bit. The whole point of budgeting is to keep your cash flow healthy over the long term, so working from up-to-date figures is a must. If there’s an unavoidable price hike on the horizon, make sure you’re putting aside enough money now to cope with it later.

Budgeting for beginners

The yearly Self Assessment tax returns you have to file when you’re self-employed can easily trip you up if you’re not prepared. Leaving your planning for how to pay up what you owe until after you’ve already filed your return is a dangerous road to walk down. It’s all too easy to get lumped with a tax bill you can’t pay at the end of the tax year, or payments on account that you haven’t got the cash flow to cover.

Luckily, since you’re already used to estimating your annual income, you should already have a good idea which tax bands you’ll be dealing with. If you know you’ll only be paying at the basic rate of 20%, for instance, you’re in a decent position to prepare by setting aside 20% of your earnings as they come in. That’ll keep your Income Tax covered – but there’s still more to pay!

We know, it sounds nightmarishly complicated. In practice, though, it’s all calculated automatically when you file your Self Assessment tax returns online. The main point is to keep your National Insurance situation in mind throughout the year, because Income Tax isn’t the only way HMRC dips into your pocket.

Guide: Self-assessment tax returns

Cash flow crises can be incredibly dangerous when you’re self-employed, with the money flowing through your business getting choked off by late-paying customers, unreliable suppliers or unexpected costs. Even the best-prepared business will sometimes find it didn’t bring in as much money in a month as it expected. That’s what a rainy day budget is for. A good rule of thumb is to aim for an emergency cash stash that’ll tide you over for at least 3 months of your basic living expenses. It sounds like a bit of a hill to climb, but you don’t have to reach the top all at once. Just keep socking a little away regularly until you hit the summit. You might never need to fall back on your rainy day fund, but you’ll be glad of it any time you’re struck with a short-term financial disaster.

It’s not always essential to have a dedicated business account when you’re self-employed. If you’re a Sole Trader, for instance, you might be keeping your finances simple by just using your personal bank account for your business cash. However, a separate account can be a useful thing to have when you’re keeping a close eye on how your business is doing. It’s not always easy to get a clear picture of your work finances with your personal money cluttering up the numbers. When you make payments for essential work expenses, for instance, they can bring down the profits you’re being taxed on in your Self Assessment paperwork. Keeping those finances separate makes it a lot easier to tell your allowable expenses from your personal spending so you don’t miss out on the tax relief you’re owed.

With Self Assessment, it’s incredibly important to understand the connection between the money you’re spending to stay in business and the tax you owe. If you’re not letting the taxman know about all your allowable expenses, you’ll end up pouring much more than your fair share into HMRC’s pockets. Anything from professional clothing and equipment to work travel, meals and accommodation can count toward the tax relief you’re owed – but it all depends on your situation. For example, if you use the same phone for work and personal calls, only the money spent on business use can count against your taxable profits for Self Assessment. It can take a bit of legwork to make sure you’re claiming for every eligible cost, but it’s really worth getting it right. Self-employed people without a lot of business expenses to claim for in a year can actually simplify things a lot by claiming a tax-free trading allowance of £1,000 instead of working out all their allowable costs.

Keep checking back here for more money tips and updates. We’re experts at saving you cash and we’re always here to help. That’s the reason why you’re better off with RIFT.

Let’s take the biggest step first. If you’re planning on moving out, getting control of your finances is Job One – and that means making a budget. Don’t worry; it’s a lot less scary than it sounds. You’re not going to need to become an expert accountant overnight. All you have to do is paint yourself the clearest, most complete picture you can of the cash you’ve got coming in and going out, then use that information to make a plan.

One of the best ways to do this is to draw up a “zero-based” budget (sometimes called “zero-sum” budgeting). All this really means is listing out every penny of your regular income, no matter where it comes from, and every penny going out, whether it’s spent, invested, saved or just given away. You can read more about zero-based budgets in our other guide, 4 Fixed Income Saving Strategies – Combine to Win!

So, with your zero-based budget all mapped out, what can you do with the information? Well, for starters, it’ll make it a lot easier to get into some great saving habits. When you’re putting away your spare cash, little and often’s usually a lot better than dumping in larger amounts at random. With the information from your budget, you should be able to set yourself up a “50/30/20” system. Basically, each month, you set aside 50% of your income for essential expenses, 30% for fun stuff and 20% for savings. The trick to it, of course, is keeping the consistency up. Whatever you’re saving toward, though, building good habits from the outset can make a huge difference to your overall finances.

Free budget planner

You’ve probably heard of budgeting before. But what does it really mean? It’s the act of getting all of your income together and putting it against your outgoings. Once you’ve done this, you can start to see where your money is being spent and can make more informed decisions.

Without a budget, you’re spending blind. The danger of this comes when you’re spending more than you actually earn and fall into debt.

Think of your income as water coming from the tap - and your outgoings as leaks. The more you spend on one thing, the more money escapes from your income stream. Identifying where you’re spending can help you plug any holes, helping you reallocate money to where you really need it.

Free budget planner

Getting organised with your money is the first step in budgeting… and it doesn’t take as long as you might think. Arm yourself with a notepad and pen or a spreadsheet depending on what works best for you - and block off a day to go through your spending.

In terms of paperwork, the more information you can get (your hands on), the better:

  • Payslips
  • Bank statements
  • Credit card bills
  • Household bills
  • (And) Savings and pension contributions

As you spend different amounts of money at different times of the year, going back 12 months will give you a better idea of your spending all year round. For instance, you might spend significantly more around Christmas than in January.

Thankfully, most of this information can be found online, so you won’t have to go digging around for paper copies.

To make sense of all these numbers, there are loads of free budgeting spreadsheets with inbuilt formulas to do all the calculations for you. Some may be really simple and some have more detailed sections about monthly outgoings. Simply pick one that (best) suits your needs - you can always rename certain sections if there’s no perfect match.

Before we get into working out the numbers, make sure you hit the subscribe button below. That way, you can stay up to date with the best ways to make your money go further…because you’re always better off with rift! Now that’s done, let’s get to the fun part - working out what you have to play with.

We all wish we could take home our entire salary. Unfortunately, that’s not the case. When working out your budget, it’s important to use your income after all deductions are taken out. That includes tax, national insurance, and pension contributions.

If you used your pre-tax salary, you’d end up with a number much larger than what actually goes into your bank account. That may look great on your spreadsheet, but it could lead to spending more money than you have.

The best way to look at your income is to add up all of the amounts on your payslips and divide it by the number of months they’re from. This way you’ll get an average that you can expect to take home each month.

For those with big differences in their pay, you may want to be a bit more cautious as some months may fall short of this figure. You might be best trying to save additional money from the higher paying months, so that you can make up the rest on the lower-paid months.

So we’ve worked out how much is coming in. Now it’s time to calculate what’s going out. This can be split into two categories - essentials and non-essentials. Essentials are everything that you need to live. These include:

  • Mortgage or rent
  • Household Bills
  • Food Shopping
  • Transport
  • Credit cards
  • AND Work-related expenses, like travel

It’s likely some costs - like household bills and food - will change every month. So, work out an average to get a rough idea of how much you spend on each.

Once you take away this essential spending from your income, you’ll be left with a figure that’s called your disposable income. As this section is the most likely to fluctuate, it’s definitely worth breaking it down.

Some examples might include:

  • Gym membership
  • Streaming services
  • Eating out
  • AND Socialising

Now all your money’s accounted for, you’re much better equipped to make judgements on your spending. For instance, if renting is taking up a huge chunk of your income, you could set an ideal amount before looking for new properties. This way you can set a cap to ensure you’re spending an amount you’re happy with.

As mentioned earlier, some months may be more costly than others. Yes, we’re looking at you Christmas. However, with enough time you can budget for this. If you know you’re likely to spend £300 at the end of the year, you can always put this into your budget. Simply divide £300 by 12 months and put that into your outgoings. By putting £25 away each month, you’re less likely to feel the shock in December than if you had to pay it all in one go. This method works for pretty much anything - from MOTs to holidays.

If your outgoings are more than your income, you may want to put your spending habits under the microscope so you don’t go into debt. If this is the case and money is a concern for you, it’s best to speak to a financial advisor. Several charities also offer free advice.

And remember, these are just the basics of budgeting to get you started. It’s important to revisit your spending every month to keep up-to-date with where your money’s going.

When you commit to saving, you’re making a potentially critical investment on your own future, so starting young makes sense. Your early decades are a great time to get to grips with things like pension planning and basic budgeting. The trouble is, this isn’t usually the kind of thing they dig deeply into at school. Most of us are pretty much left to educate ourselves on simple money management. When you’re 21, pensions can seem like such a non-issue that they’re hardly worth learning about – much less paying into. However, having even just a rough idea of how the system works can be a major leg-up when you start working and building up a pension of your own.

So how do you kick-start some good savings habits? Well, the first thing to do is open up a spreadsheet. Don’t worry – that’s about as scary as this is going to get. We’re not expecting you to become an instant financial expert. Just open your sheet and start recording what you earn each month in it. When you spend money, make a note of that too. Pretty soon, you’ll have the makings of your first real budget plan laid out.
Remember that the small details matter. Every amount you’ve spent, no matter how small, goes into your spreadsheet.

Remember to record what it was you spent it on, too. You’ll quickly get a clear picture of where all your cash is going – and that’ll be important when you start to plan your saving.

Free budget spreadsheet

  • Work out exactly how much you’ve reliably got coming in each month, after tax. That includes all your sources of income, along with any tax credits or similar things you might be getting.
  • List out your basic outgoings, whether they’re bills, direct debits or anything else you’re spending regularly.
  • Separate your outgoings into essential and non-essential spending, then cancel or cut back on anything you can do without. That means and streaming subscriptions you’re not using, any gym memberships you’re not getting good value from and so on.

No, absolutely not! There are lots of everyday work expenses that entitle you to tax relief, but so many people just don't realise they qualify. Small tools from hairdressing scissors to masonry drills can count for a rebate claim, as can any required licences or professional subscriptions. This is a huge and often misunderstood area of tax law.

One of the biggest tax rebate issues is travel to temporary workplaces, but anything from visas to vaccinations can count. Understanding what you can claim for (and, just as importantly, what you can’t) is the key to maximising your tax refund claims while staying on HMRC’s good side.

Tax rebates are a really tricky area, which is why so many people decide to get professional help with them. The basic idea is that when you have to spend money to do your work, some of your costs can be used to bring down your tax bill. That said, the regulations are complicated, and you can get into serious trouble if you mess up. Not claiming back everything you’re owed is painful enough. Claiming too much is a whole lot worse once HMRC catches on.

What's a tax refund?

There are a lot of reasons why you might be owed some tax back, but the main one is generally work expenses. Travel to temporary workplaces, repair and replacement of any essential gear and a whole range of other everyday costs can build up into a decent tax refund claim.

When HMRC works out the tax you owe, it assumes you’re working regularly throughout the year. If you’re a student doing casual or short-term work, though, you could end up paying too much tax. Basically, a holiday job could see you only being paid for a couple of months, but charged a whole year’s worth of tax. Worse yet, you’re probably still under your Personal Allowance for the year, so you shouldn’t have been taxed at all!

Luckily, whatever the reason you’ve paid too much, you can claim a tax refund to settle up. You can generally check your tax and claim your refund online - but again, a lot of people prefer to get professional help. Claiming refunds properly means keeping track of a lot of paperwork, from the official documents you get from your employer to receipts and invoices for your expenses. You can find the official tax checker here: https://www.gov.uk/check-income-tax and the refund tool here: https://www.gov.uk/claim-tax-refund.

One of the problems with dealing with HMRC is the amount of jargon they use. Ask the taxman about Capital Gains Tax, for example, and he’ll flood your ears with talk of “disposing of chargeable assets” and other confusing terms. Basically, what we’re talking about here is a tax on the profit you make when you sell, swap or give away something that’s gone up in value since you bought it. It even counts if the “asset” got lost or damaged and you claimed compensation for it.

The trick to getting your head around Capital Gains Tax is to understand that it’s the profit you make that matters. That’s what you’re paying tax on, not the full amount of money you got for it. So, to put it in real terms, let’s say you bought a work of art for £5,000. You held onto it for a while, then sold it on for £25,000. Your total “chargeable gains” (the amount you’ll actually pay the tax on) come to £20,000, since that’s the overall profit you made on the deal.

Capital gains tax: Where do I start?

When you boil it down to the basics, Capital Gains Tax (CGT) isn’t all that complicated. At its simplest, it’s just the tax you owe on your profits when you sell something that’s gone up in value since you bought it.

Keep in mind that it really is just the profit you make when you dispose of an asset that counts for Capital Gains Tax, rather than its entire value. The amount you originally paid for it makes a huge difference to the tax you owe. The more it cost you, the less profit you made (and have to pay tax on).

All clear as crystal so far, right?

Well, not quite. While those are the bare bones of it, there’s a fair bit more to know about Capital Gains Tax. For example, you don’t technically even need to sell your “asset” to end up paying tax on it. Capital Gains Tax can hit you any time you “dispose” of something it applies to. That can mean when you swap it for something else, give it away or even claim compensation for it if it gets lost or stolen. All of these situations can count as disposing of your asset.

So what exactly is an “asset” for Capital Gains Tax? In general terms, if it’s a physical, movable thing that’s worth at least £6,000, then it probably counts as an asset. That could mean artwork, jewellery, or even book collections and wines. There’s an exception for privately owned cars, but other kinds of vehicles can still count for the tax.

If you dispose of property that’s not your main home then you’ll probably owe Capital Gains Tax on your profits. In fact, if you were using your main home for business or letting it out, even that can count for the tax. The same goes for any shares (unless they’re in an ISA or Personal Equity Plan) or business assets you dispose of.

Anything with an expected lifespan of 50 years or under will generally be exempt, but the rules can get fiddly here, so it’s probably best to get professional advice if you’re not sure where you stand.

Like a lot of UK taxes, there’s a threshold you have to hit before you start owing anything on your capital gains. For the 2021/22 tax year, for instance, there’s a tax-free allowance of £12,300, or £6,150 for trusts. If your overall profit from disposing of assets ends up below this amount, you won’t pay any Capital Gains Tax on it.

If you’re married or in a civil partnership, then the rules for Capital Gains Tax have a little flexibility in them. In fact, unless you were separated and not living together at all during a tax year, you won’t pay any Capital Gains Tax if you “dispose of” an asset to them. At least, not unless you did it so their business could then sell it on.

Watch out, though – your spouse or civil partner could easily still get hit with Capital Gains Tax if they later dispose of the asset. If that happens, the rules work in the usual way. They’ll pay tax if they sell the asset, swap it, give it away or claim compensation for it. In this case, the profit they pay tax on will be based on the amount you originally paid for the asset, compared to the value they dispose of it for.

There’s another general exemption for Capital Gains Tax on items you give to charities. However, a wrinkle in the rules means that you could still have to pay CGT if you sell the item for less than its market value (but still make a profit compared to what you paid for it). Again, talk to a trusted professional if you’re not 100% sure whether you need to pay Capital Gains Tax or not.

When you pay Capital Gains Tax, the rate you’re hit with depends on the highest tax band you fall into. Basic rate taxpayers, for example, pay a percentage based on the size of their gains (their overall profit), their taxable income and whether or not the gains come from residential property. We know, that sounds complicated – and it definitely can be.

  • First, you work out what your total taxable income adds up to, meaning your earnings minus your tax-free Personal Allowance and any other Income Tax relief you qualify for.
  • Next, you calculate your total taxable gains, minus your Capital Gains allowance. Remember that this is separate from your Income Tax Personal Allowance.
  • Add your total taxable gains to your taxable income. If that amount is still in the basic rate tax band for Income Tax, you’ll pay 10% Capital Gains tax on your profits from disposing of assets. However, if any of your gains are from residential property, you’ll pay 18% on those instead.
  • If you’re in the higher rate tax band (before or after you’ve added your taxable gains to your taxable income), then you’ll pay 20% Capital Gains tax instead, or 28% on residential properties.

One bright side to the Capital Gains Tax system is that it cuts both ways. If you make a loss from disposing of assets, you can report it to HMRC to deduct it from your total taxable gains for the year. These are called “allowable losses”. You can actually report losses like this for up to 4 years after the end of the tax year when they occurred. Obviously, if your losses from disposing of assets mean your total taxable gains drop below the tax-free allowance for CGT, you’ll end up paying no tax on them.

If you want to learn even more about Capital Gains Tax – particularly how it compares and overlaps with Inheritance Tax, check out our other article, “The Difference between Inheritance Tax and Capital Gains Tax”. In the meantime, keep checking back here for more money tips and updates. We’re experts at saving you cash and we’re always here to help. That’s the reason why you’re better off with RIFT.

Now let’s move on to Capital Gains Tax. Basically, this is a tax on the profit you make when you sell something that’s gone up in value since you got it. Obviously, there’s a little more to it than that, but that’s the main principle. For instance, technically, you don’t even need to sell the thing to wind up paying Capital Gains Tax. Giving it away, swapping it for something else or even getting compensation for it if it’s been lost or broken can all count as “disposing of the asset” and mean owing some tax.

When you dispose of an asset, assuming you made a gain on it, the amount of tax you pay depends on your own marginal tax rate. For properties, basic rate taxpayers pay 18% Capital Gains Tax, while higher rate payers are charged 28%. For other kinds of asset, it’s 10% for basic rate taxpayers and 20% for people in the higher rate band. As with many kinds of taxes, though, there’s a tax-free allowance before you start paying – in this case, £12,300 (as of 2021/22). If the assets are owned by two people their allowances can stack, effectively doubling the tax-free threshold.

  • First, you work out what your total taxable income adds up to, meaning your earnings minus your tax-free Personal Allowance and any other Income Tax relief you qualify for.
  • Next, you calculate your total taxable gains, minus your Capital Gains allowance. Remember that this is separate from your Income Tax Personal Allowance.
  • Add your total taxable gains to your taxable income. If that amount is still in the basic rate tax band for Income Tax, you’ll pay 10% Capital Gains tax on your profits from disposing of assets. However, if any of your gains are from residential property, you’ll pay 18% on those instead.
  • If you’re in the higher rate tax band (before or after you’ve added your taxable gains to your taxable income), then you’ll pay 20% Capital Gains tax instead, or 28% on residential properties.

With car insurance, the amount you’re expected to pay is based on how safe your insurer reckons you vehicle is in your hands. When they make their calculations, they’re looking at how risky it is to insure you. The less safe they feel, the higher your premiums will be. Partly, it’s about how likely they think you are to have an accident – but there’s actually a lot more to it than that. Let’s take a look at some of the main “risks” they’ll be weighing up.

One of the first things your insurer will look at is your age. It might seem unfair, but younger people are basically always asked to pay more for their car insurance. It’s not just prejudice, though. There’s actually a bit of science behind it. If you’re in the 16-24 age bracket, you’re flat-out more likely to get into a road accident than any other group. It’s such a glaring red flag in the statistics that people are coming up with ways to bring that perceived risk factor down. You see that with things like telematics “black boxes” installed in cars (or on phones, in some cases) to track how safely you drive and adjust your premiums around that.

Another big risk calculation insurers make is your location. After all, insurance isn’t just about accidents. Your insurance price will include an assessment of the vehicle crime rates where you live and where the vehicle’s stored. It’s kind of a postcode lottery, where lower crime rates will generally mean lower premiums. There are still a few things you can do to knock your risk levels down a notch or two, though. Keeping your car in a locked garage can help put an insurer’s mind at ease, for a start. If that’s not possible, even getting a good immobiliser can make a difference.

It might seem strange that the kind of work you do can have an impact on your car insurance prices, but it makes sense if you think like an insurer. If your job sounds like it involves a lot of road use, you can often find yourself paying more. In fact, even the same job can sound very different to an insurer if you use different words to describe it. Describing yourself as an “editor” rather than a “journalist”, for instance, has been known to affect insurance rates. To an insurer, an editor sounds like someone who sits safely in an office all day. A journalist, though – that’s someone you can imagine taking risks in dangerous places. In real terms, they might be doing the exact same job – but which do you reckon gets the better offers on their insurance?

Okay, now let’s look at your vehicle itself. The kind of car you drive can make a pretty big difference to its insurance group – and therefore to the rates you pay. An expensive car, for instance, can mean high-cost repair bills and replacement parts. That’ll pump up your premiums fast. Older cars, perhaps surprisingly, can also fall into this trap, simply because they’re often considered to be less secure against theft or break-ins.

So that’s the basics of your risk calculation handled – but what kind of cover are you actually buying? Obviously enough, the more kinds of mishaps your insurance covers, the more expensive it’ll wind up being. Comprehensive cover, living up to the name, protects you against more or less anything. Third Party Only, on the other hand, doesn’t really protect you at all. It only protects other people against you. That’s basically the minimum insurance you can legally drive with. In the middle, though, we find Third Party, Fire and Theft cover – which is more or less self-explanatory.

When your insurer works out your rates, they’re naturally going to want to know about your car use. Basically, the more use you get out of your vehicle, the higher the risks. If you drive for pleasure as well as business, for example, you’ll pay more than someone who only uses their car for work. If your work racks up a lot of mileage or hours on the road, that’ll factor in too.

Next up is your excess. This is basically the amount you’re expected to kick in before your insurance claim starts paying out. It comes in 2 basic flavours: compulsory and voluntary. The compulsory excess built into your insurance plan is decided directly by your insurer. Whenever you make a claim, you have to pay this much up-front before you get anything from your insurance. With a voluntary excess, you get a say in how much you pay before your claim takes up the slack. The higher you set that, the less you’ll get out of your insurance – but the less you’ll usually pay in your premiums.

Finally, there’s another, more general category insurers will consider. Things like how clean your driving record is, for instance, can make you seem like a better or worse insurance risk. Also, having other specific drivers can change your costs, depending on who they are. Most of the time, adding extra drivers to your policy will tend to ramp up your “threat profile”, along with your insurance payments. However, if you’re a young driver, adding an older, more road-tested person to your policy can actually bring your prices down.

If you understand the way an insurer thinks, and have a decent strategy going in, there’s quite a lot you can do to bring down your car insurance costs. Probably the most obvious thing is not to blindly take the first offer you see. Price comparison websites are probably the most efficient way to start. Just plug in your details and you should get a pretty good idea what the competition’s offering before you dive in. Watch out, though, comparison sites sometimes work more like “marketplaces” than strict apples-for-apples evaluations. The same insurer won’t necessarily post the same prices on every site, so it’s worth checking more than one.

How to use price comparison sites

There’s also a timing issue to keep in mind. You can buy your insurance up to 29 days before the start date, so leave plenty of time to scout the territory in advance. That way, you won’t end up having to make a hasty decision you’ll regret later. It can actually affect your risk level in the insurer’s eyes, too. Generally, if you start sniffing around for quotes about 3 weeks before your actual renewal date, you’re likely to look like a safer bet than someone who only checks at the last minute. Insurers like drovers who think ahead, and they get nervous if it seems like you’re the “just-in-time” type.

Like any other important purchase or contract, it pays to look closely at the details. Don’t trick yourself out of your cover by not understanding the strings attached or following the conditions. Check for things like whether you need to have a telematics device (those black boxes we talked about earlier) or something similar to get the prices you want. You might find your great price relies on you keeping inside the speed limit or other conditions. If you don’t keep up your end of the bargain you can expect to pay more – or even lose your cover altogether!

Another thing to think about is how you’ll be paying for your insurance. Paying monthly, for instance, is a lot like taking out a loan. You’re spreading the cost out, but you’ll end up paying more overall because of the interest you’re stacking up. Don’t underestimate this; it’ll add up quickly over time. If you can afford to pay the whole lump off at once, you’ll end up in a better position. If you’ve got a 0% credit card to fall back on, you could consider loading the whole amount onto that. Just be sure you can pay off the entire balance before the end of your interest-free period.

We mentioned your voluntary excess before, so let’s dig into that a bit. When you raise your voluntary, you’re shouldering some of the insurer’s risk for them. In most cases, they’ll react by offering you a lower premium. Of course, you have to be sure you’ll be able to afford your voluntary excess if the worst happens. It’ll need to be somewhere easy to access, too, to be sure you can pay up and make your insurance claim quickly.

Insurers tend to reward responsible vehicle owners with discounts on their premiums, called a no-claims bonus. In some cases, keeping your bonus can actually be better than making a claim – at least if we’re only talking about minor cosmetic damage. Paying for smaller repairs yourself can keep your premiums down, which can actually work out cheaper in the long run.

Another important tip: always make sure you’ve got the cover you actually need. Some insurers will try loading your plan down with add-ons and extra features at “unmissable” prices. Don’t take on the costs of things that really aren’t necessary. Some of those deals might not even be as good as they look. You can often buy “add-ons” separately anyway – and maybe even cheaper.
If you’re going to list any additional drivers on your insurance policy, pick the right ones and don’t try to cheat the system. Adding experienced drivers is a great way to bring down your costs, but don’t list anyone as the main driver if they’re not. You can end up blowing your entire cover if you aren’t completely honest.

Speaking of being honest, there may simply come a time when you realise you’ve got the wrong tool for the job. You might love that SUV, but is it really worth all the extra costs you’re running up to insure it? Vehicles with smaller engine sizes tend to fall into cheaper insurance groups, so swapping down to a more reasonably sized car could be a smart move. Make sure you check the specific offers, though. Even cars of the same basic size can carry different insurance costs based on things like their make.

That’s it for this basic guide to getting the best from your car insurance. Keep checking back here for more money tips and updates. We’re experts at saving you cash and we’re always here to help. That’s the reason why you’re better off with RIFT.

  • Have your income paid into a standard current account. To keep things simple, we’ll think of this account as your “needs” envelope. All your essential payments will be coming out of this account, adding up to the 50% of your total income you’ve budgeted for.
  • Now, set up an automatic bank transfer to regularly pay 20% of your income into a separate savings “envelope” (remember, we’re doing savings before wants now). Depending on how you’re set up, this might be a savings account, an ISA or some other kind of investment.
  • With your needs and savings handled, your remaining 30% can go on the fun stuff. Again, though, you want to keep everything separate so set up another transfer to a “wants” account. Since you’ve already shored up your savings and paid out your essential costs for the month, feel free to go nuts with this with a clear conscience. You’ve earned it!

Unless you’re actually running a business yourself, you’ll probably tend to assume that all payment methods are the same. The thing is, you might actually find yourself getting a slightly better deal from your labourers by coughing up in cash instead of plastic. It might sound slightly old-fashioned these days, but there’s actually a real benefit to cash payments for many people. When you take a payment by credit or debit card, you end up paying fees for the transactions. Obviously enough, people faced with these fees will tend to pass them on to their customers in the form of a higher quote. If you pay in cash you eliminate those fees, and might see the benefit in a lower quote as a result.

We’re basically all going to end up shopping online anyway, so why not make it work in your favour? There are websites out there that partner up with top brands in their thousands to put money back in your pocket when you buy.

How does it work? Well, when you buy something from a seller featured on a cashback site, the seller gives the site a commission – which they share with you. You can then transfer that cash into your bank account, turn it into a gift card or use it in a range of other ways. One site called topcashback.co.uk boasts that an average member earns £345 per year through their scheme.

New site users often get bonuses like higher percentages, too, boosting your earnings in the early stages. It’s worth keeping in mind that you probably won’t get your payment the moment you buy something. In most cases, there’s a set amount of time to wait before you get your payout – often until after the return period’s over.

Once you've set your Marriage Allowance up, you don't need to apply again unless your situation changes. Obviously, getting divorced means you can no longer make a Marriage Allowance claim, for example. The death of either partner will do the same, naturally enough. You can even cancel it yourself if you need to for any reason.

Since there are income thresholds involved, a change in either your earnings or your partner’s can also affect your Marriage Allowance claim. For example, if you suddenly start making more than your Personal Allowance, you won’t have any extra to transfer to your spouse or partner. In the same way, if you find yourself bumped into a higher tax bracket, you no longer qualify to receive Marriage Allowance at all. When something changes in your circumstances and you’re not sure if you still qualify for (or benefit from) the Marriage Allowance scheme, talk to RIFT tax refunds to keep yourself on the right track.

More on Personal Allowances

The usual suspects like B&Q, Wickes and Selco will often put on sales, so it’s a good idea to stock up on supplies when you spot a good deal. If your job ends up requiring large amounts of any given material or item, grabbing them when they’re cheaper can bring down your overall costs quite a lot – even if you weren’t planning on getting the repairs or renovations done immediately.

  • The best thing is to have a record of all your spending in the form of receipts, meal tickets, email confirmations, bank statements or other records. If you haven't been keeping these then start now! If you aren't keeping a record of how you spent it so you can claim it back from HMRC you're throwing money away.
  • If you're heading out to a local shop, receipts are a good way to track your daily spending. The taxman loves receipts, so you should always hold onto them.
  • If you're using cash, getting a mini-statement from the bank machine you got it from can help show the money you've spent. For extra proof, taking a photo of the menu or price list can help support your claim as you may take £20 out of the wall but spend £7.35 on your actual food costs. 
  • If you're travelling to work on public transport, keep receipts for any food you buy onboard.
  • You can keep a food diary where you record what you eat and how much you spent every day.
  • Tell your work mates. If you've been missing out on the refunds you're entitled to, the chances are they have too! Getting them £250 back in their pocket as you wait in the meal line is better than buying them a quick cuppa because they’re short on cash that day. Even better - if they're not yet making a tax refund claim you could send them to use to get started and we'll reward you for everyone who claims with us.

Childcare support comes in a few basic flavours. You might be able to get tax relief on your pay, for example, or specific benefit payments to cover your costs. You could also claim completely free childcare places with approved organisations or “Tax-Free Childcare”, where the government tops up the cash you’re saving specifically for childcare costs. If you’re working PAYE, your employer might also have a scheme running to help out. As your circumstances change, the kinds of support to can claim might change, so it’s important to understand the rules.

By law, you’re generally entitled to some free hours of childcare each year in the UK. What you can get depends on a few things, including where you live.

In England

  • Your 3 and 4-year old kids can get up to 570 hours of free childcare a year.
  • This works out at about 15 hours a week for 38 weeks.
  • If you’re on certain benefits or other circumstances apply, any 2 year olds you have might also qualify.
  • If you're working you can sometimes claim an additional 15 hours of free childcare, for a total of 30 hours a week. As of the 2019/20 tax year, you (and any partner) need to be earning at least £131.36 a week for at least 3 months to qualify for this, assuming you’re over 25.
  • If you’re self-employed, you can sometimes average your earnings out over 12 months instead, or ignore the rule altogether in your first year in business. Again, if you’ve got a partner who can’t work for a valid reason, you might still be okay to claim the additional 15 hours.
  • If either of you is earning over £100,000 a year, though, you can basically forget about claiming.

In Scotland

  • You can get 600 hours of early education or childcare a year for your kids aged 3-4.
  • If you’re on certain benefits or other circumstances apply, any 2 year olds you have might also qualify.

Talk to your local authority or childcare provider about claiming your free childcare.

Child Benefit is generally for people with kids under 16, and comes in at a flat rate of £21.15 (set to rise to £21.80 from April 2022) a week for your first child. Additional children entitle you to another £14.00 (set to rise to £14.45 from April 2022) per week each. Only one person can receive the child benefit allowance for a child and it is paid every 4 weeks.

If your child stays on at school past the GCSE level, you’re still entitled to Child Benefit until they turn 19. However, you won’t get that automatically unless you reapply for it. Your kids continue to qualify as long as they’re still in full-time “approved education”. This means A-levels (or equivalent), Scottish Highers, NVQs or vocational qualifications up to level 3, traineeships in England or home education (as long as they started it before turning 16). Certain types of “approved training” can also qualify for Child Benefit. Examples include Foundation Apprenticeships in England and Wales, Employability Fund programmes in Scotland and United Youth Pilot courses started before the 1st of June 2017.

One additional little wrinkle to the Child Benefit system is the High Income Child Benefit Tax Charge. While Child Benefit isn’t means tested, this charge does start to kick in once either you or your partner is earning over £50,000 a year. The charge basically boils down to 1% of your Child Benefit for every £100 you earn over the £50,000 threshold. So, by the time you hit £60,000, you’ve burned through your entire Child Benefit amount and get nothing. The strange thing is that a couple each making £49,999 a year each would still qualify for full Child Benefit. However, another couple with one partner earning £51,000 and the other only £20,000 would get hit with the charge.

You can start a Child Benefit claim her

If you’re claiming Universal Credit, you could qualify for what they call the “childcare element” of the payment. There are a couple of basic rules on who’s eligible for this.

Eligibility

  • You (and your partner, if you have one) need to be in work – or at least due to start paid work before your next assessment period ends.
  • If one of you can’t work for some reason (you’re caring for a disabled person or disabled yourself, for example), you might get an exemption from this rule.
  • You might also be exempt for a few other reasons - if you’re signed off work sick, for instance.
  • You also need to be paying the costs for your childcare yourself, and using an approved provider. 

Amount of support available

  • As of 2019/20, the most you can claim for childcare in your Universal Credit payment is 85% of your costs.
  • The payment tops out at £646.35 for one child or £1,108.04 if you’ve got more, though.
  • To make your claim, just get in touch with the Department for Work and Pensions. You can do this online or by phone, and need to do it by the end of the next assessment period after you paid the childcare costs.

For more on Universal Credit, look here.

What is it?

Under the Tax-Free Childcare system, you can get quarterly payments of up to £500 per child you have who’s 11 or under – to a maximum of £2,000 a year each.

What can I use it for?

Not just any costs can count for the scheme. Tax-Free Childcare can be used for things like:

  • Childminders, nurseries and nannies.
  • After-school clubs and play schemes.
  • Home care agencies.

In every case, your provider needs to be signed up to the scheme to qualify.

How do I apply for tax-free childcare?

  • You need to set up a specialised online account to get things rolling.
  • You need to be making at least the £131.36 per week (average out over 3 months) if you’re over 25.
  • Again, self-employed people with earnings that go up and down can still qualify. They can use an expected average for the current tax year if they need to.
  • For disabled children, the scheme’s available up to the age of 16, with a maximum government contribution of £4,000 per child per year. 

How much can I get?

For every £8 you spend on approved childcare costs the government pays £2 into your account – basically wiping out the 20% basic rate of tax on what you’re spending.

Important things to note

One thing to watch out for is that you can’t claim Tax-Free Childcare if you’re on Universal Credit. If you still qualify for older forms of childcare support (like Child Tax Credit or Childcare Vouchers), then you won’t be able to get Tax-Free Childcare on top.

In some cases, you’ll be better off sticking with what you’re already getting, but it’s not always cut-and-dried. If you try to claim Tax-Free Childcare while you’re on tax credits, though, your tax credit claim will end.

You can apply for Tax-Free Childcare online and to get more information about how to apply.

If you’re a student, your college might have a Discretionary Learner Support scheme. You need to be at least 19 to qualify for this, and can use the money for things like childcare, accommodation, travel and course materials. What you can get depends mostly on where you’re studying. You can read more about this here.

If you’re studying full-time in higher education, you might be able to apply for a childcare grant. This is on top of whatever other student finance you have, and because it’s a grant you don’t need to pay it back. Your kids need to be under 15 to qualify, or under 17 if they have special educational needs. Find out more here.

If you’re under 20 yourself and studying, “care to learn” payments might be another option. If you qualify and are looking after a child, you could claim up to £160 a week per kid (or £175 if you’re in London). The cash is paid directly to your childcare provider for as long as your course lasts, or until your children no longer need childcare. Check here for more information.

The Childcare Voucher system used to let you take up to £55 a week of your wages in the form vouchers. The benefit of this was that you didn't pay any National Insurance or Income Tax on that portion of your earnings. The actual amount you could take this way was based on what you earned and when you signed up. When the new system came in, people already getting Childcare Vouchers had the option to stick with them. Anyone signing up after or changing to an employer that didn't support vouchers had to switch to the new system, though.

As for Child Tax Credit, that’s one of the older benefits being replaced with the Universal Credit system. That means most people can no longer sign up for it. There are a few exceptions, though, so it’s always worth checking where you stand and what your best options are.

CIS is a special set of tax rules for self-employed people in the building trade. Normally, when you file your own tax returns through Self Assessment, you get your pay with no tax deducted at source. As a construction subcontractor, however, the rules you follow are a little different. Under CIS, your contractor hacks off 20% of your pay before they fork it over.

CIS covers most kinds of building work done in the UK. Site preparation, construction and dismantling, repairs and decorations are all included in the scheme, for example. Even businesses based outside the UK get caught up in the CIS system, if they do work in the country. It makes no difference if you're a contractor, a subcontractor or both. You'll still need to deal with CIS from one side or the other.

It all boils down to HMRC getting bent out of shape in dealing with tax fraud in the building trade. Basically, they decided there was too much dodgy “cash in hand” nonsense going on in construction and clamped down on it hard. The way they went about it means that your contractor coughs up a chunk of tax to HMRC directly, taking it out of your pay. It's like making an advance payment against the tax you'll owe, designed to make it harder for subbies to wriggle out of paying up. It's not super-popular, obviously, and can leave you badly in the lurch if it goes sideways. Even so, the taxman reckons it's worth the hassle if it chokes off the tax evaders.

People in construction tend to throw these terms around a bit in general conversation, but the CIS system draws some pretty sharp lines between them:

  • Contractor: generally, a person or business who pays subcontractors for construction work. That's a little vague, though. If you're a homeowner splashing out on a new kitchen or some roof work, for instance, HMRC won't be expecting you to deal with CIS deductions.
  • Subcontractor: a business that takes on work from a contractor.

A lot of the time, you can end up being both a contractor and a subbie at once. For instance, this can happen if a business is contracted to do some building work, but then pays someone else to do some of it. At that point, you're getting 20% of your pay sent to the taxman by your contractor, and also sending him 20% of your own subcontractors' cash. It can get messy at times, so you're probably best off getting some expert advice if you're not 100% sure where you stand.

If you're a construction contractor, you need to register for CIS. The same goes for subcontractors who work for themselves, have their own Limited Companies or are in a partnership or trust.

As for how you do it, step one is to jump on the HMRC website and sign up online. You'll need to have an account to sign into and your Unique Taxpayer Reference (UTR) number to hand. The actual forms you'll have to fill in depend on your business set-up (Sole Trader, Limited Company or whatever), but it should all be pretty straightforward. If you're new to the self-employment game and need to get set up, you can do that on the website as well. There's even a CIS helpline you can call if you need someone to walk you through it all.

More on UTR numbers

Generally speaking, if you don't register for CIS when you're supposed to, you can expect to see a full 30% of your wages vanish into HMRC's pockets before you get them! There's a chance you might be able to apply for what they call “gross payment status”, but the rules are sticky so don't count on it. If you do qualify, then you won't lose any of your pay through CIS deductions, but you'll still have to pay tax normally through Self Assessment and/or or the Corporation Tax system.

Apart from the fact that you're paying tax on money you haven't been given yet, there are a few pitfalls and dangers lurking in the CIS system. For one thing, since you're paying tax from the very first penny you earn, there's a chance you might not be getting the full benefit of your tax-free Personal Allowance. That's one of the reasons why it's so important to get your Self Assessment tax returns right. There's a section in there to list all the CIS deductions you've had taken from your pay.

Beyond that, there's obviously the very big danger of failing to get registered for CIS on time – or at all. That can easily see you losing 30% of your pay instead of the normal 20%. It's an easier mistake to make than you'd think, too. A lot of people get into trouble each year because they don't properly understand their employment status, and there's some seriously bad advice floating around out there. You might also be getting bad information from somewhere on how much to claim when you sort out your CIS tax return, which can lead to major hassle from HMRC when they catch up to you - which they eventually will.

If you're on both sides of the fence as a contractor and subcontractor, working with CIS can be a strain on your cash flow. As we mentioned before, you'll be losing 20% of your pay – which is cash you probably need to pay your own subbies. Planning is the key here.

Finally, you've got to watch out for the double taxation trap. If you don't send in your Self Assessment tax return on time, you can end up getting an estimated tax bill from HMRC. With CIS muddying the waters, it's not hard to find yourself getting a bill from HMRC when you've already paid your deductions. It's not usually too difficult to set things straight by getting the taxman the information he needs, but it's definitely a nasty situation to be in while it lasts.

Yes, you can claim your tax refund online by logging into the gov.uk site with your Government Gateway User ID and password. If you don’t already have one of these, you can set one up, which should only take a few minutes if you’ve got your National Insurance number and a recent payslip, a P60 or a valid UK passport to hand.

You’ll need to show HMRC some proof of all the work expenses you’re claiming a tax refund for. You’ll also need a few bits of crucial information, like details of the places you’ve worked in the years you’re claiming for. There are a lot of complicated rules about which kinds of expenses can earn you a tax refund, so talk to RIFT  if you’re not 100% sure where you stand.

When you’re buying property, it’s not just your own money you’re risking. You’ve got to keep in mind that your mortgage lender will need to think of you as a safe bet. A clean credit history’s a great step in the right direction – and paying down your debts before you start saving seriously will actually make the road ahead a lot less rocky.

Speaking of keeping an eye on the future, don’t forget the extra costs you’ll be facing beyond your basic deposit and mortgage repayments. Solicitor fees, Stamp Duty and moving costs can all lump a lot of extra money onto your overall costs. Be sure to factor these into your budget so you don’t get tripped up later.

Keep checking back here for more money tips and updates. We’re experts at saving you cash and we’re always here to help. That’s the reason why you’re better off with RIFT.

Most people never realise how much their old household appliances are costing them each year. Energy efficiency’s become a really big issue in recent times, and a typical home can be a minefield of “hidden costs” if you’ve got the wrong gear installed. Let’s take a look at some of the usual suspects, and what you can do to get them up to date. 

It's a great excuse to modernise your kitchen:

  • Your old dishwasher might not be pulling its weight any more. If you’re still struggling along with a D-rated machine, trading up to a modern A+++ one could see you bagging an extra £47 a year in savings.
  • The same thing goes for your washing machine. Swapping out your D-rated machine for an A+++ one could knock about £34 off your yearly energy bills.
  • Even your freezer could be adding to the energy you’re wasting. Stepping up from a C-rated device to a super-efficient A+++ one could be worth a massive £113 a year in energy savings. You don’t even need to go that far to see the benefit. Just going from C to A++ could still land you an extra £26 a year.
  • Here’s a nice little energy-saving dodge that most people don’t even know about. The head on your shower could be costing you a load of unnecessary money without you ever realising. It takes practically no effort to switch to a more water-efficient model, and the savings are pretty surprising. Overall, you stand to shave £30 off your yearly gas bill this way, along with saving a whopping £45 in water!
  • Your old dishwasher might not be pulling its weight any more. If you’re still struggling along with a D-rated machine, trading up to a modern A+++ one could see you bagging an extra £47 a year in savings.
  • The same thing goes for your washing machine. Swapping out your D-rated machine for an A+++ one could knock about £34 off your yearly energy bills.
  • Even your freezer could be adding to the energy you’re wasting. Stepping up from a C-rated device to a super-efficient A+++ one could be worth a massive £113 a year in energy savings. You don’t even need to go that far to see the benefit. Just going from C to A++ could still land you an extra £26 a year.
  • Here’s a nice little energy-saving dodge that most people don’t even know about. The head on your shower could be costing you a load of unnecessary money without you ever realising. It takes practically no effort to switch to a more water-efficient model, and the savings are pretty surprising. Overall, you stand to shave £30 off your yearly gas bill this way, along with saving a whopping £45 in water!

The taxman likes to be kept up to date on any income you’re earning, but he’s not some crazed stalker prying into every aspect of your private life. Gifts from your parents or friends, student loans and grants don’t count as taxable income in HMRC’s eyes. The same goes for bursaries, scholarships and so on.

Yes. If you’re renting out a room while you’re studying, then the taxman will want his bite of it. As always, any Personal Allowance you’re entitled to applies. You’ll probably end up filing Self Assessment tax returns to account for the income. However, depending on what you’re renting out, you might be able to use the Rent a Room scheme. Under Rent a Room, you can earn up to £7,500 tax-free a year from renting out furnished accommodation in your main home. Rent a Room is simpler for most people than working out their expenses in their tax returns. As long as you qualify for it, it can be a decent way to score some extra income.

Apprenticeships are a lot like training contracts, in that you’re working primarily to learn a trade or set of skills. However, apprenticeships are paid positions. That means you’ll be taxed through the PAYE system. Depending on how long your apprenticeship lasts, you might find yourself claiming back some PAYE tax from HMRC (if it’s less than a full year, for instance). Also, unless your employer’s paying or reimbursing all your expenses (travel to temporary workplaces, tool/equipment repair, and so on), you might be owed some tax back for those, too.

If your student job’s the first toe you’ve dipped into the taxman’s world, there’s a potentially nasty trap you need to watch out for. If HMRC doesn’t have enough information to issue you a PAYE tax code, your employer might lump you with an emergency one. In practice, it’s not really as bad as it sounds. It just means you’ll only be entitled to your basic Personal Allowance. For most people, that’s all they’d probably get anyway. However, an emergency code is bad news if you ought to be getting any allowances or tax reliefs - like the Blind Person’s Allowance, just to pick an example.

Tax breaks are another term for tax relief. HMRC has various systems in place to help people and businesses bring down the tax they're paying under certain circumstances. For example, when you're reaching into your own pocket for things like travel to temporary workplaces, you can claim back some tax on your mileage expenses. Everything from individuals washing their work uniforms to businesses conducting cutting-edge R&D can qualify for some kind of tax relief. The key to getting the best from these systems is to know exactly what you qualify for, and how to claim it back.

If you're self-employed and paid through the Construction Industry Scheme (CIS), you're probably due a tax refund.

You can also claim back a range of job-related expenses, including travel, meals, lodging, parking, tolls, tools, protective clothing, public liability insurance, phone bills, postage and stationery.

We’ll assess all your expenses and include them if they qualify. That way you'll be certain that everything on your claim is a genuinely allowable expense and you won't find HMRC knocking on your door asking for their money back. If you're a RIFT customer, you'll be covered by our RIFT Guarantee as well, so you've got even more peace of mind.

Sadly there are a number of unscrupulous tax refund advisors taking advantage of CIS workers at the moment. Read our blog on How to spot a CIS Refund Scam and keep yourself, and your money, safe.

If you want to see how much you could be due back from HMRC use our tax calculator and find out in seconds.

Yes it does. All self-employed people, including CIS workers, have to complete a tax return every year. The tax year ends on 5th April and you’ve got until 31st January the following year to send your tax return to HMRC.

Read more about Tax and the Construction Industry Scheme

At RIFT we complete your tax return for you, and claim your tax refund at the same time. Just tell us where you’ve worked, and when, and we’ll work out the cost of your travel. We’ll add any other job-related expenses you may have and fill in the tax forms for you, all you need to do is sign them.

We’ll send the forms to HMRC, handle any questions on your behalf and chase them if they don’t pay out in the agreed timescale – it’s all part of our service.

95% of our CIS customers get a tax refund, and the average value of the refunds is £2000 per year.

Use our tax calculator to find out how much you could have waiting for you at HMRC.

Yes you can! The Self Assessment system is all about settling up fairly with the taxman. Any money you received from The Self Employment Income Support Scheme will be treated as taxable income on your Self-Assessment. Whether or not you get a government loan to see you through the COVID-19 outbreak, you’re still owed the rules covering CIS tax refunds are the same as before. Paying tax under the Construction Industry Scheme can mean you’re not getting the full benefit of your tax-free Personal Allowance so you should always make your claim.

Covid-19 Support

The Self-Employment Income Support Scheme (SEISS) is designed to help self-employed people get through the COVID-19 crisis. The 5th grant changed the playing field slightly for businesses hit by the COVID-19 pandemic. This grant covered the period from the start of May 2021 to the end of September 2021. If you qualified for a previous grant and your business was still suffering because of the pandemic, you should have been able to make a claim.

For the 5th grant, what you received depended on how badly your turnover had been damaged:

  • If your turnover had dropped by 30% or more, you’d have received 80% of your 3-month average trading profits.
  • If your turnover had s gone down by less than 30%, you’d have received 30% of your 3-month average profits instead.

Because the grant amount was based on your turnover, you obviously needed some figures to show HMRC. The first thing you needed was your turnover total from either the 2018/19 or 2019/20 tax year. You should have easily been able to find this in your Self Assessment tax returns.

The other thing you need was your turnover from the 2020/21 tax year to compare. Again, your Self Assessment tax return’s ideal for this. If you haven’t already talked to RIFT about submitting your 2020/21 return, time’s running out. The official Self Assessment deadline isn’t until the 31st of January. However, if you’re going to use your tax return to show your turnover for 2020/21, you’ll have needed to have it squared away before the SEISS claim deadline of the 30th of September 2021.

CIS tax rebates generally take about 4-10 weeks for HMRC to process. RIFT’s CIS refund service includes handling your Self Assessment CIS tax return and full aftercare throughout the year, with no hidden fees. With RIFT, you get the very best from your claim, as fast as possible and with no expensive hourly rates to cough up. One simple fee takes care of everything.

HMRC’s not known for its blistering speed, but there are a few things you can do to keep the wheels turning on your claim:

  • Get the 64-8 form we send you sorted out as soon as possible. We need it to talk to the taxman for you.
  • Use our calendar of key days to steer clear of HMRC's busiest periods.

RIFT’s expert teams will make sure there's no hold-up at HMRC. That means no endless waits on HMRC helplines and no dangerous mistakes creeping into your claim. We'll even chase up old employers if they're dragging their feet in sending the information we need. Once you’re happy with the amount we’ve calculated for your rebate, we’ll chase up HMRC until it’s paid out in full. Meanwhile, we take expert care of you all year round, and we’re never more than an email or phone call away. As always, everything's covered by our RIFT Guarantee. As long as you've given us complete and accurate information, your rebate is protected.

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When you file your own Self Assessment tax returns, it's easy to miss out on CIS claims or make costly mistakes. Under the CIS scheme, your employer takes tax directly from your pay before you get it. This almost always means you're instantly losing 20% to the taxman. As a result, you’ll probably find you’ve been overcharged by HMRC when you file your Self Assessment tax return.

It takes specialist understanding to claim tax back for CIS construction workers. Every year, far too many people are still shelling out tax they don't owe. In the worst-case scenario, they don’t get any CIS tax rebate at all. Even if they do, it’s often nowhere near as much as they deserve.

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Yes! All self-employed people, including CIS workers, have to complete a yearly Self Assessment return.  The tax year runs until on 5th April, then you've got until the following 31st of January to complete and file your tax return.

With RIFT, filing and completing your CIS tax return is all part of our tax rebate service. Armed with a list of your workplaces for the year and a few more details, we'll work out the cost of your travel and what you’re owed for it. Next, we'll add any other essential expenses you’ve had and sort out your paperwork.

We'll send the forms to HMRC, handle any questions on your behalf and keep chasing the taxman until your rebate’s paid. 95% of our CIS customers get a tax refund, with an average value of over £2,245 per year.

TAX RETURN QUOTE TAX CALCULATOR

The taxman really doesn’t like waiting. Miss the filing or payment deadline by a single day and you'll get an immediate £100 penalty. At 2 months late, that fine doubles. At 6 and 12 months late, it reaches £300 (or 5% of the CIS deductions on the return, if that's higher). Any longer and you might face an additional penalty of £3,000, or 100% of the CIS deductions on the return.

Of course, with RIFT on your team, you’ve got nothing to worry about. We’ll keep you in the taxman's good books and make sure you never miss out on your CIS tax claims - even the ones you didn’t know you qualified for!

You’ll need a few bits of information about yourself to register for the Construction Industry Scheme:

The CIS scheme covers most of the construction work done in the UK. If you’re self-employed in the building trade, you’ll almost certainly have to register for it. Contractors will need to verify their subcontractors, handle their CIS deductions and file monthly CIS returns.

If you’re a subcontractor and don’t sign up for CIS, it doesn’t mean you won’t have the deductions taken from your pay. In fact, you’ll probably actually lose even more of your money, since the rate goes up to 30% for people who aren’t CIS-registered. It’s possible that you qualify for “gross payment” status, where you don’t have to pay CIS deductions. Don’t count on that, though, as there are specific rules and conditions to meet.

One of the problems with CIS is that it's very easy to end up paying too much - and you won't get an automatic refund. To claim your CIS rebate, HMRC demands proof of what you’re owed. This is what RIFT Tax Refunds is all about, so get in touch to see how we can help.

Remember that CIS covers all UK construction work, even if it's done by foreign firms. There are penalties for filing late, so you have to stay on top of the paperwork. 

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When you register with the Construction Industry Scheme, you get a card. The kind you’re given depends on your situation:

  • CIS A(P): Most subcontractors get this. It shows that you're eligible to have CIS tax deducted by your employers, and it doesn’t expire.
  • CIS 4(T): A temporary version of the card above. You'll probably only get this if you didn't know your National Insurance number when asked. Once you have your NI number, you'll be upgraded to a permanent card.
  • CIS 5: This is for companies that can't get a CIS 6 certificate, but still qualify for gross payments.
  • CIS 5 (Partner): This is the version of CIS 5 for partners in firms.
  • CIS 6: You can get this card if you're an individual, partner or director who qualifies for gross payment status. You qualify based your turnover, the kind of business you're in and how well you follow HMRC's rules.

For most general contractors in the UK building trade, the CIS scheme's compulsory. It includes everything from site preparation and repairs to decoration and demolition. There are a few exceptions, though. For instance, if you’re a contractor who only deals with very limited sections of the work (like carpet fitting), you may not have to register.

CIS covers all construction work done in the UK, even when it's done by foreign firms. The registration system is a little different, but all the basic rules are the same. The UK has some ''double taxation'' agreements in place with various other countries to reduce your total tax when you're paying in both countries. Talk to RIFT if you need help working out what it all means for you.

The standard Construction Industry Scheme tax deduction is 20%. If that sounds like HMRC's taking a huge lump out of your pay, then it only gets worse if you don’t sign up to the scheme. If you haven’t registered, the rate shoots up to 30%! This can also happen if you don't give your employer your Unique Taxpayer Reference number (UTR). Your UTR is used by HMRC to identify you. If your employers don't have it, the taxman might assume you aren't registered for CIS and charge you the higher rate.

CIS tax deductions are payments your employer takes out of your wages before you get them. Those payments go straight to HMRC instead of you. They're supposed count as advance payments toward your tax and National Insurance, clamping down on tax evasion in the industry. Unfortunately, one of the side-effects of CIS is that a lot of honest people end up being charged too much tax. At RIFT, our friendly teams of CIS experts can quickly tell you if you're due a tax rebate, then make sure you get it.

A Construction Industry Scheme Payment and Deduction statement is a record of the money you've been paid and taxed on if you work under the CIS scheme. You might also just call them wage slips, payslips or something similar.

If you're self-employed in construction, they're some of the most important documents you'll ever have. When you file your yearly CIS tax return, you'll need these statements to prove what you've earned and paid. You should get a CIS Payment and Deduction statement from your boss whenever you’re paid, within 14 days of the end of the tax month.

The main thing you'll need your CIS certificates or wage slips for is filing your yearly Self Assessment tax returns. The taxman will expect you to show him a record of all the cash you’ve got coming in. With the CIS taking 20% of your pay before you get it, you’re probably not getting the full benefit of your tax-free Personal Allowance. You’ll be hard-pressed to prove that without your CIS paperwork to back up your claim, though.

CIS Tax Returns

Employment status is a huge issue in construction, and it can get very complicated with so many layers of contractors, subcontractors, agencies and so on. You might think you’re working under exactly the same conditions as your PAYE workmates, but the taxman could well take a different view.

The first thing to do is check your payslips. If they say “CIS statement” and show 20% deductions being made, then you’re being taxed through CIS. If that seems wrong, you need to talk to your employer fast.

The CIS scheme is only for construction, and its rules can catch out even experienced self-employed people from other industries. If you’ve got self-employed mates from outside of construction, be careful taking Self Assessment advice from them. They might not know the territory as well as they think they do. Play it safe and talk to the experts at RIFT instead.

In construction, a contractor is a person or business supplying materials or labour for a job. On the other hand, a subcontractor is anyone who does construction work for a contractor. Basically, according to HMRC, you're a contractor if you pay subcontractors for construction work.

You can also count as a construction contractor if your business doesn't do construction work, but still spends an average of over £1m a year on construction in any 3-year period. Either way, you’ll need to register for CIS and start taking deductions from your subcontractors’ pay.

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As a contractor, you need to register for CIS before you even take on your first subcontractor. You're going to have a lot of responsibilities under the scheme, so get used to minding the details. Here's what you need to do:

  • Get registered. You can do this online, but it can take up to 2 weeks to sort out. Make sure you allow for this time before taking on any subcontractors. You can sign up as a Sole Trader, a Limited Company or a Partnership. Remember, you need to do this even if you're based abroad.
  • Verify your subcontractors with HMRC to check that they're in the CIS scheme. Again, you can do this for free on the HMRC site. In addition to the information your subcontractors give you, you'll need to enter some basic details about your own business.
  • When you start paying your subcontractors, you'll make deductions from their pay for CIS. The rates are 20% if they're registered for the scheme, or 30% if not.
  • Make sure you're working out the gross pay correctly. Charges for things like VAT, materials and equipment aren't included.
  • Pay the CIS deductions to HMRC. They'll have set you up a payment scheme when you registered.
  • File your monthly CIS returns. There's an online tool for this, or you can use commercial software. These have to be spot-on, with up to £3,000 penalties for giving the wrong employment status for a subcontractor.

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Subcontractor tax refunds can be tricky. It’s easy to miss out on money you’re owed - or even get put off from claiming altogether. Even pricey accountants can find themselves tangled up in the system if they don't know the construction industry well. RIFT Tax Refunds has been specialising in construction rebates since 1999. There really are no safer hands to be in.

Gross payment status means that no CIS deductions get taken out of your pay. There are 3 basic tests to see if you qualify:

  • The turnover test: Do you have a net annual turnover of £30,000+ for 3 continuous years?
  • The business test: Are you in a business that qualifies for gross payments? In general, that means construction work. You also have to do business through a bank account and keep proper records.
  • The compliance test: Do you have a spotless track record of paying all your tax and hitting all your deadlines?

Yes, you will pay tax “at source” (your tax is taken off your wages before you get them), most likely at the rate of 20% of your income.

However, this doesn’t mean you are “employed”. You still count self-employed under CIS – even if it doesn’t feel like it. The big difference is that this means you'll still have to do Self Assessment each year. Not filing those tax returns each year brings three very serious problems your way:

  • You're not getting your tax-free Personal Allowance.
  • You're not getting any of the tax relief you're entitled to for your work expenses.
  • HMRC's going to come after you for failure to file!

If you're getting CIS statements and don't understand why, get in touch with RIFT straight away. We can explain the system, make sure you aren't paying too much tax and keep you out of trouble with HMRC.

There are strict rules for CIS contractors about payment and deduction statements. They need to send you one every time you're paid, with specific deadlines to hit.

If you haven't been receiving yours, don't panic. It may just be a simple admin mix-up. Get in touch with your contractor and ask for your certificates, so you can keep your Self Assessment records up-to-date.

Don't just ignore the problem. If it turns out your contractor's not been doing things correctly with HMRC, things could get awkward for you in a hurry, come the end of the tax year. If you still have no luck, come to RIFT for advice and help. We're experts in sorting out tax problems for UK construction, and we'll get straight to work.

If you're self-employed in any kind of business, you'll almost certainly be using Self Assessment to pay your tax. In the construction industry, you'll probably also have to deal with the Construction Industry Scheme (CIS). Subcontracting under CIS means your Self Assessment filing has a couple of extra points to consider. If you don't understand the system, it's easy to end up paying a lot of extra tax you don't owe. If you think you are due a tax rebate check out our CIS tax refund pages.

Self-employed CIS workers can sometimes pass work on to other people. However, there are strict rules about doing this, and breaking them can lead to serious trouble. HMRC has a real problem with people in CIS work paying cash-in-hand for others to do jobs for them. It doesn't matter if you're passing the work on to friends, colleagues or family. You still have to follow the rules.

The first thing to know is that passing your CIS work on makes you a contractor in HMRC's eyes. That means you have to register yourself to avoid serious trouble from the taxman. You can't just slip someone a fistful of banknotes on the sly and sort things out later. You need get yourself registered before you take on your first subcontractor.

After that, you need to be sure your subcontractors are signed up for CIS. When you pay your subcontractors, you have to take CIS deductions from their pay and send them to the taxman. You'll also need to file returns every month and keep detailed CIS records. If you slip up, or ignore the regulations altogether, you're looking at some painful penalties.

As long as you're following the rules, then the cash you're paying the people you give the work to counts as an expense. That means it will bring down the amount of profit you're paying tax on. If RIFT is handling your tax returns, of course, we'll handle all of this for you as part of the service. 

If you've been passing some of your CIS work on, then you need to have good records to show the taxman. HMRC will expect to see detailed evidence of the wages you've paid out, for instance. In addition, they'll also want to see the details of the people doing the work for you. Names, addresses and their Unique Taxpayer Reference numbers will all be needed. Again, RIFT will handle all the sticky HMRC business for you to keep you within the regulations and out of trouble.

RIFT was first founded to help construction workers tackle the taxman. We've grown a lot since then, but we always remember where we started. We're still the leading experts on taking care of the UK's construction industry. We're on great terms with HMRC, and know the business inside and out. Whatever tax problems or questions you've got, talk to RIFT.

The Self-Employment Income Support Scheme (SEISS) is designed to help self-employed people get through the COVID-19 crisis. With the 4th round of SEISS grants, the rules on who qualifies were loosened up slightly. You should be okay to claim if:

  • You filed a Self Assessment tax return for 2019-20 by the 2nd of March 2021.
  • Over half of your earnings come from self-employment.
  • You’ve been making under £50,000 a year on average over the last 3 years.
  • Your business has suffered significantly as a result of COVID-19.

The 4th SEISS grant pays out 80% of your average profits over 3 months, capped at £7,500, worked out using your last 3 years of profits. If you became self-employed more recently than that, only your time in self-employment will be used to make the calculations.

A final SEISS grant is coming later in the 2021, to be claimed from around the end of July. Only people who’ve seen a 30% drop in their average turnover will get the full 80% pay-out (capped at £7,500) this time. If your turnover’s dropped by less, you’ll get a 30% grant level instead, capped at £2,850.

If you’re eligible for a SEISS grant, you should be contacted by HMRC with instructions and a personal claim date. See our FAQ here for more about the scheme.

With consumer credit, we’re talking about the kind of thing you’re most likely to run into on the average high street. This is where the customer is allowed to delay the cost until a later date for any goods, services or even money they’re given now. There’s typically some kind of charge for this.

Consumer credit deals are the kind of thing you tend to see with ‘hire purchase’ agreements, vehicle finance, credit insurance or personal loans. The consumer can be offered the deal based on how ‘credit-worthy’ they are – basically just meaning how likely the business thinks they are to be able to afford the repayments. The rules are usually pretty much standardised for those who qualify. A fairly typical example of a consumer credit deal is an ‘equated monthly instalment’ agreement, where you pay back a set monthly amount to cover the overall cost (plus interest). Another common example is an overdraft facility on a bank account.

How to use price comparison sites

All of this can leave people who are dealing with mental health and money issues isolated and suffering alone. They feel guilty buying the things they can actually afford, and depressed about the things they can’t. At the same time, those feelings can stop them from asking for help, support or even advice.

That last point’s one of the most important. It can be incredibly hard to start conversations about money and mental health, whether you’re suffering yourself or seeing the signs in someone else. The critical thing to understand is that it’s not a failure to ask for help or accept the support that’s offered. Everyone has a right to have their essential needs met – and there are resources out there dedicated to making sure that right is respected.

The longer you leave it before speaking up, the more of a habit it becomes to try and “tough it out”. Just like financial trouble, not every mental health problem comes at you in a big rush. Sometimes, it’s the slow build-up of pressure that weighs you down most over time, particularly if it’s not just yourself you’re looking after.

Buying a house comes with a hefty stack of paperwork attached, and dealing with that paperwork costs money. What we call ‘conveyancing’ covers a lot of these fees, which you’ll run into at pretty much every stage of the purchase process. All told, your conveyancing costs (including solicitor’s legal fees, exchanging contracts, etc.) will tend to average out at around £1,040 if you’re a buyer and £1,000 if you’re a seller. Those numbers are based on a typical freehold property price of £277,000.

The exploding cost of energy’s sent a shock wave through basically all of our family finances. On average, UK households are burning through an incredible £1,971 per year on gas and electricity – essential utilities we really can’t go without. That figure’s ramped up by a massive 54% over where it sat before the latest price cap hike.

When you’re managing your energy use, it’s important to realise that a few small changes you can reliably stick to are usually worth more in the long run than a single big one that you can’t. For example, even clicking your main thermostat down by a single degree can save you anything from £55 to £90+ over the course of a year, depending on the size of your home. The odds are, you won’t even feel the difference in temperature day by day, but you’ll be taking some real heat off your wallet.

There are lots of small changes you can make around you home to bring down your energy bills, and most of them are so simple you’ll barely even notice them. However, they’ll all combine into some serious savings over time. Check out our guides below for more on how to keep your energy spending under control.

6 ways to save on gas & electric bills

7 heating bill hacks

Food bills are another everyday cost where small changes can add up to big savings over time. On average in the UK, households are splashing out £3,312 on groceries alone each year. That doesn’t even include the food we buy from takeaways or eat in restaurants, either. Add those in and the figure leaps up to over £5,000!

Bringing down your yearly food costs doesn’t actually have to mean buying less food – although if you find yourself throwing away a lot of out-of-date food waste each week you could probably do yourself a favour by not buying things your family won’t get round to eating. The real trick to trimming the fat off your supermarket bills, though, is to make full use of the range of retailers and discount schemes on offer. Aldi, for instance, prides itself on keeping its prices super-competitive by staying efficient and stocking a lot of own-brand goods. In fact, about 90% of what Aldi sells is “private brand”, cutting down on their costs and passing some of what they’re saving on to their customers.

Another thing to look into is whether your favourite supermarket has a loyalty card scheme running. Tesco’s Clubcard can be great for bagging a few bargains, for instance. Just be sure that those “unmissable” deals aren’t convincing you to buy things you don’t actually need. Even small discounts can be valuable if they’re on things you have to buy regularly.

Now we come to those little extras we all love. We’ve already seen how a typical British family munches through an average of over £1,700 of takeaways and restaurant meals per year. There’s absolutely nothing wrong with treating yourself and your loved ones once in a while, but if the cost’s becoming a problem, you can still get the full experience by cooking “fakeaway” classics using free recipes from the web. It’s easier than you’d think, and can even be more fun if you get the whole family involved.

About half of UK households have been deliberately cutting back in their non-essential travel recently, and it’s easy to see why. Travel costs can pump your yearly expenses up by a lot, particularly if you’re driving or using public transport for your work. As fuel and ticket prices continue to rise, every mile matters even more.

If you’re not using your own wheels for your essential journeys, always check out the kinds of discounts your journey qualifies for. It’s true, the choice can be a bit baffling if you’re not used to sorting through your options. There are 9 different types of railcard alone to pick from, depending on the travel you’re doing. Once you’ve got it figured out, though, you could be looking at a discount of at least a third on your overall costs.

If you’re a London traveller and use public transport a lot, make sure you grab yourself an Oyster card. The great thing about these is they set a hard cap on how much you’ll have to spend on any given day. You can use them on the London Underground, the buses and most of the national rail services in London. About the only thing to watch out for is whether you’re actually saving money compared to your other transport options. Even with the various discounts you can get, you might still end up paying more than if you’d used your own transport. Obviously, your best option will depend on where your travel takes you. Petrol alone is costing the average UK driver over £1,400 a year, so make sure you cost out your various options before making a decision. A little legwork up-front could pay off in a big way over time.

As the cost of living goes up, it’s no big surprise to find so many of us struggling to stay out of debt. If you haven’t been managing your household budget carefully enough, just one unexpected cost or financial setback can leave you needing an emergency cash boost that could end up making things even worse. Over 1 in 4 people surveyed in the UK say they’re now having to lean more heavily into loans or expensive credit card deals to cover their day-to-day costs than they did a year back.

When you’re stacking up debts, every other money decision you make gets more difficult. Even if you’re able to save a little cash regularly, the interest on your debts will almost always pile up faster and higher than it will on what you’ve put away. This makes you poorer over time in real terms, even if you’re making a real effort to save. That’s why, wherever possible, it’s a smarter move to pay down what you owe before you try to stock up any savings. At the very least, you want to be able to cover the minimum payment amounts on your debts each month so they don’t get out of control. Not only will this help keep your overall finances more healthy, but it’ll also protect your credit score if you need to borrow in the future. Over 2 million people are currently finding themselves falling behind on at least one crucial payment each month. We’re talking about the really important bills here, like rent, mortgage repayments or high-interest credit card balances. These are the kinds of things that can damage your credit score as well as your bank balance, so it’s incredibly important to stay on top of them.

One thing that really does work is learning how to set up, and stick to, a household budget. Basically, all you have to do is work out exactly how much cash you have reliably coming in each month, and then divide it up to cover your costs.

Those costs get sorted out into categories, with a set percentage of your income going into each, like this:

  • 50% of your income goes toward essential costs like loan repayments, rent or your mortgage.
  • 30% goes toward the “fun stuff” you could probably live without, but shouldn’t have to.
  • 20% is left over to save.

For pretty obvious reasons, this is called a “50/30/20” budget, and it’s a system we’ve talked about before in some of our other guides. If you’re new to setting up budgets, it’s a great place to start. We’ve even got a free tool  you can use.

Free budget planner

Keep checking back here for more money tips and updates. We’re experts at saving you cash and we’re always here to help. That’s the reason why you’re better off with RIFT.

The first thing to understand about healthcare tax refunds is that not every mile you travel or pound you spend will count toward your claim. A daily commute to a permanent workplace, for example, won’t earn you any tax relief. To qualify for a refund, your work travel needs to be to and from what HMRC calls “temporary workplaces”. In practice, this generally means anywhere you work for less than 24 months. So, for example, a nursing job that requires you to travel out to patients’ homes could end up making you eligible for a pretty decent tax refund. Meanwhile, travel expenses can also include some subsistence costs while you're on the move. Things like accommodation and food can all contribute toward your claim.

There are also a few tricky points to consider. If you're travelling to a number of hospitals or clinics within the same general area, with your mileage and travel times not changing much, HMRC might consider the entire region your “permanent workplace”. It's always best to get professional advice in situations like these.

Rotational contracts, where you're working full-time at a series of hospitals over a period of years usually won't qualify. However, if your training takes place under, for example, a single 5-year contract, then things changes. In that case, each hospital you work at will count as temporary because it's a single employment with multiple temporary workplaces. The regulations are easy to trip over here, so it's often a good idea to get professional help.

If you're already getting some of your costs reimbursed by your employer, you may still be owed tax back. HMRC has set rates for Approved Mileage Allowance Payments (AMAP), and if you're not getting the full amount you can claim back the difference. The NHS has its own rates as well, if you're employed by them.

Beyond travel, there are several more ways a job in healthcare can cost you money. If you’re paying out of your own pocket for repair, replacement or even laundry of your work uniform, for instance, you could make a claim for those costs. The same goes for union dues and professional body fees to organisations like the Nursing and Midwifery Council.

The key points to remember are that the costs you’re claiming tax relief for need to be essential to your work, and you need to be paying them yourself. In addition, to get back everything you’re owed you’ll need to show proof of what you’re spending. That means records and receipts – although the simplified Flat Rate Expenses system can offer an easier way if you don’t mind sticking to HMRC’s figures.

If you find yourself buying things like laptops or office equipment for work use, you might have a claim under HMRC’s capital allowances system. This is generally for items that you’ll be using for a couple of years or more – and again, you’ll need to be footing the bill yourself for them to qualify for tax relief.

  • People living alone you can get a 25% discount. When this is worked out, the rules actually completely ignore anyone living with you who’s under 18, along with any 18-19 year olds who are still in education on the 30th of April. The same goes for anyone you’re still entitled to claim Child Benefit for.
  • People in training, who are temporarily away or who suffer from severe mental impairment can sometimes also be ignored when working out how many adults live in a property. That’s why it’s so important to make sure the council has a clear picture of your circumstances. If they don’t have all the information they need to calculate your Council Tax bill, you could easily end up overpaying.
  • Even if you’re living with someone who isn’t ignored because of the “living alone” rules, if they’re on a low income or getting benefits you might qualify for a “second adult rebate”.
  • Holiday homes, second homes and properties that aren’t being used can all sometimes qualify for Council Tax reductions. Check your local council’s website to see what their rules are.
  • If your property has an extra kitchen, bathroom or other features put in to meet the needs of a disabled person, you might get a reduction to your Council Tax rate. You’ll usually be expected to provide some evidence to the council to claim this, obviously.

The big thing to realise about Council Tax is that it’s a really high-priority debt to clear – arguably more than even things like credit card balances or unsecured loans. The fact is that your local council has a lot of ways to make your life difficult if you don’t pay up. Here’s an example: if you wind up in arrears on your Council Tax payments, meaning you’ve fallen behind, you could find yourself with a “liability order” from a magistrates court. This nasty little piece of paperwork can dump a load of extra court costs on top of what you already owe, and pave the way for even more enforcement action. We’re talking about visits from bailiffs, automatic deductions from your earnings or benefits, bankruptcy or even a prison sentence if you let things go that far.

Okay, let’s say you’ve missed a few Council Tax payments and can’t see an easy way to pay up. Don’t fool yourself into thinking that the authorities won’t notice, and don’t wait for them to get in touch with you before you decide to do something about it. Hop on the phone to the council office and talk them through the difficulties you’re having. You’ll almost certainly still end up having to pay what you owe in full, but there’s a good chance they’ll be able to offer you easier ways to do it. If you ignore the problem, you’re probably going to find yourself facing court costs, bailiff bills and potentially lots more trouble on top.

Read our guide: Debt & mental health

If you talk to your council, you’ll probably find them more than willing to help. After all, they’re not trying to ruin you. All they want is what you owe by law. Instead of coughing up the whole amount at once, though, the odds are you’ll be able to spread your payments out over a longer period, paying off your debt in small chunks each month. No, it still probably won’t be much fun, but it’ll eventually make the whole problem disappear and it’s a lot better than the alternatives.

Council Tax charges are set in “bands” from A-H, with the band you’re put in based on how much your property was worth back on the 1st of April 1991 (for England and Scotland) or the 1st of April 2003 (for Wales).

It’s quite possible that you’ve been put into the wrong Council Tax band, and if you think you have you can actually challenge the council’s decision. This kind of thing can happen if, for instance, your property’s been changed, demolished or is being used for different purposes than before. If you think that applies to you, you can challenge the decision via the Valuation Office Agency (or the Scottish Assessors website in Scotland).

Another reason your council Tax bills might be too high is if you’re due a discount that you aren’t getting.

  • People living alone you can get a 25% discount. When this is worked out, the rules actually completely ignore anyone living with you who’s under 18, along with any 18-19 year olds who are still in education on the 30th of April. The same goes for anyone you’re still entitled to claim Child Benefit for.
  • People in training, who are temporarily away or who suffer from severe mental impairment can sometimes also be ignored when working out how many adults live in a property. That’s why it’s so important to make sure the council has a clear picture of your circumstances. If they don’t have all the information they need to calculate your Council Tax bill, you could easily end up overpaying.
  • Even if you’re living with someone who isn’t ignored because of the “living alone” rules, if they’re on a low income or getting benefits you might qualify for a “second adult rebate”.
  • Holiday homes, second homes and properties that aren’t being used can all sometimes qualify for Council Tax reductions. Check your local council’s website to see what their rules are.
  • If your property has an extra kitchen, bathroom or other features put in to meet the needs of a disabled person, you might get a reduction to your Council Tax rate. You’ll usually be expected to provide some evidence to the council to claim this, obviously.

To put it in perspective, let’s say you’re a student who’s just moved into rented accommodation. The rules say you don’t need to pay Council Tax – but that doesn’t mean the local council won’t ask for it. You’ll almost certainly have to apply for your Council Tax exemption directly. It might sound like a hassle, but at a saving of up to £120 per month, it’s absolutely worth it!

Another thing that can bring down the Council Tax you’re being charged is if you qualify for a Council Tax Reduction (also known as Council Tax Support). Again, though, the council will need a lot of information about your circumstances to make their overall calculations. You could qualify for a reduction if:

  • You’re the person who’s actually paying the Council Tax bill.
  • Your income is low, whether it’s from work or benefits.
  • Your partner (if any) and you have no more than £16,000 in savings and capital.
  • You’re on Universal Credit.

The reduction you actually get will depend on a range of conditions, from your age to your savings and benefits. You get less if you’re still at working age, for example.

Keep checking back here for more money tips and updates. We’re experts at saving you cash and we’re always here to help. That’s the reason why you’re better off with RIFT.

  • You’re the person who’s actually paying the Council Tax bill.
  • Your income is low, whether it’s from work or benefits.
  • Your partner (if any) and you have no more than £16,000 in savings and capital.
  • You’re on Universal Credit.

This is a pretty big topic, but the basic rule is that if it’s tangible, movable and sells for over £6,000 it can fall under the Capital Gains Tax rules. That could mean anything from artworks, jewellery and libraries of books right through to certain kinds of machinery, vehicles and even wines. There’s an exemption for private cars, though, unless they’ve been used for business purposes. Also, anything with an expected life of 50 years or less will normally be exempt. The rules about this are easy to trip over, though so again it’s probably worth getting professional advice if you’re not sure whether an asset counts or not.

Of course, all these different kinds of loan aren’t much use if you don’t have a strong credit history to fall back on. That’s where credit builder loans come in. These agreements are built to put much-needed financing within the reach of people who couldn’t otherwise access them. The system works by the lender paying the amount to be borrowed into a savings account. The borrower then makes monthly repayments at a fixed rate for anything between 6 months and 2 years. Once the loan’s repaid, the borrower gets the cash back, possibly with some interest on top.

Why is this useful? Well, a credit builder loan is less about getting some up-front cash than it is about building up your overall credit rating. If you’ve only got a limited credit history, signing up to this kind of deal is a decent way to boost your score and make other lenders take you seriously, by establishing a track record of sticking to a repayment schedule. Of course, to make this work you need to be sure your lender’s reporting the deal to the organisations that track your credit score.

  1. You'll need enough in your bank account to cover the minimum payment each month
  2. If you only pay off the minimum each month, your balance won't be paid off by the time interest kicks in
  3. Making extra payments will keep your balance under control

This can get pretty complicated, very quickly, so we’ll keep it simple: The exchange rate is how much it costs to buy another currency.

For example, at the time of writing (Aug ‘22), you can buy one Euro for 84p - so 100 Euro will cost you £84. Give or take a few pennies! 

If you’re buying pounds with Euros, £1 will cost you 1.19 Euro.

And a US Dollar will cost you 83p.

When they say the pound ‘is strong’, that means it costs more. Exchange rates go up or down depending on market conditions. If you’re taking cash on holiday, it’s advised to monitor the exchange rate and shop around. You’ll find a few comparison tools online like Compare Holiday Money.

Read our guide: Understanding comparison sites

Hotels and airports tend to be the most expensive places to exchange currency.  And if you’re waiting until you get there to withdraw cash from the cashpoint, always do it in the local currency. Just don't forget to check if your bank charges ATM or foreign transaction fees.

However easy and convenient it is to use your bank debit card at home, they can be the worst way to spend on holiday. Most charge a foreign transaction fee. To give you an example, most standard debit and credit cards will charge a foreign transaction fee of around 2.75% to 2.99% every time you spend on the card. This means for every £100 you spend you could be charged £2.75 to £2.99.

Plus - and this is important -When you’re paying for anything by card, they’ll likely ask you if you want to pay in sterling or the local currency. If you choose pounds, the retailer does the currency conversion and rates can be poor. If you choose the local currency, your card does the conversion and will give you a better – if not the best - rate.

Again, it depends on your card type. Our advice? Do your research and choose the best overseas credit, debit or prepaid travel money card for you.

Back in 2017, mobile networks were stopped from charging customers extra to use their phones in other EU countries. Since Brexit, we here in the UK have lost this protection against roaming charges.

You can read all about it here, but the most important takeaway before you go-away is to check your mobile phone provider’s charges. 

Almost all the big companies have reintroduced EU roaming charges and many are introducing fair usage policies. For example, Giffgaff will allow members to use up to 5GB when roaming in the EU at no extra cost. They say that’s fair and reasonable as more than 90% of members use less than that when roaming abroad. 

There are a couple of practical things you can do to avoid excess charges or a shocking bill when you get back from holiday: 

  • Hook up to the free WiFi wherever you go.
  • Download films and music before you leave home.
  • Only upload holiday pics and vids when you get back.
  • And check your settings! You can switch off data roaming if you’re worried it might run up a big bill.

Think about it this way: you’re getting away from it ALL! A holiday is a great opportunity to have a break from your socials. 

If you’ve got travel money left over, converting this to pounds sterling is called ‘buying back’.

Currency buy-back services will buy your Euros, dollars or other cash at the current buy-back rate – that is how many pounds you can get for it.

If you’re offered a Euro buy-back rate of 0.8, for example, you’ll get 80p for every Euro you sell. 

You can choose which service to use – look for one that is offering you the best exchange rate and watch out for any additional fees.  

It’s good to know that if you bought your travel money at the Post Office and still have your receipt, they will buy back leftover notes without charging you commission.

This might be a bitter piece of advice for dedicated coffee drinkers, but those name-brand indulgences are flushing good money straight down the toilet. £3 per day quickly adds up to £15 per working week, then £765 per year. That’s more than enough to pay down a nagging debt or handle most kinds of emergency expenses.

If you really can’t live without coffee in your life, making it at home is a good way to bring the costs down. Even just switching to a less expensive brand will help in the long term. Cheaper places like Greggs and McDonalds might feel like a step down, but a lot of what you’re paying for with more expensive coffee just boils down to the brand name and presentation anyway.

If even that seems like a step too far, whatever big-name coffee brand you’re loyal to might actually have systems to help you out. Check out any incentive schemes they offer. Sometimes just bringing in your own mug can get you some kind of bonus or discount.

We talk a lot about budgets in these guides, and there’s a good reason for that. Setting yourself a budget is a lot easier than it looks, and it’s absolutely Job One when you’re taking back control of your wallet. Even if you’re just looking to save on your everyday spending, though, you’ll still need to learn how to make better use of your cash.

All you need to do to get started is work out what you’re spending day-to-day on average. Make an actual list, and try to paint as complete a picture as possible of where your money’s going. It’ll help if you separate it all out into categories (like “travel costs”, “work lunches” and so on). That way, you’ll be able to work out which ones are absolutely essential and which you can bring down. With that list in hand, you’ll be all set to start making savings.

Buying food when you’re out at work is one of those easily missed expenses that can become an “invisible” drain on your finances. After all, you’ve got to eat, right? It can be expensive buying prepared food every day, though, with average work lunch bills easily hitting anywhere between £3 and £10 per day. You might not notice the money trickling out like that, but over time it stacks up fast. Simply making a little extra at dinner the night before and taking the leftovers in to work with you can fatten up your wallet to the tune of £15-£50 a week.

This is another simple trick for keeping a firmer grip on your financial steering wheel. A lot of our overspending comes down to the fact that it’s been made so easy to part with our money. Wave a card at a machine or tap a button on our phones and the transaction’s done. It hardly feels like spending at all! If you’re looking dependable for ways to slow your expenditure, think about giving the plastic a breather for a bit and switching back to cash. Take the money out that you’ve budgeted for the week, and work your way through it. Setting a rule that you can’t spend what you don’t have in physical cash will really clamp down on any impulse spending. It sounds a little old-school by modern standards, but it really is one of the best, most reliable changes you can make to track what you’re spending and save money quickly.

While we’re on the subject of keeping track of the cash you’re parting with, it’s a good idea to make a solid habit of that. Seriously – set aside some time once a week to see how your actual spending measures up to the plans you made. A budget will only ever be as good as your ability to stick to it, after all. Recording your costs as they crop up will go a long way toward spotting and fixing any overspending you’re doing. You’ll also probably find a few opportunities to save even more along the way.

Free budget spreadsheet

Travel, whether it’s for work or anything else, is another one of those costs that we tend to think of as non-negotiable. If you’re going by train, though, you’ve got a few options that can make a big difference to the asking price of your ticket. The first thing to do if you’ve travelling by rail regularly is look into your railcard options. Grabbing one of those can save you up to a third of your ticket costs on its own!

The other thing to do is try to book your train fares in advance. Ticket prices tend to be cheaper the earlier you buy them, so the sooner you book the better the deal you’ll tend to get. By comparison, buying your ticket on the day could see you being charged an incredible five times what you would have paid if you’d booked a few weeks in advance!

If your travel to work is getting to be a problem, and you can’t see any way of bringing the cost down, you might try asking your employer if they run any schemes to help. It turns out a lot of businesses offer zero-interest loans for travel to work. Basically, your boss fronts you the entire cost of your travel, then you pay off what you owe through monthly instalments. Sorting out your travel this way means you can grab a discount season ticket you might not otherwise have been able to afford outright. Those tickets work out a lot cheaper than buying your fares on the day, and your repayments will come out of your salary automatically so you don’t need to budget specifically for them. Over the course of a year, you could easily be looking at savings worth hundreds of pounds!

Cutting down on everyday overspending is a marathon, not a sprint. It’s not about making occasional big, one-off savings. Instead, you’ll get better, more reliable results simply by chipping away at your day-to-day expenses consistently over time.

Take your daily cup of coffee, for instance – and yes, we know we’re on dangerous ground by asking you to cut back on that essential caffeine hit. The thing is, you don’t even need to cut back your tea or coffee intake to make savings. Just consider whether you could bring in your own from home in an inexpensive flask. That way, when you feel your energy levels flagging at work, you’ve got the solution on-hand instead of having to trek to the local cafe to top off your tank. Those store-bought coffees might not seem like a huge drain on your wallet at maybe £3 a pop, but a couple of those a day will run you £30 per week. That’s up to £120 a month you could save, simply by making one tiny change to your daily routine.

If you’re serious about saving money and developing better financial habits, take a look at our other guide, “4 Fixed Income Saving Strategies - Combine to Win!” That’s where you’ll find some of the very best budgeting tricks, like following the 50/30/20 rule and making “zero-based” budgets. In the meantime, keep checking back here for more money tips and updates. We’re experts at saving you cash and we’re always here to help. That’s the reason why you’re better off with RIFT.

Saving strategies for fixed incomes

So here’s where things get serious. When it comes to deposits, you’re probably going to be paying somewhere between 5% and 20% of your new home’s asking price up-front. As of 2021, the average value of a first-time buyer’s home was a little over £264,000. That means some people were being expected to front up well over £50,000 as a deposit. That’s at the upper end, obviously, but even a 5% deposit at that price comes to over £13,000.

The thing is, a smaller deposit might lower that initial hurdle quite a bit, but it makes the whole race track much steeper. The more you can afford to pay up-front, the lower your monthly mortgage payments will be. With a higher deposit, you’ll find yourself in a much stronger financial position for years to come.

Let’s slot a few numbers in here so you can see how it looks in practice. We’ll assume you’re putting down a deposit on a house worth £264,000. You decide to be fairly ambitious, and go for a mortgage deal with a 15% deposit. That means you’ll be paying about £40,000 up-front, which you’ve given yourself a target of 5 years to save. At that rate, you’ll be aiming to sock away about £660 per month consistently over those 5 years to hit your goal. Challenging, but not impossible, so let’s talk about how to make it happen...

Redundancies almost always come as a blow, but it’s important not to let yourself get too run down by them. It might sound like a cliché, but it’s so important to pick yourself back up as quickly as possible. Despite how it feels at first, this could be exactly the big shake-up you needed to move forward in your career – or even switch careers altogether. If you’ve been saving your pennies wisely (and following the budgeting advice in our other guides), you should ideally have as much as 3 months of your basic living costs socked away. Why not take some time to train up for the career you’ve always wanted?

Even if that’s not an option, the time to make redundancy plans is before the sky falls in, rather than after. Preparing for a big upheaval in your work life is worth a lot more than coping with it after it’s already happened. If you’ve been warned that redundancies might be coming at work, the time to act is now. You’ll be in a much better position to bounce back if the worst happens – and even if it doesn’t.

So what do we actually mean by preparation? As with so much of your other day-to-day financial planning, the first step is to take a good, hard look at what you owe. If you’re hit with a redundancy, for instance, the odds are good that you’ll wind up with a dent or two in your credit score. Lenders are going to think twice before extending you any kind of financing if you’ve taken a serious drop in your income. Now’s the time to get a firm grip on your debts, because they’re what’ll sink you if they get out of control while you sort out your work situation.

We’ve already talked about the value of having rainy-day savings. Here’s the bit that trips people up, though. When you’ve got debts racking up interest, paying off what you owe usually a much smarter move than putting savings away. The interest on a debt will almost always grow a lot faster than the interest on your savings, making you poorer over time. Using spare savings to wipe out expensive debts like credit card balances, for instance, will prevent them building up to nightmare proportions while you’re still finding your financial feet.

Read our saving strategies guide

Speaking of balances, there’s a delicate one to strike here. Yes, paying down what you owe is a smart and necessary move, before or after a redundancy. At the same time, though, you still need access to emergency cash. If you wipe out your entire rainy day stash blitzing through your debts, you’ll be risking some very hard decisions later if it takes longer than expected to land a new job.

As for specific, practical help you can get, it’s worth tackling the most important of your costs first. If you’re paying off a mortgage, for instance, you need to work out what kind of protection you’ve got to fall back on. There are schemes designed to help people through exactly this kind of situation, from both private organisations and the government itself. Search around and see if there’s one that’s a good fit for your situation.

Next, go back to your budgeting basics. If you’ve read any of our articles on building budgets, you already know how much easier they make your day-to-day planning. Simple systems like the 50/30/20 rule take very little work to set up, but the pay-off can be immense over time.

 

When you’re working out your budget, all you’re trying to do is plug the leaks in your finances by bringing down the costs you can control while protecting the ones you can’t. Have a look through our guides for more on budgeting, and try out our free 50/30/20 tool  for instant, practical help.

Free 50/30/20 tool

Tax debt is a situation that many people find themselves in from time to time. It can happen if you’re on the wrong tax code, for example, or if you’ve made a tax refund claim for more than you’re owed. However it happens, it’s important to solve the problem as quickly as possible. The longer you leave your debt unpaid, the worse the situation gets.

One of the easiest ways to end up dealing with a tax debt is when you file Self Assessment tax returns – or when you’re supposed to and don’t. Even if you don’t actually end up owing any tax, if HMRC’s expecting a return from you and don’t receive one, there can be problems.

This affects more than just the self-employed, too. There are several reasons why the taxman might be waiting for a Self Assessment return from you. Maybe you’re the Director of a company, or just making a little extra by renting out a room or selling regularly on eBay. Whatever the reason, if you don’t hit the Self Assessment filing deadlines, you’re probably going to get a penalty.

If paying up straight away is a problem, you’ve got a range of options for settling up -and HMRC is usually more than willing to help you find a solution that works for both you and them. Ignoring the problem won’t resolve it, though, and can lead to automatic fines and penalties.

Tax debts have a nasty habit of creeping up on you, mainly because people don’t understand the rules. The first many people even hear about a tax debt is when HMRC gets in touch about it. Pretty soon they find themselves fines and stacking penalties. Not long after that comes the phone call from HMRC Debt Management and Banking (DM).

You can’t afford to ignore a warning from HMRC that you owe a tax debt, even if you’re sure it’s a mistake. HMRC has a whole range of options it can pursue to reclaim the money they’re owed, including:

  • Direct Recovery of Debt, where they can access your bank account directly.
  • Selling your personal goods at auction.
  • Bankruptcy proceedings.

Here are some common penalties HMRC can apply:

  • Missing the Self Assessment deadline (31st of October for paper returns, 31st of January for online filing: £100.
  • Up to 3 months late: daily £10 fines up to a maximum of £900.
  • 6 months late: £300 or 5% of what you owe if that’s higher.
  • 12 months late: £300 or 5% of what you owe if that’s higher.

Keep in mind that HMRC automatically charges interest on late tax payments as well. If you’ve got a really good reason for missing the deadlines, you might be able to argue your penalties down or appeal against them. Don’t count on that, though. The list of valid excuses is pretty short.

The basic rule of thumb about contacting HMRC is to do it sooner rather than later. For starters, you’re going to want to ring them immediately if you’ve got a payment or filing deadline looming and you already know you’re not going to hit it. If the deadline’s already flown by, of course, the longer you wait the worse things will get. Sending up a distress flare early is the best way to limit the damage – or even avoid it altogether.

Another time to jump on the phone to HMRC is if you spot anything wrong with your tax statement. Mistakes on your Self Assessment can usually be sorted out easily before the deadline by just amending your tax return online. If it’s too late for that, you need to reach out to the taxman as soon as possible. You’ll probably have to sit on an automated queue for a while, particularly at busy times of year. It’s still a lot better than waiting for the mistake to catch up with you further down the line, though. If HMRC has to come looking for you, the ride tends to be a little bumpier.

As for how HMRC can actually help when you’ve got a tax debt you can’t pay, there’s actually quite a lot they can do. If you know you’re going to have problems paying up, you might be able to sort out a “time to pay agreement” with them. You’ll have to cough up a little interest on top of what you owe, obviously, but it’s better than choking on a debt you can’t pay off at all.

You’ll be expected to explain why you can’t pay in order to arrange a ''time to pay agreement''. That’ll mean forking over some information about what you’re routinely earning and spending. There might also be some questions about other family members’ earnings. Again, don’t resort to guesswork when you’re answering these types of questions. Arrange to call them back when you’ve got what they need.

If you’ve got any particular circumstances limiting your ability to pay, HMRC will want to know about these too. Any illnesses or business crises you’ve been weathering can be useful information, for example. Your agreement might involve paying off a chunk of your debt now, then the rest by instalments later. That’s a good option if you can afford the initial lump, as it’ll make the debt cheaper in the long run.

Once you’ve got your agreement in writing, you should also let HMRC know if your circumstances change. Don’t wait until you miss an instalment to get in touch. When it comes to paying off a debt like this, planning ahead is everything.

As for what to do when you’re already stuck with serious debt problems, you’ve got a variety of options. Again, the right approach will depend on the situation.

Debt Management Plan

One example is the Debt Management Plan. This is basically just an agreement to pay off your debts in an affordable way. They’re often arranged through specialist companies, who charge a fee to share out your repayments among the people you owe. You’ll need to provide some information about yourself and your circumstances, and the plan can be cancelled if you don’t keep to the agreement.

Administration Order

For debts up to £5,000 when you’ve got a County Court or High Court judgement against you, you might end up with an administration order. In this case, it’s the local court that divides up your monthly repayments among your creditors. While it’s not ideal, it does mean that the people you owe can’t take any more action against you without a court’s approval. There’s a court fee to pay for this, but it can’t be higher than 10% of your total debt.

Individual Voluntary Arrangement

Another option is an Individual Voluntary Arrangement (IVA). You make regular payments to an insolvency practitioner, who splits them between the people you owe. IVAs give you more freedom than declaring bankruptcy. However, you can still end up facing bankruptcy proceedings if you break their terms. Your creditors get a say in this as well, of course. Unless the people you owe at least 75% of the money to agree, you can't take out an IVA at all.

Debt Relief Order

For debts up to £20,000, you can sometimes get a Debt Relief Order to help soften the blow. If you qualify for one, your creditors will need a court’s permission to pursue you. Also, you’re generally considered clear of debt after 12 months. DROs are designed for people with very little spare cash, and who don’t own their own home. You’ll need to apply through an authorised debt adviser. If you meet the criteria (if you’ve got less than £1,000 of assets, for example), you pay a £90 fee to an “official receiver” and accept a few restrictions. You can’t be a company Director, for instance. You also can’t borrow over £500, open a bank account or manage a business without telling people about your DRO.

Bankruptcy

With bankruptcy, your situation is considered by the Insolvency Service. If they agree, and your debts are all unsecured, you'll again be given some rules to follow about handling your money and assets. Some of your property might be sold to pay your debts, and you might have to turn over things like bank cards. Even your home can sometimes be sold, depending on your circumstances. Despite this, bankruptcy really does protect you much as your creditors. Your pension savings, for example, are usually kept safe - along with your household essentials and anything you need for your job.

Remember we mentioned that the important thing is to understand you’re not alone? It’s so easy to get caught up in your own head when you’ve got debts that feel out of control. This goes for all kinds of debt, not just taxes. When there’s interest stacking up and legal threats looming, it can feel like a lonely and dangerous world. However, there’s a whole range of support for people with debt problems. The right help for you is going to depend on your circumstances – but in a lot of cases it might be as simple as claiming a tax rebate.

Every year, HMRC ends up sitting on many millions in unclaimed tax refunds – simply because people don’t realise what they’re owed. When you’re paid via PAYE, many of the essential expenses of doing your job can earn you tax back from HMRC each year. For most refund claims, this means getting tax relief for travel to temporary workplaces, but there are lots of other expenses you can claim for.

For the self-employed, the system’s a little different, since you’re actually being taxed on your profits. When you file your Self Assessment return, all the necessary costs of doing business count against the income you’re paying tax on.

In either case, the rules on expenses can be tricky to get your head around, so lot of people choose to get professional help. Getting your taxes sorted properly, whether on your own or with expert help, can be a big step toward ending debt problems before they start.

There’s a general rule that a lot of people cling to about managing money troubles – you can’t borrow your way out of debt. It’s broadly true, as far as it goes, but it really doesn’t paint the whole picture. For instance, while borrowing to pay off debts isn’t always a great idea, it is possible to trade an expensive debt for a cheaper one. Not all debts are equally expensive – just ask anyone who ever switched a credit card balance to another provider for a 0% interest rate. You’ve got to get a bit hands-on to make the most of things like this. Even so, you could lighten your load a lot with just a few careful moves.

We really do mean careful moves here. Don’t leap at the first quick loan option you find. Payday loans, for instance, are sold to you on the idea that they're easy to get and a fast way to nab yourself some short-term cash. That's all true, but you're really only squinting at the big picture here. If you don't keep your wits about you, you might just be digging a much deeper hole than the one you’re already in. For instance, let's say you get a payday loan of £600 for 6 months, at 0.75% interest a day. You get your £600 now, but at the end of the loan you'll be paying back a whopping £1138.29 – almost double what you borrowed. That's a “representative APR” (the interest rate plus all the associated charges) of 1,086%!

With any kind of debt, the first thing you need to do is get control of your spending. Once you’ve got a handle on that, it’s time to look at things like:

  • Checking what benefits, grants or other support you might be entitled to.
  • Finding out if you can claim a tax refund.
  • Making sure you’re in the correct Council Tax band – a surprising number of people aren’t.
  • Move credit card and other debts to cheaper providers where possible.
  • Considering whether it’d work out cheaper to remortgage your home to pay off high-interest debts. Be careful, though, switching an unsecured debt to a secured one like this can be risky.

A key thing to remember is that debt interest basically always stacks up higher and faster than savings interest. It’s painful to dig into your savings to pay off a debt, but it still means paying less over time.

If there’s one thing we still don’t talk about enough in the UK, it’s mental health. There’s still so much stigma attached to issues like stress, anxiety and depression – particularly in industries like construction. UK construction workers commit suicide at over 3 times the national average – and still so few people who are suffering feel like they can get the help they need. When you’re dealing with the toughest aspects of HMRC and debt, it can take a serious toll on your mental health.

Thankfully, HMRC does have a few policies in place to help people through difficult times. In fact, it’s their legal responsibility to make what they call “reasonable adjustments” to assist people with certain mental health conditions in using their services. Depression, for example, can count as a “disability” and be covered under the reasonable adjustments system.

Basically, if you qualify, HMRC can do a few things to make life a little easier when dealing with them. It may be as simple as contacting you in writing rather than over the phone, for instance, or taking extra care to make sure you’ve understood everything. You may be able to arrange for a relative or friend to speak to HMRC on your behalf, if you can’t handle it yourself. Even if your condition doesn’t fully count as a disability, you can still ask for HMRC to take it into account in their dealings with you. They’ve started taking mental health very seriously, working hard on improving their training to better accommodate sufferers’ needs. There’s even a “Needs Extra Support” (NES) system, where they tend to throw out their standard scripts and procedures in favour of offering more personalised, one-to-one help.

The thing is, they won’t know to offer you all this extra support unless you explain that you need it. You have to ask them to put a note in your file describing your condition or problem. That way, you won’t end up going round in circles every time you speak to a new person. As always, the sooner you ask for help the better things will work out.

When it comes to mental health problems, the first and most important step is recognising the signs. Crucially, it’s just as essential to learn to spot them in your colleagues, friends and family as in yourself. Here are a few early warning signs that you or someone else may be struggling with mental health.

  • Difficulty sleeping, concentrating or remembering things.
  • Feeling nervous, irritable or overwhelmed.
  • Feeling burned out or hopeless.
  • Lacking energy or motivation.
  • Increased heart rate, sweating, trembling or rapid breathing.
  • Feeling weak, restless or tense.
  • Gastrointestinal trouble or changes in your eating patterns.
  • Difficulty making decisions or engaging with other people.
  • Uncontrollable worry, panic or anxiety.
  • Suicidal thoughts.

That's a long list - and almost everyone can check off a few of those symptoms from time to time. The trick is recognising when you're getting swamped by things, and reaching out before it goes too far.

With debt problems, it’s tempting to look for “quick fix” solutions – but that’s usually a mistake. A lot of people simply end up swapping one set of debts for another, potentially much larger, one. The same goes for looking after your mental health. Any looming problem become a lot more manageable when you break it down into smaller steps. With debt, that can mean spotting the signs of trouble early, understanding the causes and making a plan to tackle them.

The exact same process applies to mental health. It can be tough to break the cycle of mounting money problems causing stress or anxiety – which then only worsen the money trouble. The best place to start is often with the practical side – cutting out problem spending and bringing down the cost of your debts. However, that won’t always be possible when your mental health is tripping up your efforts. Again, though, taking small positive steps is the surest way to get things moving in the right direction. That can mean coming to terms with the relationship between your mood and your spending habits, for example. Once you start spotting the patterns, it can get a lot easier to attack the problem at its roots.

If you’re worried about getting professional mental health help, don’t be. There’s a lot more to it than the old stereotypes of medication and side-effects suggest. In fact, a lot of mental health issues can be handled without ever getting a prescription, through things like Cognitive Behavioural Therapy. For many people, improving mental health is all about changing the way they think. It takes a little practice, but can be very effective if you stick with it.

The main point is to give yourself permission to take back control. Once you’ve seized the reins of your own mental health, you’ll be in a much better position to be proactive about your debts. While you’re at it, give yourself permission to get qualified help as well. There’s no shame in suffering from poor mental health, just as there’s no shame in struggling with debt. Don’t be fooled into thinking you have to tough out either alone. No debt crisis is impossible to fix, and there’s a whole range of organisations out there offering real, practical and judgement-free solutions. You can get free of your debts with the right guidance, and no one needs to suffer alone through a mental health crisis.

When debt issues lead to, or worsen existing, mental health problems, knowing where to look for help is critical. In terms of basic, practical guidance, you could do a lot worse than the Citizens Advice Bureau. They have a comprehensive service for debt issues, even if they’ve reached the point where people are repossessing your belongings. National Debtline is also a great option for free and confidential advice.

Stepchange is a charity dedicated to helping people conquer their debt problems, helping 650,000 people a year. They’ve got specialised services for people with mental health issues with a free advocacy system. While we’re on the subject, there’s a fantastic list of helplines and support groups for mental health issues on the NHS website, covering everything from stress and depression through to panic attacks and bipolar disorder. There’s even a specialist charity called The Lighthouse Club for the construction industry, where mental health is a serious issue. They have a dedicated helpline and even a construction worker mental health app.

Good planning, expert guidance and practical help will go a long way toward getting your fears and finances under control, and there are so many resources out there to get you back on track. Debt and depression both grow fastest in the dark. Don’t suffer in silence, particularly at the cost of your mental health.

Other useful debt contacts, charities and organisations include:

  • The Money Advice Service (0800 138 77 77)
    • Provides guidance on a range of money and debt problems, from moving home to starting a family.
  • Mental Health and Money Advice
    • An online advice service focused on helping people to understand, manage and improve their financial and metal heath.
  • Money Saving Expert
    • The largest UK consumer advice website, helping to bring down bills, tackle debt and save cash.
  • Debt Advice Foundation (0800 043 40 50)
    • A charity offering free, confidential debt advice.  Aims to give you back control of you finances
  • Mental Health Foundation
    • Organisation helping people to understand, protect and sustain good mental health.
  • Mind
    • The mental health charity, determined to help people understand the relationship between money worries and mental health, and to show them how to improve both.
  • NHS Moodzone
    • A no-nonsense survival guide for people suffering from financial stress.

We talked a bit about these earlier, but at heart a debt consolidation loan is just a way of getting other high-interest debts under control. Instead of making monthly payments to a collection of lenders, you take out a single loan to pay them all off at once. Once those other debts are settled, you’ll be left with only a single loan to clear – hopefully at a lower interest rate than you were paying before.

Debt consolidation loans can be great for people struggling with expensive debts like credit card balances. Depending on your situation and lender, you might end up with a fixed or variable interest rate to deal with, but clearing credit cards and other loans can seriously boost your credit score, simplify your monthly finances and potentially save you a lot of cash overall.

Read our guide: Debt and mental health

Before you even get off the house-buyer starting blocks, you’ve got at least one high hurdle to get over, and that’s the deposit you’ll need. Deposits are simply the down payment you have to make up-front before you can kick off your mortgage. Depending on your mortgage agreement, you could be looking at fronting up a minimum of 5% of the property’s value from the outset – but in many cases it’ll be a lot more.

There’s a careful balance to strike when you’re picking the right mortgage deal for you. The more you can save up as a deposit, the lower your eventual mortgage payments will work out. That means you’ll own your home outright sooner and have to pay less interest along the way. However, deposits can be a serious challenge to budget around, and a lot of first-time buyers feel like they’ll never be able to sock away enough to get a foot on the property ladder. See our guide, 6 Ways to Save for a House Deposit ” for more on this. For now, though, the government’s own mortgage guarantee scheme’s here to make things a little easier. If you qualify for it, you can put down as little as 5% up-front, with the scheme kicking in up to 20% of a newly-built property’s value (or 40% if it’s in London).

6 ways to save for a house deposit

This is another cool hack for shopping online. If you’re not keen on cashback sites or can’t find what you need there, a simple browser plug-in can do a lot of your bargain hunting for you.

Here’s how it works. Wherever you shop on the web, with a discount code extension installed your browser will give you a heads-up on any discount codes it can dig up for you. The Honey extension, for instance, works with over 30,000 sites and automatically applies the best discounts it can find to your online shopping cart. Combine that with some basic impulse control and you’ve got a reliable winning strategy for saving cash. Obviously, you do still have to stick to buying only what you need. After all, no discount will ever leave as much money in your pocket as not making the purchase in the first place.

  • Gym membership
  • Streaming services
  • Eating out
  • AND Socialising

If you’ve got the skills, taking the DIY route is absolutely the best way to cut down the cost of your home repairs. In fact, the longer the job takes, the more you’ll end up saving over the span of the work. That cost reduction frees up more of your overall budget to go into things like better materials – or simply back into your pocket. Keep in mind that you do need to be up to the task if you’re planning on doing all the work yourself. The UK is a nation of have-a-go heroes when it comes to DIY, and over 60,000 of us end up in hospital in an average year as a result. A single typical botched home repair ends up costing an extra £200 to fix, meaning a lot of us are paying more in the end than if we’d called in the professionals in the first place.

Don’t worry if you’re not an expert, though. You can still cut down your labour costs with a little advance preparation. Labourers charge hourly rates, and not all the time you’re paying for is spent on the most technical parts of the work. Even just tidying up and prepping the workspace ahead of time can save you money.

Sadly, the answer is a resounding yes! Depending on your situation, you could find yourself paying a few different kinds of tax as a student. Here are a few examples:

Income Tax

We’ve already talked a bit about this above but, even when you’re a student, when there’s money coming in the taxman wants his share. What you pay depends on what you earn in a year:

If you’re sharp-eyed, you’ll spot that you can actually earn a fair bit of cash before you start paying any tax on it. The Personal Allowance is the tax-free chunk of your earnings, and at £12,570 it means that a lot of students won’t have to pay Income Tax at all! Again, though, that doesn’t mean that HMRC won’t dip its fingers into your pocket. Remember we talked about National Insurance? Well, here’s what that looks like:

  • Class 1: 12% on income from £166 to £962 a week. 2% on anything over that.
  • Class 2: £3 per week if your profits are £6,365 or more.
  • Class 4: 9% on profits between £8,632 and £50,000. 2% on anything over that.

Tax on savings interest

This is still broadly lumped under Income Tax, but it’s worth mentioning separately. Students are usually in the Basic Rate tax bracket, and the rules say that means they can earn up to £1,000 of savings interest tax-free a year. When people earn enough to pay Higher Rate tax, that allowance drops to £500 a year.

VAT

Not everything you buy is eligible for VAT. When it is, the tax is simply lumped into the price tag so you don’t have to do anything (other than decide if you can still afford it). If you’re running your own business, you sometimes have to register for VAT and start charging it to your customers. You can then claim back the VAT you’re paying on some of your business costs. You won’t need to bother about this until you’re earning over £85,000 (as of 2019/20), so for most students it won’t be an issue.

Council Tax

Council Tax is charged on pretty much all UK properties, from mansions to caravans. It’s based on the value of the property, but there are some important rules for students to understand:

  • If everyone living at the property is a full-time student, no one has to pay Council Tax.
  • Halls of residence are usually exempt from Council Tax.
  • In properties where not everyone’s a full-time student, those who are won’t have to pay.
  • Part-time students can sometimes claim a reduction in their Council Tax, depending on their circumstances and where they live.

Read our guide: Council Tax Debt

Student Loans

Okay, so you won’t actually pay tax on your loan as if it were income, but the chances are you’ll be paying it off through the tax system. Again, there’s a threshold involved – meaning you won’t have to pay any of your loan back if you don’t earn enough to qualify. The threshold depends on the kind of loan you’ve got.

For 2019/20:

  • Plan 1: £18,935
  • Plan 2: £25,725

As for how you’ll be making those repayments, it all depends on the way you pay your normal tax. If you work for an employer, you use PAYE. If you’re self-employed, it’ll be in your Self Assessment tax returns. Some people might actually be both, meaning they’ll have to use both systems. They won’t end up paying double, though. The payments made through PAYE count against your Self Assessment tax.

Postgraduate loans are slightly different. For these, you start paying once your earnings hit £21,000, and on other income over £2,000 a year that you’re declaring via Self Assessment.

Can I get any tax credits or benefits?

The Universal Credit (UC) system doesn’t really care if you’re a student or not. You’ll still have to meet the normal criteria to qualify for it. If you’re studying full-time, you’ll need to fit one of the following descriptions to claim:

  • You’re 21 or under in full-time, “non-advanced” education (up to A-level equivalent), with no support from your parents.
  • You’re responsible for a child (included adopted or fostered children).
  • You live with a partner who’s eligible for Universal Credit.
  • You’ve hit Pension Credit age and live with a partner who hasn’t.
  • You’re disabled and getting Personal Independence Payments, Disability Living Allowance, Attendance Allowance or Armed Forces Independence Payments.

If you only study part-time, you might still be able to qualify for UC. There are a few other hoops to jump through, though, like being available for work. Either way, if you’re earning money while you’re a student, it can bring down the UC you can claim. That’s worked out based on the income you’re making minus a fixed amount to allow for expenses.

You apply for UC online, and you’ll be expected to provide some basic information about yourself and your circumstances (contact details, banking and financial information, etc.). You might have to ring up to book an appointment with a “work coach” - and won’t get your UC if you miss it!

If you're self-employed in the healthcare sector you may still be owed money. The difference is that you can’t claim a PAYE tax refund, since you’re outside of the PAYE system. Instead, you’ll record all your essential expenses in your yearly Self Assessment tax return. Those costs, which you’ll still need to have detailed records of, will then bring down the amount of profit you’re being taxed on.

Remember, the good habits you’ve built while saving for your new home don’t lose their benefits once the ink’s dry on your contract. Even after you’ve hit your goal and moved in, there’s still a lot to be gained from keeping your saving system going. Ideally, you’re going to want to stick to the 50/30/20 rule we mentioned before. That 20% you’ve got used to socking away is going to develop into an amazing investment in your own future if you stick with it.

Our standard charges are:

  • Tax refund if you're employed under PAYE: 28% of refund claimed + VAT (minimum fee £45 +VAT)
  • CIS Tax Refund including tax return £245+VAT
  • Tax returns from £95 + VAT (call us for a quote)

Read more about our fees.

When we receive your refund from HMRC we take out our fee and then pay it the refund to you. There are no up front charges to pay for anything. If you are not due a refund then there is no charge.

Before we send your claim to HMRC we sent a copy to you with a full breakdown of all the fees so you can clearly see:

  • The total refund
  • Our price that will be taken out of it
  • The VAT due (VAT goes to the government, as on all goods and services)
  • The amount you will receive

You will need to sign and send this back to us to say you have read, understood and agreed with it, along with a declaration that all the information you have provided about your claim is true. This means you will never be charged any fees you have not agreed to.

There are no further fees to pay, and no hidden charges.

All aftercare is included (if you need us to call HMRC on your behalf, if you have a problem you would like us to resolve with them, if your tax code needs correcting etc).

Your refund is covered by the unique RIFT Guarantee which means that whatever happens, your refund stays in your own pocket and will never go back to HMRC. If we fight any HMRC enquiries for you (still included in the cost) and if anything did go wrong (which it never has in 15 years) we would pay back the refund to HMRC ourselves.

We will also send you a reminder when it's time to see if you have a claim next year.

Does it apply to me?

The short answer is "yes".

While many people get their travel and work expenses reimbursed by their employers those in the Armed Forces, Construction Trades, Security and Offshore industries often don't.

To get the money back you have to put in a claim to HMRC to show what you've spent so they know how much to pay you back.

Sadly many people, 2 in 3, who are owed tax refunds don't claim them back - meaning they are losing a chunk of their wages.

It's our mission to improve knowledge about this so that all workers who should be claiming are claiming.

We know what it's like - time flies and it's hard to find a moment to get round to things.

The good news is, we take care of everything for you - the whole reason we do what we do is to take the stress off your hands and give you time back as well that hard earned cash.

All it takes is 10 mins on the phone or chat to get an average of £2,500 refunded. That's got to be the most valuable time you could spend on your phone today.

Once we've got your info we do all the chasing, calculations, sorting out the payments - and that's before we even get to our all inclusive aftercare!

Yes - absolutely! If you've paid too much tax, you're fully entitled to a tax rebate.

Travel and mileage tax refunds for travel to temporary workplaces are claimed under Income Tax (Earnings and Pensions) Act 2003, sections 336-339.

There's over 1000 pages of rules and regulations but our experts will get it sorted for you. They have qualifications from the Association of Tax Technicians, Associations of Accounting Technicians, and The Association of Chartered Accountants. Having these qualifications mean they are bound by all its rules, regulations, ethics and codes of conduct in addition to our internal standards.

HMRC can't issue automatic refunds for Work and travel expenses because it's not based on information they have - like your salary or tax code. You have to prove what you've spent and claim what you're owed, which puts far too many people off getting back their own cash.

I'm not sure I have the info?

To make your claim the key things we need to know are:

  • How much you earned
  • How much tax you paid
  • Where you work, 
    How much tax you paid
    Where you workem, who you worked & how you travelled there
    How much you spent on work related expenses (travel, uniforms, tools, etc)
    Don't worry if you haven't kept exact records of everything for the last 4 years.

We have access to a number of specialised custom built systems that link to HMRC, Government depts, DVLA, travel routes, etc and can get the information for you.

I don't know anyone who's done it.

You're absolutely right to be cautious. There's a lot of scams to be aware of and a word of mouth recommendation from someone you trust is the best way to be sure.

We don't know who your friends are, but if they're in the Armed Forces, Construction Trades, Security or Offshore ask them if they've used us. 97% say they would recommend us.

A lot of people have - we've helped 130,000 customers make claims in the last 20 years - but British people don't really talk about money so it's not something that tends to come up in conversation.

Otherwise, check us out on Trust Pilot. It's the next best thing.

First we need to talk to you on the phone or online run through some questions about your work and travel and tell you how a claim is made.

If you would like to claim for you we send you a form to sign that lets us talk to HMRC on your behalf to do that.

We'll then give you your own Personal Tax Specialist who will gather all the information needed to calculate exactly what you're owed.

We send you the total to approve the amount and what our fee comes to and then submit it to HMRC for you.

You don't pay any fees upfront. To make it simpler for you we take the fee from the refund total and then pay it into your bank account.

Another tip is to look again at the numbers you crunched when you set up your 50/30/20 budget earlier. While your rent definitely went on your “essentials” list, if you can move to a place that costs you less while you save for your deposit, you could hit your goal much faster. Shaving £100 of your monthly rent, for instance, would see you saving an extra £1,200 a year.

It actually goes a little further than that. If you move to a smaller place while you save, it’ll probably cost a little less to run. Your energy bills will be lower, for one thing, along with your Council Tax.

Read guide: Dealing with council tax debt

Another option is to look into a “property guardian” arrangement. Some property owners will put a roof over your head in exchange for you looking after the place for them and keeping squatters out. Failing that, even just renting a room from a homeowner can mean a significant boost to your saving potential. Some people - particularly older homeowners - will charge you very reasonable rents in exchange for helping out around the house or running a few errands once in a while.

Draught proofing your home could be worth a decent chunk of change at the end of the year. It’s one of the simplest things you can do to cut down the heat you’re wasting, too. While it’ll probably cost a couple of hundred pounds to get your draught proofing done professionally, it’s not that hard to do if you’re into your DIY.

You should think about your windows, obviously, but there are plenty of other ways to stop letting the warmth out. Your front door’s an obvious culprit, from the gap underneath to the keyhole and letterbox. You should also take a look at your pipework, loft hatches and even your chimney. If you’re not actually using your fireplace, just draught proofing your chimney could save £18 a year on its own.

You might well find yourself on an emergency tax code if your new employer can’t check your P45. If this happens, you’ll see one of these codes on your payslip:

  • 1250 W1
  • 1250 M1
  • 1250 X

These codes are only ever meant to be temporary, so it’s a good idea to get your proper tax code sorted out as quickly as possible.

Sometimes, you might get your tax refund handled automatically through the PAYE system. If HMRC already has all the information it needs to work out how much tax relief you’re owed, then they can alter your tax code to make sure you end up only paying the tax you actually owe. There are a couple of potential hiccups with this system, though. For one thing, HMRC can only refund you the tax for any work expenses they already know about. When you travel for work, for instance, HMRC won’t automatically know how much mileage you’re doing or what other costs you're running up just to do your job.

The other problem is that your work expenses will probably change from year to year. When HMRC changes your tax code, it assumes your work costs will always stay the same. That means you’ll probably end up on the wrong tax code – which is something you really want to avoid. In either of these two cases, you’ll need to make a full tax refund claim to get back everything HMRC owes you, and you’ll need to get your tax code fixed quickly if it’s wrong. Thankfully, this is something that RIFT will automatically take care of for you when we sort out your tax refund paperwork. There’s no extra charge for this; it’s all part of the RIFT service!

No, if you aren't footing the bill yourself you can't claim back tax on the costs.

There's another little wrinkle here, too. Suppose your employer has provided you with a laundry room, but you don't like to use it for some reason. Maybe the machines sometime chew your socks up, or maybe the place just smells funny. Either way, the fact that those facilities exist means that you can't claim a uniform tax rebate. Likewise, if you're getting reimbursed for your costs already, you can't claim for them.

Another important point is that employers sometimes arrange to sort out tax relief on your behalf. In those cases, you obviously can't claim it again. However, not everyone realises that the arrangements are already in place when they make their claim. Fortunately, the taxman understands how this can happen. Probably the worst you could expect is a polite letter from HMRC explaining why your claim was denied. Obviously, it's still better not to make the mistake in the first place, though.

Your main thermostat isn’t the only way to control your heating system, and not every room in your home is going to need the same amount of heat. Depending on your situation, this could be as simple as turning down the radiators in rooms you’re not using much. Closing doors to rooms you’re not using can make a difference too. The Energy Saving Trust say, if you’ve got thermostatic radiator valves you could save even more. Fitting these could save you £75 a year.

If you’re looking for more ways to take some of the financial pain out of buying your first home, you could do worse than to look into the Help to Buy Equity Loan system. This is assuming you’re actually buying a place to live in, rather than as an investment or second home. The rules for these loans say you have to front up at least a 5% deposit, but can then borrow up to 20% (40% in London) of your new home’s market price, interest-free for 5 years! The rules have a few wrinkles in them that it’s worth keeping in mind, so check out the gov.uk site for more details.

  • Mortgage or rent
  • Household Bills
  • Food Shopping
  • Transport
  • Credit cards
  • AND Work-related expenses, like travel

Estate agents tend to base their charges on a percentage of the sale price of the property they’re handling for you. This means you’re typically looking at a fee of 0.75% to 3% of the property price plus VAT. This can vary depending on the type of contract you’ve got with them – so again, go in with your eyes open so you don’t get caught unawares by this.

You've got a few options to match what you're hoping to do with them:

  • Bond ETFs can be a good way to get a steady income from your investment. Like any other ETF, what they pay out based on how well the individual investments are doing. In this case, those investments will be some combination of government, corporate and municipal bonds. However, while those kinds of bonds come with fixed end dates, an ETF made up of them doesn’t.
  • Industry ETFs are investments that track the overall performance of a specific sector. Instead of investing in any one company, you’re spreading your cash across a broader view the industry so all your eggs aren’t in the same basket.
  • Commodity ETFs are generally for people who want to invest in something pretty tangible, like wheat, oil or gold. Again, though, they’re about “diversifying your portfolio” of investments and protecting your money from a drop in the stock market. It’s a bit like owning a stash of the commodity itself, but without the related storage costs and other expenses.
  • Stock ETFs are a good way of investing in a particular industry without having to buy individual stocks. You’re getting most of the good side of investing in a basket of equities with less hassle and expense than normal stock mutual funds.

 

While we’re talking about draughts, a few decent excluders will go a long way toward making the most of your energy use and cash. Draught excluders can help shore up the savings when you use them alongside your basic draught proofing. They’re easy to get hold of – or even to make yourself. Just a large piece of fabric stuffed with rice can make a decent enough excluder. You’ll need to think about where you use it, though. Draught excluders can be great at their job, but they’re only as good as where you put them. Stick one under a door, for instance, and it’ll be next to useless the first time someone opens it. Better to use an inexpensive weatherbar or brush strip in those cases. They’re attached to the door, so they won’t get nudged out of position when it moves.

Gym memberships always seem like a good investment at the time. You’ve put your money where your mouth is, now all you’ve got to do is stop filling that mouth full of chips, right?

The trouble is, with any investment, you’ve got to think about the returns you’re getting. Suppose you hit the gym 3 times in a month on a £30 membership scheme. That’s £10 per visit – and you’re paying the same even if you never set foot through the door!

Instead of pricey subscription packages, invest in a cheap set of weights or resistance bands. You can get them easily online, and YouTube is packed with free exercise tutorials you can follow from home. No monthly fees, no travel costs to factor in and nothing to stop you reaching your financial fitness goals.

This is crucial. Don’t assume you’ve anticipated every cost or problem you’re going to run into. When you’re building a budget around home repair bills, you’ve got to expect that you’ll hit snags or delays along the way. Sometimes, all they’ll end up costing you is time – but you can’t afford to count on that. If you find yourself needing to add work-hours or extra materials to the job, you’ll feel the pain of them in your wallet – and you’ll be glad you allowed some breathing space in your budget just in case.

If you’re claiming for more than £2,500 in work expenses, HMRC will expect you to send them a Self Assessment tax return to claim your tax refund. As always, RIFT will take care of this for you when we handle your HMRC tax rebate. We’ll get you registered and make sure your tax return’s filled in and submitted correctly.

Read our guide: Tax Returns

A “tied” adviser, is someone who really only handles products from a single supplier. You can expect them to have detailed knowledge of that company’s products, but you probably won’t get a full picture of the alternatives available elsewhere.

A “multi-tied” adviser, is similar to a tied one, but will be able to help you with a wider variety of suppliers and options.

A “whole-of-market” adviser, is someone whose advice would cover a much larger range of providers and products. These are similar to Independent Financial Advisors in a lot of ways - but not all, as we’ll see in a moment.

Pensions can be kind of a scary business sometimes and, in a few important ways, they’re a lot more complicated than they once were. You’re making big decisions when you plan for retirement. You’ve got a huge responsibility, and your choices can affect more than just your own future. Even if your money situation’s fairly simple, you could easily be looking at spending decades in retirement, so you’ve got to find a way to make your savings last.

So, where do you go to get solid, trustworthy advice when you’re heading toward your last few working years? More to the point, what’s it going to cost you? Here’s a basic breakdown of the kind of help you can find, and a few ideas on how to pick an adviser that suits your circumstances.

Guide: How much do you need in your pension pot?

Good question – and not always an easy one to answer.

It’s obviously best to go into any major money decision with good advice. That’s just common sense. Even so, paying for an Independent Financial Adviser (IFA) to look at your situation may not always be worth it.

Don’t get us wrong – there are plenty of reasons to talk to a financial adviser. You might find yourself in an unusual or complicated financial position, for instance. Maybe you need help setting goals or understanding the risks of investing. On the other hand, if you’ve got relatively simple needs and plans, flushing a load of cash away on an adviser might not be a good foot to set out on in retirement.

Generally speaking, the less money you’re playing with, the less help you’ll probably need managing it. However, every decision you make will matter – so again, blowing a ton of cash on professional advice may not be the smartest move up-front.

So, how much money are we talking about here? Obviously, there’s a range of prices on offer for financial advice services, so a lot depends on where you’re looking and what you’re asking for. Also, it’s easy to get wrong-footed at the start with offers of free first consultations. By all means, take advantage of these, just to test the water. Keep in mind, though – you could well be looking at a sudden bill of up to £500 the next time you set an appointment.

Once you’ve picked an adviser (and a price) you’re comfortable with, you’re probably going to find yourself staring facing an hourly rate for your actual advice. Prices for this kind of help can feel pretty steep if you’re not prepared. We’re talking in the range of anywhere between £75 and £350 an hour here, with £150 per hour being a reasonable average to expect.

Things change if you’re looking for more of a “hands-on” style of financial help. For instance, you might need your adviser to take more of a long-term role in handling how your retirement money’s invested. At this point, the costs involved will largely depend on the size of the portfolio you’re playing with (basically, what’s in your investment “basket”). Typically, you’ll be charged a percentage of the total value of your investments. Again, there’s a range of prices for this kind of direct management, but you’re probably looking at somewhere between 0.5% and 5%.

The bottom line of all this is that the kind of advice you need with your retirement savings – and the price it’s worth paying for it – will depend on what your actual goals are. If you’re still thinking about that, we’ve put together two articles to help point you in the right direction:

Pension or ISA

SIPP or ISA

So, right now you’re probably wondering what you’re actually getting for all this money. Maybe it’s even starting to look like it’s not worth paying an adviser in the first place. The thing is, getting professional advice on your pension can genuinely be a financial life-saver. In fact, there are times when it’s actually a legal requirement.

The first thing to realise about choosing your adviser is that there’s a world of difference between the real professionals and the dodgy financial “cowboys” out there. The choices you end up making for your retirement cash will only be smart if the advice you took when making them was good.

You do have a fair bit of protection to fall back on, in the form of the Financial Conduct Authority (FCA). The FCA actually has a list of “dodgy dealer” financial advisers you should absolutely avoid, along with a page for reporting any scams or scammers you might run into. There’s a limit to how protected you can be, though. While the FCA’s general rules about how an adviser conducts its business cover all IFAs in the UK, that doesn’t mean they have to keep your best interests at heart in everything they do. Here’s where things get a bit technical – but bear with us for a minute. Financial advisers in the UK aren’t strictly required to stick to “fiduciary standards”. These are basically a set of rules that determine how trustees (people making financial decisions for someone else) take care of the assets of beneficiaries (the “someone else” – in this case, you). IFAs aren’t technically bound by these standards, but the FCA is still constantly pushing to make things safer for you. So, what about the times when you absolutely have to get financial advice? Are you protected then? Take pensions, for example. If you’re trying to transfer a pension that’s worth over £30,000, the law says you need to get advice on the process. Your financial advisor has a responsibility to stand behind the advice they give. When that advice falls short, there are complaints procedures and systems of compensation to help you limit or undo the damage.

It’s worth keeping in mind that the term “financial adviser” isn’t just describing one thing. Depending on what you’re looking for and where you’re looking for it, you might end up talking to a range of different ones.

Another thing to remember is that most advisers you’re dealing with will be looking after their own money as much as yours. Almost all of them will be taking a commission from the providers you end up choosing based on their advice. Yes, they might well be taking your money in exchange for steering you in the right financial direction. You won’t be the only one who’s paying them, though. While that may be obvious enough when you’re talking to a tied adviser, it’s also true of the whole-of-market ones. They’ll certainly want you to be happy with the choices they offer you – but they’ll have financial goals of their own to look after, too.

In the investment world, you can see this kind of thing in action pretty clearly. When choosing between “active” and “passive” investments, you’ve likely to see an investment manager being held up as a big selling point of actively managed funds. It makes sense, after all. Having an expert directly looking after your investments can only be better than going it alone, right? In fact, when put to the test, about 90% of the “passive” index tracker funds that were measured performed better over 20 years than the actively managed ones. Even over just 3 years, there was no real benefit to active investments. Basically, you could argue that investment managers can sometimes be more interested in what makes them money than in what gives your investment the best chance of growth.

So, let’s look at IFAs again. As we mentioned above, they’re not that different from whole-of-market advisers, since they’re not tied to any specific company. That means they can give you the widest possible range of advice. Yes, some of them will still get a commission when they steer you toward specific options or providers. That’s not true of them all, though. Some IFAs do work purely for the flat-rate fee they charge you for their time, effort and expertise.

By and large, an IFA will offer the most custom-built advice, factoring in your full personal situation, plans and goals. This is true whether they work for a larger IFA company or are just in business for themselves. If you’re looking for a truly independent opinion on how to sort out your retirement finances, then this is probably your best chance of getting one.

LISAs aren’t the only government system set up to help first-time buyers. For instance, the First Homes scheme (only available in England) can offer what are basically discounts of 30%-50% on the market value of your first home. There are a few limits on who qualifies for this, of course. You have to be 18 or over, a first-time buyer and your total household income can’t be more than £80,000 (or £90,000 in London). There are a few other twists and turns in the rules, and some councils prioritise certain types of buyer over others, but it’s definitely worth looking into if you think you might qualify. You can find all the basics on the gov.uk site.

Another smart option if you’re having trouble putting the cash you need together is to opt for a shared ownership arrangement. This is another scheme built to help first-time buyers grab that all-important first rung on the property ladder. Essentially, what you’re doing is buying a share (10%-75% of the total value) of a property from its landlord. A lot of the time, this will be a council or housing association. You then pay monthly rent at a reduced rate. You’ll still need to arrange a mortgage to buy that initial chunk of your new home, but it should be a lot more affordable than buying it outright from the start. As time goes by, you can gradually increase your share of the property until you own the whole place.

If you’re not going to need access to your savings cash for a while, you might consider opting for a fixed-rate cash ISA. These accounts pay out a pre-determined rate of interest over an agreed term. The interest you’re offered will probably be higher than you’d get with something like an easy access ISA, but you’ve still got to consider whether inflation will mean you’re actually losing money overall.

Opening a fixed rate cash ISA is pretty simple. You load it up with money up to a set limit, with your interest coming in either at the end of the fixed term or on a yearly or monthly schedule. The actual interest rate you get with one of these ISAs can vary according to the length of time you’re happy to lock away your cash. Typically, longer terms offer better rates, but the differences can be pretty minor.

Obviously enough, putting your savings into a fixed term ISA means it’s a lot less easy to get hold of it in a hurry. If you take your cash out before the term’s up you can find yourself hit with penalties. Also, since your interest rate is fixed when you open the ISA, you won’t see the benefit if rates go up more generally. Even if you rate’s decent, as we mentioned earlier, if it’s outpaced by the rate of inflation you’re going to find your savings dropping in real-world value. When inflation’s high, even the top interest-paying ISAs are going to struggle to keep up with the rising cost of living.

So overall, fixed rate cash ISAs are a pretty stable choice if you’re not ready to risk your money on a stocks & shares one. When the financial climate’s in your favour, they pay out reasonably well. On the other hand, when interest rates are low and inflation’s high, they really don’t stack up against other options.

Switching your energy supplier is often called out as a smart way to bring your bills down – and there’s a good reason for that. Sticking blindly with the same company without shopping around for better deals is a short-cut to overpaying for your energy. For one thing, if you’re on a limited-term fixed tariff and that term runs out, you could easily find yourself shunted into a much more expensive variable rate automatically. That’s a trap loads of people fall into without ever realising.

Shopping around’s a good idea before making any big decision. When you open a new bank account, for instance, you could grab all kinds of bonuses for signing up, from cashback to special savings rates. With your gas and electricity suppliers, though, it’s worth understanding the way the system works before making your mind up.

When Ofgem, the UK’s energy regulator, bumped up the maximum rate companies could charge you, suppliers basically fell over themselves to raise their rates as much as they legally could. This meant that, for people whose fixed rates were expiring, Ofgem’s price cap was the cheapest rate they could shift onto wherever they looked. Overall, average UK households found themselves looking at bills of £1,277 per year (or £1,309 for those on pre-payment deals).

So by all means, hunt around to see what deals are on offer. Just keep in mind that locking in a fixed rate doesn’t always do as much as you’d hope to save cash when energy prices start soaring across the board. You’ve got to make some changes of your own to make the most of your money – and that starts with understanding how much energy you’re actually using...

Okay, stick with us because this one sounds a bit odd at first. Take your spare cash and stick it in an envelope each month. We overspend so often because it’s being made too easy for us. Ditch the digital purchases and go cash-only for anything outside your essential outgoings.

We can easily get detached from what we’re actually spending when we use cards. Now, instead of waving your plastic at a machine every time you go to the pub or cinema, you pull cash directly from your envelope. This guarantees you stay inside the limits you’ve set for buying non-essentials.

Having an actual running total of your budget in your hands is a great way to keep track of your spending and stick to your goals. As your envelope gets lighter, you know to slow down. At the same time, because you’ve specifically set it aside as fun money, you know that every pound from that envelope can be spent with a clear conscience without blowing your budget.

 

How to work out your ''fun fund''

Even once you’ve moved all your existing stuff into your new place, you might not be finished. Maybe you’re moving into a bigger place than before, so your old furniture’s no longer fit for purpose. The previous occupant of the place, assuming there was one, probably won’t be leaving much of their own stuff behind, so remember to add in the costs of anything extra you need to buy to flesh out your new living space.

It takes a few weeks to put together a really comprehensive tax refund claim.  As soon as you're happy to go forward, we'll send your claim to HMRC for approval.  It can take 8-10 weeks for the taxman to check your details and confirm your refund total, so the sooner you get us the information we need the sooner you'll have your money.

The best way to speed up your RIFT Tax Refund is to get your Authorising your agent (64-8) form back to us fast.  This is the form that lets us tackle the taxman on your behalf.  Without 2 physical copies of your 64-8 document, HMRC won't even speak to us about your claim.  It's annoying, but it's all about protecting you.

As soon as your refund's paid out, we'll either send you a cheque or pay it into your bank account if you prefer.  The choice is yours.

Have a look at our 'How Long Does A Tax Refund Take' page for more information about how long it takes to get your tax refund done and some pointers for how to make things happen as fast as possible.

Remember that you can claim for the last 4 tax years and you can make your claim at any time.

Please do!

Not only will you be doing them a big favour if you can get some cash back in their pockets but we'll pay you a £50 referral reward for anyone who does go on to claim through us.

Until the 9th of October we'll also pay you an extra bonus of £150 if 5 people claim with us (T&Cs apply)

If you tell them to apply now they'll get their tax refund in time for Christmas and you'll get something extra to stuff in your stocking. That could be £400 in your pocket as well as the warm glow you get from helping out your mates.

To get started:

  • Simply enter your friend’s name and email address using our referral form, and we’ll send them a one off email to let them know you think RIFT tax refunds could help them.
  • If they get in touch and claim a refund, we’ll send you a £50 reward for your help.
  • And for every 5 you send that claim, you get an extra £150 bonus.

Not sure which friends could claim? Find out more about who can claim tax refunds.

There's no limit to the number of people you can refer and we pay out the rewards every week. It could be a nice little extra in your pocket, as well as the lovely warm feeling you get from knowing you helped out a mate.

Find out more about the referral scheme.

 

In HMRC's language, a tax rebate is "a refund on taxes when the tax liability is less than the taxes paid".  What it's definitely not is a prize or a dodgy way of ''cheating the system''.  When you're owed a HMRC tax refund, it's because you've already paid too much tax.

When you're paying your own way to temporary workplaces, the odds are good that you're owed some tax back for your expenses.  ''Temporary'' here just means it's somewhere you're working for less than 24 months on the trot.  It's worth making sure you get back what you're owed, too.  You can claim a tax rebate for up to 4 years, with an average 4-year rebate with RIFT coming to £3,023.

A lot of the time, people don't even realise how many of their day-to-day expenses qualify for tax relief.  Unless you prove to HMRC what you're owed, though, the taxman won't have the information he needs to settle up.  The tax rebate system's a little clunky in places, but RIFT's on-demand, 1-on-1 service means you'll never get lost or lose out. 

Just answer a few simple questions and we can tell you whether the expenses you've had to pay out in the course of your work meant that you may have paid more tax than you should.

You can also use our tax refund calculator to see how much you are due if you do make a claim.

 

Our standard charges are:

  • Tax refund if you're employed under PAYE: 28% of refund claimed + VAT (minimum fee £45+VAT)
  • CIS Tax Refund including tax return £245+VAT
  • Self assessment from £95 + VAT (call us on 01233 628648 for a quote)

Don't worry if you had a mixture of self-employed and PAYE (employed by a company) work during the period you want to claim for. We can work out if you would be due a refund and let you know what the fee would be.

See our full list of services with prices and options.

When we receive your refund from HMRC we take out our fee and then pay it the refund to you. There are no up front charges to pay for anything. If you are not due a refund then there is no charge.

Before we send your claim to HMRC we sent a copy to you with a full breakdown of all the fees so you can clearly see:

    The total refund
    The cost of our service
    The VAT due (VAT goes to the government, it's charged on almost all goods and services)
    The amount you will receive

You will need to sign and send this back to us to say you have read, understood and agreed with it, along with a declaration that all the information you have provided about your claim is true. This means you will never be charged any fees you have not agreed to.

There are no further fees to pay, and no hidden charges.

All aftercare is included (if you need us to call HMRC on your behalf, if you have a problem you would like us to resolve with them, if your tax code needs correcting etc).

Your refund is covered by the unique RIFT Guarantee which means that whatever happens, your refund stays in your own pocket and will never go back to HMRC. If we fight any HMRC enquiries for you (which is included free of charge) and if they did demand any money back, we would pay back the refund to HMRC ourselves.

We will also send you a reminder when it's time to see if you have a claim next year.

If you don't have a P60 we you can use your last payslip or income statement. We can also get copies of the P60 directly from HMRC.

Visit our checklist for details of the documents you need and what to do if you are missing anything.

You can reach us on the phone or Livechat   

  • Mon-Thurs: 8:30am – 8:30pm
  • Fri: 8.30am – 6:00pm
  • Sat: 9:00 – 1:00pm

You can email us or send us a question or feedback through our contact page at any time and you can leave us a private message through our Facebook page.

A tax return is a form you use to tell HMRC about your earnings and expenses. It's a complete overview of the taxable income you've made and the costs of doing business you've faced.

A tax refund is money HMRC gives back when you've paid too much tax. There are several reasons why you might overpay, and you often have to file a claim and prove you did.

There’s basically no acceptable excuse for missing self assessment tax return deadlines, even if you don't owe HMRC anything. If you miss the deadline there are a number of self assessment tax return penalties that you could be hit with:

  • £100 automatic fine for filing even a single day late,
  • £900 in penalties can stack up over the next three months
  • £3,000 for each year you can’t provide the necessary records

We’re here to take care of everything - from completing your tax return, through calculating any refunds due, to speaking to HMRC on your behalf. You can also get more self assessment tax return tips and advice here with some clear "dos" and "don'ts".

Find out more about self assessment deadlines and penalties.

If you’re in the right age group for it, the Lifetime ISA scheme could be a very smart option when you’re looking to scramble together a house deposit.

Top things to know:

  1. Lifetime ISAs are for people between the ages of 18 and 40 and either buying a home or setting up savings for later in life.
  2. You can pay up to £4,000 a year into your Lifetime ISA until you hit 50 years old. Your first pay-in needs to be by the time you’re 40, though.
  3. Whatever you pay in, the government tops it up by another 25%, up to £1,000 in top-ups per year.
  4. When you turn 50, you can’t pay anything more into a Lifetime ISA.

Keep in mind that the £4,000 yearly limit is part of your normal ISA limit. No matter how many ISAs you have, you can’t pay in more than £20,000 (as of the 2021/22 tax year) across all of them.

As for how you can use the money in your Lifetime ISA, the rules are:

  1. You can take the cash out to buy your first home, as long as it’s worth £450,000 or less. You can’t do this until at least 12 months after you first paid into the ISA. You also need to be using a conveyancer or solicitor for the purchase, and to be getting a mortgage.
  2. You can also take money out if you’re over 60 years old or have less than 12 months to live. If you take cash out for any other reason (known as “unauthorised withdrawals”), you’ll lose 25% of it.
  3. If you’ve got one of the old-style Help to Buy ISA, you can’t use cash from both that and a Lifetime ISA to buy your home. You can still transfer cash between them, though. Just make sure you don’t go over the £4,000 yearly limit when you do it.

Smart meters are pretty common these days, and they’re actually really useful. That little monitor sitting on your windowsill is constantly talking to your meters to track all the energy (and cash) you’re burning through and reporting it back to you. That’s incredibly handy information to have on tap when you’re trying to cut down on waste.

For one thing, that constant reminder of what your energy’s costing you is just the boot up the proverbials that most of us need to do simple, easily forgotten things like switch off unneeded lights.

It gets better. Getting a smart meter fitted can actually unlock better rates and plans from your energy suppliers. Getting detailed, more-or-less real time information on your energy use allows companies to customise your deal to offer cheaper rates at different times of day, like “off peak” periods when there’s less overall demand. With less “pressure” on the grid, it gets cheaper for businesses to supply your energy. That means they can “reward” you for using energy in those cheaper periods with a break on your rate. Armed with that information, you can then plan out your energy use to make the most of the cheaper times – like running your washing machine overnight, for instance.

In fact, smart meters are such a win/win proposition for you and your supplier that most companies will install one in your home for free! If you’re renting, you don’t technically even need permission from your landlord to get one, as long as the bills are in your name and you’re paying them yourself. That said, it’s probably still a good move to talk it over with them first, if only for the sake of a quiet life.

Naturally, what you stand to save by taking control of your energy use depends very much on what you do with the information. Smartening up your meter could easily mean you save an average of over £21 a year off your bills, though.

Do smart meters really save you money?

The clue to understanding price comparison sites really is in the name. If you’re on the site, the chances are you’re looking for a good deal on cost. For a lot of people, that’s all they need to know to make a decision – which can actually cause a couple of problems. If you judge a deal purely by how much money it costs, there’s a strong possibility you’re going to walk away with a product that doesn’t offer everything you need. According to a 2016 report from the Financial Conduct Authority (FCA), there’s serious concern about the number of people ending up with insurance that simply doesn’t give them the coverage they think it does. A good deal doesn’t start and end with its price tag. You’ve got to be absolutely sure of what you’re getting for your cash – particularly with insurance, where you usually only realise you don’t have good cover when you try to make a claim.

Consumer group Which? also spoke up about its worries over people not getting what they thought they were paying for. They talked about a “picture of inconsistencies and a lack of real choice that could be leaving consumers at risk of purchasing policies that simply don’t meet their needs”. In fact, 6 out of 10 of the offers they checked from GoCompare, Comparethemarket, Confused and Moneysupermarket didn’t even match what people actually got when they bought them. Some made false promises of perks like courtesy cars, while others only really offered half the cover limit they claimed!

Here’s another thing people often don’t realise about price comparison sites: they don’t actually all show the same prices. A comparison site is a lot like a marketplace. Suppliers are laying out their stalls with their various offerings, but they’re not necessarily charging the same price at every market they set up in. Furthermore, while some businesses do have agreements with comparison sites that say they won’t offer their products or services cheaper on a rival site, this actually works against the whole idea of competition.

Despite the cautions and drawbacks, a price comparison website can still be a great time and money saver – providing you’re prepared to sign up to several and compare them against one another. It sounds strange to have to compare the comparison sites themselves, but it’s still basically the only way to know if you’re getting the best deal you can. Yes, it’s super-convenient to have all the deals listed in one place – but if that’s the only place you’re checking then you’re really not getting the full picture of what’s out there. In fact, some firms—including heavyweights like Direct Line—actually pride themselves on the fact that they don’t appear on price comparison sites.

15 things you can do in the next half hour to save some cash

Keep checking back here for more money tips and updates. We’re experts at saving you cash and we’re always here to help. That’s the reason why you’re better off with RIFT.

Whatever kinds of investments you’re looking into, it’s going to pay to keep a few basic principles in mind. Firstly, don’t gamble with money you can’t afford to lose. Even “safe” investments can wind up losing you money in real terms if the returns are swallowed up by inflation. Remember the “50/30/20” rule of budgeting, where 50% of your income gets put toward essentials, 30% to non-essentials and the remaining 20% to savings and investments.

Lastly, know where to get good advice. Depending on your situation, that might mean talking to a specialist adviser, or using an index fund to manage your portfolio professionally. Don’t dive into decisions based on hunches or blind punts, and keep your expectations realistic. Keep checking back here for more money tips and updates. We’re experts at saving you cash and we’re always here to help. That’s the reason why you’re better off with RIFT.

  • Payslips
  • Bank statements
  • Credit card bills
  • Household bills
  • (And) Savings and pension contributions

Family-run businesses, as you might expect, are some of the most common types of smaller company. If you're looking to partner up with people you know and trust, where better to start the search than your own home, right? In fact, as of the statistics for 2020, over 3 in 4 small and medium-sized enterprises (SMEs) were family-owned. The larger the business, the lower that number goes, with 4 in 5 micro-businesses (firms with fewer than 10 employees) and 2 in 3 small businesses being owned by families. By the time you get to medium-sized companies, though, that figure's dropped to just under 6 in 10.

So, what kind of businesses are we talking about here? Well, it turns out there's quite a variety of them. About the most popular place to find family businesses is in the building trade. Coming a close second is the so-called "primary sector". This really just means firms that deal with basic raw materials like mining, but also includes farms and fishing operations. Next in line we have retail and wholesale businesses, followed by administration firms.

Going into business for yourself is something a lot of people in the UK dream of. Again, using surveys from 2020 as a guide, we see that a massive 64% of UK workers had thought seriously about setting up their own businesses. If you narrow it down to the younger crowd, the statistics are even more striking. An impressive 83% of 18-24 year-olds in 2020 were dreaming of going into self-employment. There are a lot of great things about being your own boss, from a real sense of independence and freedom to being able to fine-tune the way you work to suit your own life and goals. If this sounds like a dream worth chasing, the first thing to do is understand how to make and stick to a budget—so take a look at our other guide, "How to Budget if You Are Self-employed" for more.

How to budget if you're self-employed

Of course, going your own way doesn't have to mean going it alone, so a lot of these new small businesses get their start when families or friends decide to build something great together. With that in mind, let's talk about how to give your new business the best possible start.

Let's assume you already have a strong idea of who you want to go into business with. Now it's time to look into the main practicalities you'll need to tackle. Even small businesses have a lot of moving parts, which means a range of different responsibilities, job roles and levels of authority to divide up. Getting those decisions right from the very start will give you a big boost when it actually comes to running things day-to-day. The clearer it is who's supposed to be doing what, the smoother your new company's ride will be.

While we're on the subject of dividing things up between you and your partners, let's have a quick word about ownership. This is where business gets really serious—and again, you'll want this to be crystal clear to everyone it affects from day one. Business ownership isn't something you can settle with a basic nod-and-handshake arrangement. You'll need to draw up contracts, and make sure everyone's happy with what they say. While you're at it, you'll want to set a few goalposts for your business. Give some thought to what you're hoping to achieve, and what you're planning to get out of it. Keep your targets as realistic as possible, given your available resources and experience—but don't be afraid to dream a little bigger. There's nothing wrong with shooting for the moon as long as you understand that a step-ladder won't get you all the way there on its own.

This is where you'll really want to get talking with your partners. Make sure everyone's on the same page in terms of realistic expectations and achievable targets—or even your "exit strategy" if your circumstances change or things don't quite work out the way you wanted. You've got to be open and up-front with your business partners, even though it can be tough to keep your home and work lives completely separate when you share a dining table with your company’s MD. If the time ever comes for you to step back from your end of the business, leaving your "succession planning" too late can mean you don’t have time to get it done properly. That can seriously mess with your business and force you to make key decisions in a rush. Suppose the person you’ve picked out to take up the reins has other plans, for instance, or simply isn’t up to the job. Do you have a back-up plan? If so, how do they feel about being your second choice?

For another thing, people's personal situations can change unexpectedly. It needn’t even be as dramatic as a divorce or death in the family, either – although those can certainly happen. If you’re considering passing on your business to relatives once you step away from it, you’ve actually got more considerations than other kinds of company. On the one hand, it’s important to do what’s best for the business itself, passing control to the people with the most interest and aptitude for it. On the other, you’ve got to weigh up the more personal consequences of your choice. In some cases, you might even find yourself with no good moves to make at all – at which point it could be worth looking into other candidates outside the family, or even selling the business outright.

So, with a heaving pile of circumstances, obstacles and egos to contend with, how do you go about keeping order in your business? There's never going to be a one-size-fits-all solution for every situation or firm, but the strongest place to start is with a well made shareholders' agreement. Not only will this protect your business, your partners and you, it'll also cut down on a lot of the general awkwardness that can come when friends and families work together. It's like a business-themed take on the pre-nuptial agreement, spelling out what everyone's agreed to in advance to avoid uncertainty and unpleasantness later. If you and your firm's partners decide to break up somewhere down the line, everyone's clear on what the rules are. For example:

  • The rights and obligations of every partner are clearly listed out.
  • Any rules about selling company shares are explained and agreed.
  • The procedures for running the business and making key decisions are set out.
  • The rights and investments of minor shareholders are protected

With all the fiddly legalities neatly ironed out, you can move ahead with the exciting part—actually setting up your business. You're in good company, too. As of 2020, the UK boasted over 2 million limited companies (a business set-up that protects your personal cash and property if the sky falls in) actively trading, with about half of those being one-person operations.

When you need to kick off a business partnership, your main port of call will be the government's own website. That's where you'll be asked about the kind of set-up you're aiming for. One option is a limited partnership, which means you've got at least one general partner and one limited partner. With a limited liability partnership, on the other hand, there aren't any general partners. Confused yet? A general partner is someone who owns and controls a business, but also stand to lose some personal cash if the business goes bad. Limited partners tend to have fewer responsibilities and less overall authority, but their personal money's more protected. By the time you hit the set-up page on the government website, you and your partners need to have already agreed these key details so everyone knows exactly where they stand.

Keep checking back here for more money tips and updates. We’re experts at saving you cash and we’re always here to help. That’s the reason why you’re better off with RIFT.

Yes, it’s possible to invest in gold, even without the resources of a James Bond villain or a greedy dragon. Is it actually worth it, though? It turns out the answer depends very much on what you’re hoping to achieve - and how long you keep your money invested.

Over the really long term - and we’re talking about the last 30 years or so here – gold investments don’t really have any kind of edge over putting your cash into the stock market. In the shorter term of around 15 years, though, gold has outperformed stocks and shares investments pretty convincingly. Here are a few numbers to chew over:

  • From 1990 to 2020, the Dow Jones Industrial Average (DJIA) rose by 991%. Gold prices trailed way behind at only 360%.
  • Narrowing our focus down to the 15 years from 2005 to 2020, though, we see the DJIA only rising by 153%, while gold is still up by 330%.

The DJIA is considered to be a pretty decent snapshot of the entire US economy, making it one of the most well known stock market indexes. When times are tough and the markets are volatile, gold often becomes a much more attractive investment option. It just doesn’t “twitch” up and down in value with general market prices. 2020’s a good example of this. Gold prices flew up to record levels in July that year, while stock market values plummeted. The same thing happened in 2008 when the financial crisis happened. The down-side to that stability, though, is that when the markets are going strong, the price of gold can often level out while other investments shoot up.

Another thing to realise about gold is that it isn’t going to give you a regular income the way other types of investing can. The value of your gold investment is determined entirely by the price of gold itself. Assuming you’re buying actual gold rather than investing in gold-related businesses, you’re also going to be looking at storage and insurance costs. You can read more about this in our article, “An Intro to Gold Investing for Beginners”.

So, gold can be a decent back-up plan to keep your money’s value when other investments turn out to be less reliable. It’s more about ensuring you don’t lose cash than making you more of it, though.

Keep checking back here for more money tips and updates. We’re experts at saving you cash and we’re always here to help. That’s the reason why you’re better off with RIFT.

We’ve all grown up in a world that respects and values gold. It’s a respect that dates back many thousands of years, and shapes how the metal’s viewed today by investors, businesses and virtually everyone else. As far back as 4,000BC, gold was being used in Eastern European cultures to make decorative objects, and across millennia its primary use was in jewellery and objects of religious worship. Despite this, it really wasn’t until around 1,500BC that gold first became a kind of global “money”. Egypt, whose Nubia region was rich in gold, made it an official standard of value and the first international medium of exchange.

Skim forward a couple of centuries and we find a kingdom in Asia Minor called Lydia, where the first gold coins were minted. By 50BC, the Romans had started using a gold coin they called the Aureus (literally, “golden”). Eventually, gold coins started changing hands all over the world. The Republic of Florence, in what today would be Italy, had the Ducat, while Great Britain had its Florin. The Ducat, in fact, ended up being the world’s top gold currency for another 5 centuries!

So, why’s the world still so excited about gold? After all, it’s too soft and too scarce to build anything useful out of, isn’t it? Even the gold used in jewellery often needs to be blended with other metals to give it strength. In fact, some people reckon we really shouldn’t be using it as a measure of value at all anymore.

To be fair, gold goes have some interesting properties. It’s non-toxic and never rusts and that softness we talked about makes it easy to work with. It’s even great for electronics, since it conducts electricity so well. If you want to get into the deep science of it, it’s ideal for nanotechnology, resists bacteria and can even be used in the fight against cancer! In real terms, though, the simple truth is that gold is beautiful, ageless and really rare - and eventually enough people decided that these factors made it important and valuable.

When you’re comparing one kind of investment with another, everything depends on the time frame you’re considering. Over the last 15 years or so, gold’s been a pretty solid investment compared to stocks and shares. If you stretch that out to 30 years, though, things swing back in the other direction. In the last 3 decades, the price of gold has risen by about 360%. Compare that to the 991% rise in the Dow Jones Industrial Average over that time and it doesn’t look too great.

For reference, the Dow Jones Industrial Average tracks the stock prices of 30 big US firms. It’s among the most well known and respected stock market indices, making it the place to look for a snapshot of the American economy.
Looking back at our comparison, the picture changes quite a lot of we narrow down the time frame a bit. Looking just at the period from 2005 to 2020, gold has shot up 330% in value – not too different from the 30-year increase. Over that same 15 years, though, the DJIA only rose by 153%.

As for what this all means, it’s a question of stability. Gold typically doesn’t twitch up and down in value alongside general market prices. If you’re looking for a relatively safe investment, that’s a good thing to see. It’s one of the reasons why gold tends to go up in value when the economy’s on shaky ground. Investors know to look for stable places to put their money. 2020’s actually a good example of this. Gold prices flew up to record levels in July that year, while stock market values plummeted. The same thing happened in 2008 when the financial crisis happened. The down-side to all that stability, of course, is that gold investment tends not to take full advantage of economic growth periods. The price can often sit steady while other investments see sharp rises.

The other thing to understand about gold is that your investment probably won’t bring in an income on its own. There won’t be any dividend payments like you can get from shares, or interest like you’d bet with a bond. Instead, the return on your investment is going to hang entirely on how the price of gold shifts. If you’re buying actual, physical gold, you’re also going to have to pay to insure it and store it somewhere secure.

All told, gold is the kind of thing you invest in to keep your money safe, rather than to make massive returns on it. That’s why it’s often seen as an excellent “backup plan” in case your more volatile investments turn out disappointing.

As we’ve hinted at already, you’ve got a few options when it comes to investing in gold. First, and most obvious, is actual gold itself. That could mean bullion, coins, jewellery or anything else made from the stuff. You’re going to need quite a lot of cash to get started this way, and you’ll need to protect yourself from getting ripped off. That’ll mean using reputable dealers, brokers and banks, all of whom will be able to provide proof of authenticity. If you’re buying coins, keep in mind that it’s not just the raw weight of the gold that you’re buying. The dates, designs and condition of the coins matter too, and it might be worth talking to an expert to get good advice. A good dealer may even be able to store your gold for you, which can simplify things like insurance and protection. You’ll still need to pay for the service, though.

You can also get gold bullion through the Royal Mint, either taking the delivery yourself or having the Mint store it for you. Again, there’s a fee for using their storage system (known as the Vault), which will typically come to 1% of your gold’s value per year, plus VAT. Investing through the Royal Mint means you never have to worry about your gold’s authenticity, but it’s a pretty expensive way to do it.

Moving away from physical gold, you could look into Exchange-Traded Commodities (ETCs). These are a lot like the ETFs (Exchange-Traded Funds) we talk about in our article, “7 Investment Methods When You’re Just Starting Out”, only for commodities. They track the price of gold, with the calculations based either on stores held in a vault or, slightly riskier, on buying gold-related products. Your money’s generally kept in a Stocks & Shares ISA, and your ETC can be traded on investment platforms. It’s a cheaper system than buying physical gold, and comes with none of the associated storage costs and other hassles. You’ll still have to pay for the trading platform you use, though.

Lastly, you can put your investment cash into businesses that actually work in the gold industry, whether that means mining, refining or distributing it. This can actually work out more profitably than buying gold itself, since you’ll be investing in companies that will pay dividends on your shares. You’re sacrificing some of that famous gold stability, though, so the risks are higher. The value of your investment won’t just be based on the overall price of gold. There’ll also be the profitability of the business you’ve bought into to factor in, so you’ll need to be aware of things like the demand for the company’s products, the kinds of costs they’re running up and so on. That said, even a fairly small rise in the price of gold can lead to much higher returns on some gold stocks than if you just owned the gold itself.

So there you have it – a beginner’s guide to investing in gold without ever having to plunder a dragon horde or shake down a leprechaun. Keep checking back here for more money tips and updates. We’re experts at saving you cash and we’re always here to help. That’s the reason why you’re better off with RIFT.

National Savings and Investments Premium Bonds are basically a type of savings account. Like most other savings accounts, you can pay in and withdraw cash more or less whenever you want or need to (although it can take a little time to process a withdrawal – see below), with interest being paid on the amount you’ve saved. However, Premium Bonds pay out their interest in a very different way, through regular monthly prize draws. That’s right – you actually have to win your interest!

Here’s how it works. Every £1 Premium Bond has an equal chance of winning in any given draw. Naturally, that means the more Bonds you buy the better the chances of one of them being picked as a winner. To keep things interesting, NS&I has a machine it calls “Ernie” (standing for Electronic Random Number Indicator Equipment), which it uses to pick the winning Bonds. You can buy Premium Bonds with a minimum one-off purchase worth £25, or set up a monthly standing order to keep buying more to a maximum total of £50,000 of investment. You have to be over 16 to buy Premium Bonds, but it’s possible for someone else to buy them for people who are younger. In that case, the parent or guardian of the child will hold onto the Bonds until the child turns 16.

Once you’ve held a Premium Bond for at least a full month, you’re eligible to start winning the draws. So, for instance, if you buy yours in the middle of January they’ll be officially entered into the March draw. While we’re talking about timing, if you’re thinking of moving some cash out of your savings and into Premium Bonds then it’s best to consider when your interest is paid out. For instance, if you transfer the money in the final week of the month, you’ll minimise the amount of time it’ll be stuck no longer earning interest but not yet eligible to win a Premium Bond draw.

One exception to the month-long delay is if you reinvest any money your Premium Bonds win back into the scheme. Those winnings will be eligible to win another draw from the next month onward. So, if you won £25 in January and reinvested it, that £25 of Premium bonds would be entered into the February draw.

Premium Bonds stay entered in the monthly draws until you cash them in. Again, you can set the wheel in motion to withdraw your money at any time, but it can take as long as 8 days to actually get your hands on it.

Technically speaking, the interest you stand to win on your Premium Bonds is completely tax-free. That sounds great, of course, but in practice it won’t make any difference to most people. In 2016, a new Personal Savings Allowance (PSA) rule came in, meaning that basic-rate (20%) taxpayers can earn up to £1,000 per year in interest without paying any tax on it. People paying the higher rate (40%) have that allowance cut in half, while people on the top 45% rate get no allowance at all.

In real terms, what this means is that virtually everyone pays no tax on their savings interest, including any Premium Bond wins. As a result, there’s no real tax advantage to the scheme now. However, if you ever did end up winning enough to put your total interest over the £1,000 limit, your Premium Bonds interest wouldn’t count against your Personal Savings Allowance – making it almost an extra allowance in itself.

Of course, for that to matter you’d have to win something in the first place – so let’s look at the odds of that next.

Since any interest you get on Premium Bonds comes in the form of winnings, there’s no hard-and-fast interest rate you stand to earn. That said, there is an annual prize fund rate that loosely measures the kind of return you might expect overall. As of 2021/22, that rate stands at 1%. So in general, every £100 invested in Premium Bonds might be expected to pay out £1 in interest. It’s actually a bit more complicated than that, since the lowest prize level is £25, but it gives you a rough idea of the average returns you’re looking at.

Of course, the word “average” is doing a lot of work in that last sentence. We’re talking about a “mean” average here. In reality, for every person who wins £25 or more on a £100 investment, another 29 people get nothing at all. With a top prize of a massive £1 million, that means an awful lot of people getting absolutely no interest on their Bonds. In fact, assuming you have moderate luck with Ernie’s picks, even pumping the maximum of £50,000 into Premium Bonds would probably only score you about £450 over a year.

It’s not always easy to compare one kind of investment with another, and with Premium Bonds it’s possible to have massive wins – or nothing at all. However, if we stick to some reasonable assumptions about what you stand to win.

The numbers shake out like this:

  • With a 1% prize fund rate, £1,000 invested in Premium Bonds will earn no interest over a year, compared to the £6.02 of interest you’d get with an easy access savings account with a 0.6% interest rate.
  • With £5,000 invested, your Premium Bonds bring in £50 in winnings, while that same savings account would pay interest of £30.08.
  • £20,000 of Premium Bonds would set you up to win £175 over the year, with the same cash in your 0.6% interest savings account earning £120.30.
  • If you instead put your money into a fixed-term savings account at 0.8% interest, £1,000 would earn you £8.02, £5,000 would bring in £40.10 and £20,000 would get you £160.40 in interest.

Overall, then, assuming “average” luck with your winnings, Premium Bonds start to outperform basic savings accounts once you’ve got around £5,000 invested.

Basically, the more Premium Bonds you buy, the more likely they are to be worth it – at least compared to other kinds of savings accounts. If you’re putting away over £5,000, for example, they can work out better than normal easy-access savings. You’d need to have an impressive run of luck to match the top rates you can see with some fixed-term accounts, but you do have easier access to your money than a fixed account will allow. That makes Premium Bonds a reasonable investment if you’re looking to save for the longer term but still want the reassurance that you can get hold of your cash in a pinch.

Similarly, if you’re already earning enough interest to pay tax on it (over £1,000 for basic rate taxpayers), then Premium Bonds will probably work out better once you’ve got a large enough chunk of change invested in them. They can even be a better option than other tax-free savings accounts like cash ISAs when the interest rates on those are low.

Keep checking back here for more money tips and updates. We’re experts at saving you cash and we’re always here to help. That’s the reason why you’re better off with RIFT.

Let’s get into the real nuts and bolts of it. The first thing to do is add up everything you’re spending right now. Look through your banking apps and statements to get the full picture of what’s going out each month.

Once you’ve done that, start knocking off any of those regular costs that won’t be a factor after you’ve retired. Depending on your situation, that may mean work travel, childcare costs, your pension contributions and any other saving you’re doing. If you’re expecting to have paid off your mortgage by retirement, remember to subtract that too.

Next it’s time to look a little deeper at some of the costs that’ll still be sticking around once you’ve stopped working. A lot of those will probably come down, at least. With no kids in the house, for instance, your food and energy bills will probably be lower. The same applies to things like family holidays and general transport costs. Once you’ve factored all of those reduced bills into your calculations, you should have a reasonable stab at a monthly income you could live comfortably on.

If you really want to make your retirement savings count, there are even more ways to bring down your basic minimum retirement pot target. Again, a lot of these advantages and opportunities stem from the fact that you’ll no longer be making decisions around the demands and costs of your job. When you’re booking holidays, for instance, you won’t be stuck jetting off during peak seasons. With time on your side, off-peak holidays could be a serious money-saver.

If you’ve been running a car mostly for getting to and from work, you’ll already have noticed your costs going down. In fact, it might be time to think about whether you really even need your own wheels at all. A lot of families need more than one car while they’re working, so even scaling back the number of vehicles you own can mean a major boost to your budget.

If ditching your wheels seems like too big a step to take, think about dropping any Personal Contract Purchase or lease agreements in favour of simple buying a car outright. You’ll be saving a lot on interest payments in the long run.

The other big thing to look at is your home. If you’re no longer putting a roof over your kids’ heads, it could be a good opportunity to “downsize”. You might have a lot of money tied up in your house, so selling up and buying a smaller property can release a serious chunk of cash. In some cases, you might not even have to get somewhere smaller, assuming you’re happy to move to an area with lower property values. You can do this whether or not you’ve paid off your mortgage, of course, which could at least bring down your monthly payments. A smaller property will also generally be cheaper and easier to maintain.

So that’s a basic run-down of the hows and whys of saving for retirement. Keep checking back here for more money tips and updates. We’re experts at saving you cash and we’re always here to help. That’s the reason why you’re better off with RIFT.

By the 31st of January, you have to file your online tax return for the previous tax year, and pay any tax you owe.  Miss this by just one day and you're already looking at a £100 fine. You should get yourself registered as self-employed as soon as possible after you start trading. The deadline for getting yourself registered is the 5th of October in the year that you started your self-employment.  Miss that, and you're risking penalties based on the potential lost tax. 

Important Self Assessment deadlines include:

31st of January This is the big one, you have to file your online tax return for the previous tax year and pay any tax due.  You'll also have to make the first of any payments on account you need for the following year.
5th of April The end of the tax year.  Soon after this date, you'll be contacted by HMRC to file your Self Assessment tax return.
31st of July If you're making payments on account, this is when the second one's due.
31st of October If you're sending in a paper Self Assessment tax return, this is the deadline for it.

If you miss the deadline for a good reason, you may be able to steer clear of the penalties.  HMRC will expect you to be extremely up-front and co-operative, though. You can read more about penalties for failure to notify on the HMRC website. Keep in mind that you may also need to register separately for VAT. Again, check the HMRC website for details.

Technically, you can submit your Self Assessment tax return at any time after the end of the tax year, as long as it's filed by the 31st of January the following year. That said, it's always better to get it done sooner. For one thing, you'll know earlier how much you owe. That means you have time to plan or save up for making the payment.


Missing the tax return deadline lands you in an automatic £100 late-filing penalty. Those fines ratchet up further after 3, 6 and 12 months. A genuine reason might stop the penalty pain, but don't count on it.

There’s almost no acceptable excuse for missing Self Assessment tax return deadlines, even if you don't owe HMRC anything. If you do miss a deadline, interest is charged on both unpaid tax and unpaid penalties, so it's vital you don't get in a position of increasing fines just because it "slipped your mind" or you "didn't have time".

There are very few reasons that HMRC will accept as valid for late filing or payment. If you do need to file late then it is crucial that you let them know as soon as possible to show that you’re doing your best to fix things.

Penalties for missing the filing deadline of 31st Jan:

  • Automatic £100.
  • 3 months late: daily penalty of £10 per day up to 90 days.
  • 6 months late: 5% of tax due, or £300 if greater.
  • 12 months late: 5% or £300 if greater.

Things only get worse if the taxman suspects you're deliberately holding back information that would let him work out the tax due.

Penalties for late payment:

  • 30 days late: 5% of tax due.
  • 6 months late: 5% of tax outstanding at that date.
  • 12 months late: based on your behaviour.  If HMRC thinks you're deliberately hiding information, you're looking at 100% of the tax due, or £300 if greater. If they think you’ve missed the deadline deliberately without concealing information, then you can expect a penalty of 70% of the tax due, or £300 if greater. You might get a reduction in the penalty by being very up-front or volunteering information before being asked.

Tax returns aren't just for the self-employed.  There are lots of reasons why you might need to file one each year. You might have additional sources of income outside of your main job, for instance, or be the director of a company. Here are a few of the main examples:

When you’re filing a Self Assessment tax return, the information and documents you need will depend on your situation and business. Here are some of the basics:

  • Your personal details: name, address, UTR number, etc.
  • Details of your self-employment income and expenses: invoices, receipts, etc.
  • Your Capital Gains, if you disposed of any assets that count for the system.
  • Details of any other income you have, from things like rent, PAYE work and so on.
  • Any pension contributions or charity donations you’ve made.

The point is to give HMRC as complete a picture of your business and finances as you can, so you only end up paying the tax you owe. The Self Assessment system can be complicated, so talk to RIFT to make sure you’re making the most of it.

When you start working for yourself, registering for Self Assessment is Job One. You've got to do it as soon as possible, and you'll get fined if you wait too long. The deadline for registration is the 5th of October in your business' second tax year. Don't miss it!

The easiest way to register for Self Assessment is by doing it online.  Here's how:

  • Visit the HMRC website and create a Government Gateway account.
  • You will then receive your Unique Tax Payer Reference number (UTR).
  • You will also receive an activation code to log into your account for the first time.
  • You can then complete the registration form.

You can also send your registration form by post, but you've still got to go online to download the form anyway.

To register as self-employed and to get your UTR number, you'll need to have all the following information to hand:

  • Your name.
  • Your address.
  • Your National Insurance number.
  • Your date of birth.
  • A contact telephone number.
  • A contact email address.
  • The date you started as self-employed.
  • The type/nature of your business.
  • Your business address.
  • Your business telephone number.

If you’re a self-employed subcontractor in the building trade, you’ve also got to register for the Construction Industry Scheme (CIS). When you're paid through CIS, your contractor has to chisel off a hefty chunk of your pay before you get it. That money goes straight to HMRC. It's supposed to act as "advance payment" toward the tax and National Insurance you'll owe. Your contractor doesn't have any choice about this; it's just how the law works.

A UTR (Unique Taxpayer Reference) number or tax reference is a 10-digit code that's unique to either you or your company. Your UTR number identifies you personally with HMRC for things related to tax.

There are a number of ways of finding your UTR if you already have one. It’s 10 digits in length and is quoted on previous tax returns and other documents from HMRC, including:

  • Your "Welcome to Self Assessment" letter (SA250).
  • Your Self Assessment tax return.
  • Notice to file a tax return.
  • Statement of account.
  • Payment reminders.

If you’ve already registered for the online services area of the HMRC website you can log in and find your UTR number there.

When you're ready to start filing Self Assessment tax returns, you'll be applying for a UTR as part of your registration. It might take a while to get your UTR number from the taxman. Make sure you leave enough time to get it before you have to file your first return. A couple of months should be enough to be sure of it.

You’ll need to pass a series of security checks to allow HMRC to confirm your identity. Once this has been done they’ll post your UTR number to you, which can take up to 7 days. This is the only way HMRC will send your UTR number to you, so get a move on if it’s approaching the tax return deadline!

If you've lost your UTR number, or the above correspondence, your best option is to contact HMRC directly.  UTR numbers are unique, so make sure you keep yours safe.  A UTR could be used for identity theft if it falls into the wrong hands.

Companies have UTRs as well as individuals. The company Unique Taxpayer Reference (UTR) will have been issued by HMRC when the company was set up and registered. It can be found on documents HMRC have issued, such as the "Notice to deliver a company tax return" (form CT603).

Your company’s UTR will be included in the first letter you receive from HMRC at your registered office. It will be printed next to a heading like “UTR”, “Tax reference”, “Official Use” or “Reference”. HMRC will use the UTR to identify your company whenever you contact them about tax.

Your company’s CRN (company registration number) is not the same as your company Unique Taxpayer Reference (UTR). Your company number is officially known as a Company Registration Number (CRN). It’s issued by Companies House immediately upon incorporation, is unique to your company and is displayed on your certificate of incorporation. You must provide this number whenever you contact Companies House.

More on UTR numbers

Under the Construction Industry Scheme, you're essentially being taxed right from the first penny you earn, without getting your tax-free Personal Allowance. It's supposed to crack down on tax evasion in the construction industry, but in reality it's the honest subcontractors that are carrying the load.

The news isn't all bad, though. You can claim back the extra tax you've paid in your Self Assessment tax return. That's right: even though you've already had 20% of your money taken by HMRC, you still have to file a return. If you've paid too much tax, you can get a tax refund.

If you’re working via the Construction Industry Scheme (CIS), you’ll be required to file a Self Assessment tax return after your first year of trading and in subsequent years. You’ll complete your tax return at the end of the tax year in April and pay any taxes that are due by the following January.

Yes, you will pay tax “at source” (your tax is taken off your wages before you get them), most likely at the rate of 20% of your income. However, this doesn’t mean you are “employed”. You still count self-employed under CIS – even if it doesn’t feel like it. The big difference is that this means you'll still have to do Self Assessment each year. Not filing those tax returns each year brings three very serious problems your way:

  • You're not getting your tax-free Personal Allowance.
  • You're not getting any of the tax relief you're entitled to for your work expenses.
  • HMRC's going to come after you for failure to file!

When you’re a subcontractor running a Limited Company of your own, the deductions your contractors make can be used to bring down the Corporation Tax you owe. Alternatively, you might just be able to get it refunded by the taxman.
When you’re a contractor with subbies to pay, you have to send a regular report to HMRC about all the CIS deductions you’ve taken from their earnings. You do this on a monthly schedule. It makes no difference if your subcontractors are individual people or companies themselves. It’s just another way of taking tax out of their pay, the same as you would via PAYE.

If your company’s doing work for a contractor, and you aren’t using subbies, the contractor will handle your CIS deductions. If you’re registered for CIS, you’ll lose 20% of your pay to the taxman. If not, it’ll be 30%. You might be able to apply for gross payment status, where no CIS deductions are made. Things can get sticky there, though, so you need to know what you’re doing.

You’ll report the amount taken out via CIS in your Employment Payment Summaries to HMRC. At the end of the tax year, there’ll be an online form to fill in on the government website. HMRC uses those figures to work out how much to knock your Corporation Tax bill down by. If you end up in credit, you’ll get a tax refund.

If your company’s using subcontractors, but is doing work for another contractor, then your situation’s a little more complex. Your contractor will still make CIS deductions before paying you, as normal. You’ll then take CIS payments out of your subbies’ pay. The amount you end up sending to HMRC depends on which is higher – the amount the contractor took from your pay or what you’ve taken from your subcontractors’. If you end up losing more in your own CIS payments than you’re taking from your subbies’ cash, then your Corporation Tax bill comes down to settle up. If it’s the other way around, you’ll end up owing HMRC money.

More on CIS Tax Returns

Payments toward student loans are handled through your normal Self Assessment paperwork. Anything you owe will be included with your main tax bill. Watch out if you're paying late; the fines will be the same as if you'd missed the tax deadline.

If you're making payments on account (advance payments on your tax bill), your student loan payments won't be part of them. Remember that you can make voluntary payments directly to the Student Loan Company if you want to. Those won't be included on your tax return, though, and won't reduce your actual tax bill.

Read our guide on student tax

Once you've registered for Self Assessment online, you can:

  • Check your account details at any time to see what tax you owe.
  • Make instant amendments to your return online.
  • Adjust your payments on account if your income changes from one year to the next.
  • Easily save an electronic copy of your return, or print a copy for your records.

HMRC's Making Tax Digital scheme is aiming to make tax simpler for individuals and businesses in the UK.  Part of that process is the new Personal Tax Account System.

Your Personal Tax Account gives you better access to and control over your personal information.  You'll also be able to check your tax code and state Pension and do things like track the tax forms you've submitted.

Filing a Self Assessment tax return means showing HMRC a full picture of your finances.  Here are a few of the most important documents you need to hold onto:

  • Form P45, if you stopped working for an employer during the tax year.
  • Form P60, showing what tax you've paid.
  • Form P11D, if you get any "benefits in kind" like a company car.
  • Records of any Taxed Award Schemes or redundancy payments.
  • Details of any rental income or expenses.
  • Any savings and investment statements you’ve got.
  • Full details of all your income and necessary expenses from self-employment, plus and paperwork you have to back them up.

Other things to keep track of include extra income such as untaxed tips, incentive payments or benefits like meal vouchers. Depending on the kind of work you do, you might need to record your expenses for things like:

  • Travel to temporary workplaces (MOD bases, oil rigs, construction sites and so on).
  • Specialist tools, equipment or clothing - including laundry costs if applicable.
  • Food and accommodation expenses, if they're specifically work-related.

Remember, it's not just the self-employed who file Self Assessment tax returns. If you're claiming a tax refund for expenses of over £2,500, you'll need to use the system too.

You can make your Self Assessment payments by:

  • Online or phone banking.
  • Clearing House Automated Payment System.
  • Debit card online (no personal credit cards).
  • Paying at your bank, building society or Post Office.
  • Sending a cheque.
  • BACS or Direct Debit.

 

If you can’t afford to pay the tax you owe – don’t panic! The main thing to do is to let HMRC know you’re going to have trouble paying up. Do this as soon as possible once you realise there’s a problem. In most cases, they’ll be able to help you sort out a payment plan that’ll ease the financial pressure. A “Time to Pay” arrangement, for example, can see HMRC working with you to set a personal payment schedule you can realistically handle.

A mistake in a Self Assessment tax return can be a problem, but the system makes it easy enough to fix things if you’re on your toes. Don’t wait for HMRC to spot the mistake and start asking questions before you act, though. The moment you realise there’s an error, get to work correcting it. You can make changes to your tax return within 12 months of the filing deadline (the 31st of January). After that you’ll need to write to HMRC to get any corrections made.

Payments on account are payments towards your next year's income tax. The amount you have to pay for each payment on account is half of your previous year's tax bill. So, if your previous year’s tax bill was £2,500 (you only have to make payments on account if your tax bill is over £1,000), then each payment on account would be £1,250.

This is HMRC's way of spreading out the money you'll owe in your next tax bill over the year. They can be quite a shock the first time you're asked to pay them. However, they're really just designed to make paying your tax a little less painful.
When you file your Self Assessment tax return and your tax is calculated, HMRC assumes you'll owe about the same next time.When you settle up your tax bill in time for the normal deadline (31st of January), you also have to make your first payment on account for the following year. The amount will be half of the previous year's tax bill. Six months later, by the 31st of July, you'll have to make your second payment on account. Again, this will be for half of the previous year's total tax bill.

If you paid a total of, say, £2,500 on account for the year, but you find that you're actually due to pay £2,700 when you come to do your tax return, you'd pay a “balancing payment” of £200 to HMRC by 31st January the following year. Your two payments on account for would each be half of £2,700 (the previous year's tax bill). On the other hand, if your payments on account mean you've paid too much tax, you’ll be due a tax refund.

Payments on account are for self-employed people, and apply to both your income tax and class 4 National Insurance contributions. If you need to make them, you'll see the amounts and deadlines when you sign into your HMRC Self Assessment website.

A tax code is a little string of letters and numbers that tells your employer how much cash to hack off your pay before forking it over to you. You can find it on a bunch of documents - and it’s worth keeping an eye on it, since it can and will change once in a while. Look out for your tax code on:

  • Your payslips, P60 or P45.
  • Your yearly PAYE Coding Notice from HMRC.
  • Your pension advice slip.

If you spot a change in your code and don’t understand it, getting some expert advice from a professional accountant is a great idea. A good accountant can explain exactly what it all means, and sort it out for you if the taxman’s got his wires crossed. If you change your name or decide to work for yourself, for instance, you’ll need your tax code fixed so you don’t end up on the wrong side of HMRC.

More on tax codes

The amount you’re coughing up to HMRC comes down to 2 basic things: how much you’re earning and what your Personal Allowance is. Your Personal Allowance is listed in your tax code. Whatever you earn up to that amount each year, the taxman can’t lay a finger on it.

After your Personal Allowance is used up, the next chunk of your pay is taxed at the Basic rate. Once you hit the upper limit of that, anything more you earn gets hit with the Higher rate. Really big earners can find the top end of their pay being taxed at the even higher Additional rate.

On top of your Income Tax, you’ll also find yourself coughing up National Insurance contributions (NICs). Again, your employer handles this before you get your pay. If you’re on PAYE, you’ll be paying Class 1 NICs, which go toward stuff like your State Pension and a bunch of benefits you might find yourself claiming from time to time. Gaps in your payment history can lead to trouble down the road, but you can sometimes make voluntary payments to catch up.

Again, because the taxman loves his little codes, the NICs you pay are worked out from your National Insurance category letter. You can generally find this on your payslips, but most people using PAYE will be in category A. Here’s what they all mean:

  • A: Most employees.
  • B: Married women who qualify for lower National Insurance.
  • C: Employees over the State Pension age.
  • J: Employees already paying their NICs in another job.
  • H: Apprentices under 25.
  • M Employees under 21.
  • Z: Employees under 21 who are paying NICs in another job.
  • X: Employees who don’t pay NICs at all.

Tax code allowances

Most people on PAYE never need to deal with the taxman directly to pay their normal tax. However, sometimes, HMRC’s going to want to stick its beak a little deeper into your business. Maybe you’ve got some extra cash coming in outside of your PAYE job, or maybe you’re trying to claw some money back through a tax rebate. When that happens, you might find yourself filing a Self Assessment tax return. Here are some examples of people who need to send returns:

  • Company directors or partners.
  • If you're self-employed as a sole trader and earn more than £1,000
  • People making over £100,000 a year.
  • People getting £10,000 a year from investments.
  • People making foreign or rental income.
  • Self-employed people.
  • People claiming tax refunds with over £2,500 in expenses.
  • Anyone else the taxman demands a return from.

That last point’s a big one. If you ever get a letter from HMRC demanding a tax return, don’t ignore it. Even if you’re sure it’s a mistake, it’d be an even bigger one to leave the taxman waiting.

When you leave a job you get a form called a P45. This pretty much just tells you what you’ve earned so far in the tax year, and how much of it HMRC got its mitts on. You’ll be able to double check stuff like your National Insurance number and tax code, too.

The main thing is knowing what to do next. If you don’t have another job to go to straight away, or if your new earnings are lower than before, you might be owed a slab of tax back. Basically, HMRC’s been taking tax from your pay on the assumption that you’ll keep making the same money for the whole tax year. If you stop work part-way through the year, you might well end up with a refund due.

There’s another important form called a P60. This one’s got the same kind of information in it, but it covers the entire tax year. If you don’t get one you need to kick up a fuss, since you might have a tougher time claiming back the tax you’re owed without it.

Getting to know your P45

The Marriage Allowance is a way of you and your spouse (or civil partner) shifting your Personal Allowances between you. Basically, if one of you isn’t getting the full benefit of their Personal Allowance, they can transfer £1,190 of it to the other. To pick an example, if your spouse is bringing in £10,000 a year with a personal Allowance of £11,850, they’re missing out on some of the benefit. In that case, they could shift £1,190 of their unused allowance over to you, meaning you don’t pay tax on over an extra grand of income. That’s worth £238 a year.

Read our guide on marriage allowance

We’re all used to the taxman taking a big bite out of whatever cash we’ve got coming in. When it comes to benefits, though, he’s a surprisingly fussy eater. Here are some of the payments he wants his share of:

  • State Pension and pensions paid by the Industrial Death Benefit scheme.
  • Jobseeker’s Allowance (JSA) and contribution-based Employment and Support Allowance (ESA).
  • Carer’s Allowance and Incapacity Benefit (from the 29th week).
  • Bereavement Allowance, Widowed Parent’s Allowance and Widow’s Pension.

While he’s stuffing his face on those, though, he’ll still manage to keep his hands off things like:

  • Housing Benefit and Income Support.
  • Working Tax Credit and income-related ESA.
  • Child Tax Credit and Child Benefit (depending on income).
  • Disability Living Allowance and Personal Independence Payment.
  • Severe Disablement Allowance and Industrial Injuries Benefit.
  • Guardian’s or Attendance Allowance.
  • Maternity Allowance
  • Pension Credit , War Widow’s Pension and lump-sum bereavement payments.
  • Winter Fuel Payments and Christmas Bonus.
  • Free TV licences for over-75s.
  • Universal Credit.

Unless you’re living overseas pretty much permanently, HMRC might still chase you for tax on what you’re earning. It’s all about whether or not you count as a “UK resident” for tax. A lot of that comes down to how much time you’re spending in the UK each year. If you’re here more than half the time, chances are you’re a UK resident.

If your overseas employer’s a UK company, you’ll probably still be paying National insurance, too. For foreign employers, you might find yourself coughing up the local equivalent instead. To check what taxes you have to pay, HMRC has a few tests:

  • The Automatic Overseas test, which looks at stuff like where you spent the last 3 tax years.
  • The Automatic UK test, dealing with questions like whether you've got a "home" in the UK and how long you spend there.
  • The Sufficient Ties test, which asks about family, accommodation and so on.

One smart thing to do before you leave is check if you're owed a tax refund from HMRC. If you're leaving part-way through a tax year, you may not have used up all of your tax-free Personal Allowance. If you're registered for Self Assessment tax returns, don't forget to file one as normal after the end of the tax year.

HMRC has a special form for people who are going to be away from the UK for a complete tax year. Visit their site for form P85 "Leaving the UK - getting your tax right" in good time before you leave.

If you’re earning abroad, there’s a tricky catch to watch out for. Depending on your situation, you could actually end up paying tax in 2 countries at once! The UK’s got some “double taxation” agreements around the world to make this less painful, so it's worth checking with to see what you're letting yourself in for.

If it turns out you’re not a UK resident for tax, you’ll normally be off the hook for your foreign income. You’ll still be paying UK tax on anything you’re earning here, though – along with things like UK bank account interest or rental income.

Tax for ex-pats

There’s a bunch of reasons why you might find the taxman picking your pocket. Maybe you’ve stopped working or left the country part-way through the tax year. Maybe you’ve been forking out for work travel or other essential expenses from your own pocket. If your circumstances have changed, like switching to a lower-paid job, then you might have paid too much tax over the year. You might even have been put on the wrong tax code. All of these things and more can mean you’re due a tax refund from HMRC.

The thing is, the taxman’s not always going to hand it over automatically. For one thing, he won’t necessarily know how much you’ve been spending on things like travel for work. When you don’t get an automatic refund of what you’re owed, you have to make a claim yourself. That means working out exactly what you’re due, and backing it up with records and evidence. It’s a tough job for most people, and it takes a real tax expert to get the most from the refund system. A tax refund specialist can help find out what you're owed and claim it back. Even if you’ve never claimed before, you could still get back what you’re owed for up to 4-years.

The key thing to know about HMRC’s calendar is that the taxman celebrates his personal New Year’s Day on the 6th of April. Yes, it’s weird and clumsy, but it's got something to do with Pope Gregory XIII and the 11 days that went missing in September 1752. No, that’s not a joke.

Anyway, here are some of the main dates HMRC keeps circled:

  • 5th of April: Last day of the tax year and the cut-off point if you’re claiming a refund for 4-years back.
  • 6th of April: Start of the tax year.
  • 31st of May: This is when you should get your P60 for the last tax year. P60 is a statement of all the tax you’ve paid.
  • 6th of July: This is when any P11d should be issued. P11d deals with any additional work expenses or benefits you get from your boss.

The wheels at HMRC can turn pretty slowly sometimes, but they usually get there in the end. From start to finish, you’re probably looking at about 8-10 weeks to pry your refund cash from the taxman’s tightly clenched fist. Even so, there are a few things you can do to get your claim rolling as fast as possible:

  • Make sure you’ve got the important information to hand before you start. That includes your pay from your current and/or previous job, any work expenses you’re claiming for and any other cash you’ve got coming in. Depending on your situation, you might also need things like details of your pension providers. If there’s anything else the taxman needs to back up your claim, he’ll let you know what to show him.
  • Try not to hit any of HMRC’s busiest periods. Like anyone else, the taxman can get flooded around the end of the year. A lot of people end up stranded on helpline queues close to the 31st of January deadline, for instance. If you run into a snag, it could be tough to get advice on short notice.
  • Think about making your claim through a tax refund specialist. The right advice and help can make a massive difference to how smoothly the process runs.

How much tax you can pry out of HMRC’s clutches depends on your situation. On average, though, a typical yearly refund claimed through a specialist like RIFT is worth around £750. If this is your first refund claim and you’re claiming for the full 4-years, that adds up to over £3000!

Self Assessment generally is how people report any cash coming in that isn’t taxed PAYE. Self-employed people use the system to sort out their Income Tax and National Insurance – but a lot of other people have to file returns, too. For instance:

  • People claiming PAYE tax refunds with over £2,500 in work expenses.
  • If you're self-employed as a 'sole trader' and earned more than £1,000
  • Company directors.
  • People earning over £100,000 a year.
  • People making £2,500 or more from things like rental income or investments.
  • People claiming Child Benefit, if they or their partner earns over £50,000.
  • Basically anyone who gets a demand for a tax return from HMRC. Never ignore these, even if you’re sure it’s a mistake.

If you’re thinking of becoming your own boss, you need to let HMRC know quickly so you don’t end up choking on tax bills and penalties. That means registering online for Self Assessment by the 5th of October. Depending on how you’re set up (Sole Trader / Limited Company, etc.), you might have some other paperwork to handle as well.

Once you’re registered and have a Unique Taxpayer Reference number (UTR), you can go online and fill in your yearly Self Assessment tax return on the HMRC site. There’s a hard deadline of the 31st of January for filing and paying up what you owe. If that date blows by and the taxman doesn’t hear from you, you’ll be looking at a minimum of a £100 fine. The longer you keep him waiting, the worse the penalties get.

When you’re running a business, a lot of the cash you’re spending on essential costs can be used to bring down the tax you owe. Unlike with PAYE, the taxman doesn’t have his sights set on every single penny you’ve got coming in. It’s your profits he’s interested in. Costs that are completely necessary to run your business count against the income you’re paying tax on. The more you’re spending on your business the less tax you owe.

To get Self Assessment right, you need to get comfy with keeping records. Every time you spend cash on your business, you need to keep some evidence of it. Treat your invoices and receipts as if they were money. When it comes to filing your tax return, that’s exactly what they’ll be.

As for what counts as an “allowable expense”, it all depends on what business you’re in. The basic rule is that if it’s completely necessary and only for business use, it probably counts.

When you’re dealing with Self Assessment, the clock’s always ticking. Here are the big dates and deadlines to watch out for:

  • 6th of April: Start of the tax year.
  • 31st of July: Deadline for paying your second payment on account.
  • 5th of October: Deadline for registering for Self Assessment.
  • 31st of October: Deadline for filing tax returns on paper.
  • 31st of January: Deadline for online tax returns and paying the tax you owe (including your first payment on account for the next tax year).

When you’re paying your tax via Self Assessment, HMRC doesn’t like waiting. In fact, the taxman hates hanging around so much that he makes you pay tax in advance on money you might not have even earned yet! Here’s how it works:

  • HMRC looks at the Self Assessment tax return you've just filed, then calculates the tax you owe.
  • Blindly assuming that nothing's going to change in your next return, he guesses that you'll owe the same next time.
  • He cuts that number in half, then charges you two payments on account of that amount over the following year - the first by January 31st (along with the "balancing payment" for the previous year's bill), then another by July 31st.

The good side to payments on account is that, when the January tax deadline rolls around, you’ll probably have already paid most of the tax you owe for the year. The bad side is that the amount you’ve paid is based on estimates. If your income drops from one year to the next, you’ll have paid too much tax and will need to claw some back. Find a specialist accountant or tax rebates expert to help you out.

Most people want to retire around the age of 65, or even sooner. The sad truth, though, is that it can be tough to stack up enough savings in your pension pot to hit that target. The earlier you retire, naturally enough, the less money you’ll have to live on – and the longer it’ll have to last. On the other hand, working for a few more years means you’ll be able to save more with less chance of the cash running dry before you do.

We know – it feels weird trying to guess how long you’re going to live, and it’s a more complicated question than it sounds. It’s one of the most important expectations to set when you’re planning your retirement, though. If we start looking at the basic averages for the UK, for instance, a typical 40-year-old Brit who retires at 65 is probably looking at a 17-year retirement period before they shuffle off. Good exercise habits and a healthy lifestyle could bump that up by as much as a decade, though. Those extra years are going to need to be paid for – which means they’re going to need to be saved for.

The next question to ask yourself is what your lifestyle expectations are once you hit retirement. Again, this is a pretty vague and complicated thing to wrestle with, so let’s break it down a bit. Fixing up your home, for instance, can chomp a big bite out of your savings pot. We’re not just talking about renovations, either. You might need to make a few changes as you get older to help you get around. You’ve also got your leisure needs to pay for, like holidays. If you’ve been waiting until retirement to see the world, for example, you’ll need a fair bit of cash set aside for travel. Even just expecting to run a car will drain regular money out of your pot, so it’s important to find a balance between the retirement you want to have and the cash you can realistically stash toward it.

The current version of the State Pension pays out £179.60 per week after you hit the age to collect it. That’s assuming you retired today, because the amounts do change over time. The other thing that changes is how old you need to be to get it. Currently, that age is 65, but it’s already on the rise. People born after the 5th of April 1960, for instance, will have to wait until they’re 66 to claim their State Pensions. People born after the 5th of March 1961, on the other hand, won’t qualify until they turn 67.

So, at £179.60 per week, you’re looking at a yearly income of £9,339 per year. That amount’s guaranteed for as long as you live, but in itself really won’t buy you much of a standard of living. In fact, it’s hard to imagine living on it at all. So, why have you been paying into it through your National Insurance contributions for all these decades, then? Well, that £9,339 can be a major head-start toward hitting your retirement saving goals. By adding guaranteed cash to your income from private pensions for life, it’s a pretty big boost to your overall income.

With your basic expectations in mind, it’s time to start making plans. It’s actually pretty easy to make the mistake of overestimating what you’ll need to live on once you’ve retired. Paradoxically, that can often leave people feeling like it’s not worth saving at all. The truth is, you really won’t need the equivalent of your working wage after you’ve stopped working. A lot of the day-to-day costs you’ve got used to over the years really won’t be a factor in retirement.

So, as a basic rule of thumb, you’ll probably find you’ll need anywhere between half and two thirds of your working income, based on the final salary you had before retiring. That’s after tax, of course. With that much coming in each year, you ought to be able to keep up the kind of lifestyle you’ve been used to.

Why? Well, for one thing you’re likely to have paid off your mortgage. That alone accounts for a major chunk of most people’s monthly income. If you’ve spent decades of your life paying to bring up kids, the chances are they’ll have left home by the time you retire as well. Then there are the costs involved in actually doing your job – the kinds of expenses you’ve hopefully been claiming tax refunds for all these years. Daily commuting expenses, for example, can be a pretty big drain on your wages, but in retirement those costs just evaporate.

One ballpark figure that a lot of advisers tend to toss around is the rule of 10. Basically, you should aim to have 10 times your average salary saved by the time you stop working. We’re talking about your salary averaged out over your working life here. So, for instance, if that average came to £30,000 you’d be looking at a savings target of £300,000 by your retirement age.

As for actually hitting that impressive target, it actually might not be as tough as it sounds. Again, taking an average yearly salary of £30,000, regularly saving just 12.5% of that could get you there over your working life. It works out as saving £312.50 per month into your pension scheme, assuming 4% growth. Over 40 years, you’ve hit that £300,000 target nicely.

If you’ve got a workplace pension then reaching your £300,000 goal gets even easier, since your employer will be making contributions too. Assuming they match your own contributions, you’d only need to pay in £125 per month to hit the magic £300,000 mark over 40 years. How does that work? Well, your employer’s contributions would double yours up to £250, then the 20% tax relief you get on the total amount effectively bumps it up to £312.50.

The PAYE system takes the tax you owe out of your earnings before you get them. However, a lot of the “hidden” day-to-day expenses of doing your job actually qualify you for tax relief. These “tax deductible” costs include certain types of work travel, professional subscriptions and even cleaning, repair or replacement of equipment or uniforms.

What you can claim depends on your personal circumstances. Here’s an example:

Suppose you’re a nurse, working through an agency. You’ve got a variety of jobs to do throughout a day’s work, and use your own car to get between them. Like most people, you can’t claim anything for the “normal commute” between your home and your first job of the day. However, all the other trips you make during that day’s work will be covered by the tax refund rules. On top of that, if you’re buying food while you’re out travelling for work, those costs can count toward your claim as well. It’s worth keeping track of them, too. It might not seem like a lot when you’re spending £5-£10 a day on food and drink to keep yourself going, but the costs add up over the year – and so does the tax refund you’re owed.

Beyond your simple daily expenses, you might have other, longer-term costs to claim for. If you’re paying subscriptions to professional bodies like the Royal College of Nursing, for instance, you might qualify for a tax refund on them. Even relatively mundane things like laundry bills for your uniform can count toward your refund, as long as you’re paying them yourself.

When your debts are getting out of control, it’s critical that you take full advantage of the help on offer. For basic, practical and effective guidance, you could do a lot worse than the Citizens Advice Bureau or National Debtline. Another option is Stepchange, a charity dedicated to helping people conquer their debt problems. They help 650,000 people a year, with specialised services for people with mental health issues and a free advocacy system.

For local help, you can find a list of nearby debt services at the Christians Against Poverty website. Just enter your post code to get started. There’s also a fantastic list of helplines and support groups for mental health issues on the NHS website, covering everything from stress and depression through to panic attacks and bipolar disorder. There’s even a specialist charity called The Lighthouse Club for the construction industry, where mental health is a serious issue. They have a dedicated helpline and even a construction worker mental health app.

Turning 18 holds great significance. It’s a time full of promise and marks your journey to becoming an adult. You can register to vote, buy your first pint and even get married without parental consent. It may also be a time that your child looks to begin their undergraduate degree.

You’ve probably heard of the tuition fees that can cost upwards of £9,000 a year. Thankfully, the cost of this is covered by the Student Loans Company and will only begin to be paid back once your child earns over a set amount.

Maintenance loans work in a similar way although these are often used to cover day-to-day living costs such as transport and food. The maintenance loan amount is calculated on your household income, as technically, the more you earn the more you can afford to support your child.

Unless living at home, accommodation will be an extra cost that may have to be covered by yours truly. Times Higher Education found the average cost of accommodation to be just under £5,000 a year. As undergraduate degrees usually last three years, that’s £15,000 in total. If based in locations with high rent such as London, you could have to fork out even more.

This would be a scary cost to most parents, so we’ll help you figure out how much you’d need roughly to save for your child before they enter the big wide world.

Read our guide on student tax

The best place to start is with a budget. After all, if you don’t know how much something costs on average, the chances are you’ll end up spending a lot more than necessary. Of course, one of the biggest factors in the cost of your holiday really is where you go. But once you’ve picked your destination, have a look online or in travel agencies to see how much travel and accommodation should cost. And if it’s any cheaper to bundle them together.

Then, think about how much you’ll spend each day you’re away, including tickets for any excursions, and add that to the price of accommodation and getting there. That should give you a pretty clear idea about what to budget for your trip.

However much you think the holiday should cost, put aside a bit more. While it’s tricky to anticipate things like car breakdowns and plumber callouts, these are the kind of expenses that could derail your holiday fund. If you expect the unexpected, you’ll be able to solve that short-term emergency and still get that relaxing break. 

Even if you haven't decided where you’re going, having any kind of saving plan in place puts you in a great position when you finally pick your destination.

If you’re unsure where to start, how about saving £3 a day? By putting aside just £3 each day, you’ll have £1,100 in a year’s time. That’s enough to get you to the other side of the world, and all for the price of a daily cup of coffee.

Our free 50/30/20 spreadsheet automatically divides up your income into three main categories:

  • Living expenses
  • Discretionary expenses
  • Savings

Free planner

If you’re anything like us, you’ll have multiple streaming services that you pay for, whether it’s for music, films, TV or books. Each of them are pretty good value for money, but altogether, if you’re paying for a few at a time, It can work out quite costly. If you’ve forgotten about one of the services you pay for, or you’ve simply stopped using it, just cancel it! Most run on a rolling monthly basis at £10 a month, so put that tenner straight into your holiday fund instead. £120 after a year could get you a seat on a return flight to Europe. There are ways to save as you spend, too. As of January 2022, 27% of British adults have opened an account with a digital-only bank. Soon, 93% of us will be banking online somehow, whether on apps or at our desktops. With your average bank account nowadays, the interest rates are pretty low, but apps have made it easier than ever to control our money and save towards a target. Banking apps like Monzo, Revolut and even NatWest all have a saving pot feature. You can set up a savings pot for that Summer holiday, and whenever you make routine purchases, it’ll round up to the nearest pound and put the spare change in your holiday fund. If it’s a big trip you’re planning for, you’ll need to save for it longer than you would for a weekend in Paris, for example. If you can wait a year for that holiday of a lifetime, why not put the money you save up into an ISA? ISA stands for individual savings accounts, and they’re tax free up to a certain amount. That means you don’t pay tax on the interest your savings gain. You’ll need to have your money in an ISA account for a year to earn the interest, and of course, some have better interest rates than others. Check out our video below to learn more about the different kinds of ISA that are available.

In most cases, wherever you go, the cost of getting there can vary massively and it pays to book early.  That same seat can treble in price by the time your holiday rolls around, so get things off to a flying start by booking as soon as possible.

Before you start booking, remember to clear your cookies, and deny any unnecessary cookie permissions on any sites you visit. Many online booking websites use a dynamic pricing system that tracks the price you’ve been given for flights and package deals. Then, the price increases when you search repeatedly.

If you think you’ll forget to deny those permissions on each website visit, use an alternative browser that opts out of cookies, like DuckDuckGo.

Another great way to save on the cost of getting there is with reward schemes.  For instance, Tesco Clubcard points can be exchanged for Virgin Atlantic points. These can be used to pay for flights to certain destinations. Think about that – your weekly food shop could pay for your airline seat!

If you’re not signed up to any reward schemes, don’t worry – there are still plenty of things you can do to make that ticket a bit cheaper.

Don’t just settle for the first price you see for a return flight. Price comparison sites like Skyscanner and Kayak not only compare the price of flights on the same day, but can also show you which day is the cheapest to fly in a certain month. So, if you’re flexible, keep in mind you can save a bundle by travelling on a certain day.

Once you’ve picked the days you’ll be away, take a look at the different times that are available. Night flights may be a pain, and you may have to go nocturnal for a couple of days, but they can be around 30% cheaper than afternoon flights. And much cheaper than flying out in the morning.

Finally, look out for the hidden charges before you book your seat. What does your ticket actually include? Many budget airlines offer very tempting flight prices, but once you get to the till, you find that some things are missing. Like your cabin bag, suitcase, and the chance to sit next to your partner or travel companion.

Paying for each of these things can take the total to more than you would’ve paid for other airlines that include them in their fares.

Whether you want to visit museums, go on a city tour, or any other excursion. These activities are nearly always cheaper when booked online and in advance than they are on the day at the box office.

Instead of getting stung by door prices when you get there, plan your days in advance and book your tickets before you arrive. Even if you only save a euro or two, that’s money you can put on your restaurant bill that evening. Make your cash go further!

Some of the banking apps that we mentioned previously, have a savings pot feature allow you to temporarily change your payment settings, so every time you pay by card, it comes straight out of the holiday pot instead of your normal account. That means that you’re only spending the money you’ve budgeted, and the money in your normal account stays untouched. 

If you are planning on using a card instead of cash while you’re away, make sure you know about any fees you might incur before you go. Some banks will limit the amount of money you can withdraw without charge when you’re abroad, while some charge a fee for every transaction you make.

Look out for cards that don’t charge any fees for transactions, and also cards that go by the MasterCard or Visa exchange rate. Visa tend to offer a better exchange rate than MasterCard, but both are usually better than you’ll find at a bureau de change on the day.

That being said, if you’re planning to take local currency with you in cash, keep an eye out for the exchange rate before you go. You can find the best deal for exchanging currency on price comparison websites, so take a look before you get your money sorted!

Home equity loans and home equity lines of credit (HELOCs) are another kind of general agreement where you don’t need to use the cash for any pre-arranged purpose. The twist with these ‘second mortgage’ types of deal is that they let you borrow up to a given percentage of your ‘equity’ in your own home (meaning how much of its cost you’ve paid off).

A basic home equity loan comes as a lump sum, which you pay back like a normal instalment loan. The terms will probably stretch out over 5 to 30 years, depending on what you’re borrowing. With a HELOC agreement, on the other hand, you’re signing up to more of a revolving credit arrangement. You can draw cash out up to a set limit as you need it, and only pay interest on what you’ve actually taken out. 20 years is standard for a HELOC plan. While a home equity loan will have a predetermined interest rate, HELOCs generally have variable ones.

Coming in a tenner cheaper than the newer 4th Gen model, this easy-to-use device has a built-in speaker to handle all your audio demands. It’s hooked up with the Alexa AI system, meaning you can ask it questions and get an instant reply. It’ll keep you up to date with the latest news and weather reports, and connect to your other smart home gadgets to control your lights, thermostats and even door locks. A very cool, low-cost system, ideal for beginners.

Compatible with over 5,000 smart home devices through the popular SmartThings system, this hub has a lot to offer. It’s pretty much ideal if you’re after the full “smart home experience”. From heating and lighting to security and entertainment, the Aetoc hub lets you create routines and custom automations to suit your own needs.

This is the main Apple rival to the humble Amazon Echo Dot. Instead of Alexa, it uses the Siri AI assistant system. Again, you can get it to answer questions, search the internet for information and control your smart gadgets with your voice. If you’re already a big Apple device owner, it’s a very nice addition to your home set-up. You can even hook it up to other Homepods to work as an in-home messaging system. It can recognise up to 6 people’s voices so no one’s left out of the loop.

Fitting good quality insulation around your hot water tank isn’t just good for your household budget; it’s good for the Earth, too. A decent insulation jacket will bring down a typical household’s carbon emissions by a massive 110kg per year. At the same time, you’re reducing the heat loss from your tank, so your water stays hot longer. It’s a win/win situation for everyone.

It’s not always easy to know how far to trust the advice you get in any walk of life. Luckily, with tax advisers you can check their credentials fairly easily. A good adviser will have properly regulated qualifications from a professional body to show you, so you’ll know their skills and knowledge are both up to standard and up to date. A fully accredited tax adviser has to have Professional Indemnity Insurance, too.

Here’s a quick list of professional bodies who can point you in the right direction when you’re looking for a tax adviser:

  • The Institute of Chartered Accountants in England and Wales (ICAEW).
  • The Institute of Chartered Accountants of Scotland (ICAS).
  • The Chartered Accountants Ireland (CAI).
  • The Association of Chartered Certified Accountants (ACCA).
  • The Chartered Institute of Taxation (CIOT).
  • The Association of Accounting Technicians (AAT).
  • The Association of Taxation Technicians (ATT).

UK tax relief works by putting cash back in your pocket when you’re paying for certain essential work expenses. Each year, you can claim an HMRC tax rebate for costs like your business mileage, professional subscriptions and replacing or repairing vital tools and equipment.

The amount of tax you can claim back in an HMRC tax rebate depends on a couple of things. Firstly, the more you’re spending on the essential costs of your job, the more tax you’re owed back. Secondly, the higher the tax band you’re in, the more tax gets refunded. Knowing exactly which costs count as eligible expenses is the key to getting back everything you’re due.

Check out our tax refund claim checklist for more information on HMRC tax rebates, and to see how RIFT gets that money back in your pocket.

Tax Refund claim checklist

Whether you work part-time around your studies or do some temping or casual work in the holidays, when there’s money coming in Her Majesty’s Revenue and Customs (HMRC) wants to know about it. If you’re working for an employer, then you’ll usually have tax taken off your pay through the Pay As You Earn (PAYE) system. Under PAYE, HMRC basically swipes a slice of your cash directly from your employer before you get it. It’s a pretty simple system when it works properly, but there are a few wrinkles that can see you paying more than you should.

When you’re your own boss, things are a little different. HMRC won’t necessarily chase you for every penny you make selling things online or whatever. If you’re making over £1,000 a year, though, the taxman will probably decide you’re running a business. That means you’ll have to register yourself as self-employed and start filing Self Assessment tax returns every year. Basically, HMRC will want to hear about all the money you’ve got coming in and going out of your business. You’ll only be taxed on your profits, so the cash you splash just to stay afloat can often bring down your total tax bill. Self Assessment comes with a set of deadlines to hit and rules to obey. The penalties for getting it wrong can be pretty nasty, too, so always go in with your eyes open.

There are other kinds of tax as well, like the Value Added Tax that gets lumped onto most of the things you buy or Council Tax you pay on the value of your property. For most students, though, it’s Income Tax that trips them up, so it’s really worth getting comfortable with the system early.

What about national insurance?

National Insurance isn’t exactly a tax, but it’s still pretty much collected like one. It’s used by the government to cover the costs of things like state benefits and pensions. If you don’t keep your payments up, for instance, then you might find yourself out of luck (and pocket) when you hit State Pension age. Employed people pay Class 1 NICs, again collected by their employers. Self-employed people pay Class 2 (flat weekly rate) and Class 4 (based on profits) NICs.

Beyond England

Another quick thing to keep in mind is that tax systems aren’t necessarily always going to be the same through the whole UK. Scotland, for example, has had its own Income Tax scheme since 2017. The rates and thresholds it sets are different from England’s. Wales can also partially set its own rates, by essentially lowering the amount of tax the UK government collects, but adding in a Wales-only tax rate on top. In practice, so far, it makes no difference to the total tax paid, but that could change in the future.

Just like house prices, mortgage deposits can vary greatly. Generally, you can borrow up to 95% of a home’s market value - meaning you’d only need to make up the other 5% with your deposit. One thing to keep in mind is that, because you’re borrowing a larger amount of money, your repayments could cost a lot more than if you were to pay a bigger deposit.

Quite often, the best mortgage rates only become available if you pay a minimum deposit of 20%. Over time, this could work out cheaper as you’d pay less interest over the duration of your mortgage. Some banks may also have hidden clauses that require you to put a minimum deposit down. Some examples are if you’re a first-time buyer or your home isn’t a new build - so it’s definitely worth doing your research before applying.

With all this in mind, it's finally time to look at the fun stuff - properties. Property values around the UK also vary in value depending on where you’re looking to buy. According to the Office of National Statistics, the average house price in London comes in at just under half a million pounds. While if you were to look in the North East, you’d be looking at around £145,000.

This is a big question, and it’ll shape basically every decision you make when you’re buying your home. Generally speaking, you can expect a bank to set a cap of 4.5 times your yearly salary. If you’re combining 2 people’s incomes for your calculations, you might find they set it at 3.5 times that combined figure.

So, for a mortgage based on a single salary, you're probably looking at a maximum of:

  • Single salary of £20,000 per year: £90,000 mortgage
  • Single salary of £30,000 per year: £135,000 mortgage

If you're a couple using both incomes for the deal, those maximum figures would be:

  • Combined income of £20,000 per year: £70,000 mortgage
  • Combine income of £30,000 per year: £105,000 mortgage

There are some specific laws about redundancy notice, meaning the length of time between them telling you about it and your last day of work for the business. The exact minimum notice period spends on how long you’ve worked there. Here’s how it breaks down:

  • Between a month and 2 years: One week’s notice.
  • Between 2 and 12 years: a week’s notice per year you’ve worked there.

There’s a cap of 12 week’s notice, meaning they don’t need to give you more time if you’ve worked there over 12 years. However, your contract may say you’re entitled to more, so make sure you check that thoroughly.

Another thing to check your contract for is any mention of ‘alternative’ notice periods. In some cases, for instance, your employer might offer you pay ‘in lieu’ of notice. That is, you could be offered a lump sum of cash instead of working out your notice. Keep in mind that this isn’t a complete windfall, though. It still counts as taxable income as normal.

Another term you might hear floating around is ‘gardening leave’. Basically, this just means you’ll continue to get your normal pay throughout your notice period, but you won’t actually have to do any work for it. Technically speaking, you’ll still be an employee during this time, though – and you could actually be called back in to work if your employer needs you unexpectedly.

If you’ve been in the same job for a minimum of 2 years, you qualify for redundancy pay. You’ll have to apply for it inside 6 months from when your redundancy started, though. There are several factors that play into how much you’ll get, from your age and salary to the length of your time with the company, so let’s talk about those next.

The first thing to know is that there’s an upper limit to how much your employer needs to pay you. When they work out how long you’ve been in the job, for instance, there’s a 20-year cap on the calculations, and only complete years count toward it:

  • If you were made redundant before the 6th of April 2022, then your weekly redundancy pay’s capped at £544 per week, with a maximum statutory pay of £16,320.
  • If your redundancy came after the date above, your weekly pay cap is £571, with maximum statutory pay of £17,130.

Again, though, you should always check what your contract says about this. It might turn out that you’re entitled to more.

Next, your age comes into play. For each week of redundancy pay you’re due (remember each week equates to a year of working in the same job), you can get:

  • Half a week’s pay if you were under 22 years old.
  • A full week’s pay if you were between 22 and 40.
  • A week and a half’s pay if you were at least 41.

Keep in mind that the redundancy pay you’re entitled to for a given year of work depends on the age you were at the time, not the age you were at redundancy. This means that different years of work could entitle you to different amounts of redundancy pay.

With 50% of young people now going to university, a flip of a coin would give you the same chance of your child wishing to go into higher education. To give some perspective on how much that £5,000 a year would’ve cost when you were younger, we’ve roughly worked it out by decade.

  • In 1970, £303 would be the equivalent of £5,000 today
  • In 1980, it would be just under £1,100
  • In 1990, this would rise to just over £2,000

Depending on when you turned 18, it may be worth asking yourself if you would’ve had these amounts saved.

Even without university fees, just supporting a child until they reach 18 can cost a significant amount. A study by Child Poverty Action Group found the cost of raising a child to the age of 18 to be over £160,000 for a couple and £193,000 for a lone parent. That works out to be £9,000 a year for couples and £10,750 for a lone parent.

With the right information, you can help manage your money and plan for the future. If just starting out, we’d suggest watching our How to Save Money in the Bank video that goes into more details on how to save for short, mid and long term life goals.

It’s really important that we stress that this is a summary of the common scenarios that parents may face and not a definitive list. Often these amounts can differ depending on your personal circumstances. And remember, these are just a few of the options available to you. If you’re ever in doubt, speak to a financial advisor.

  • You’ll need a deposit for the new place, which you’ll be able to get back if you stick to the rules of your agreement.
  • Council tax: read our guide, “Council Tax Debt Help: Where Do I Start” for tips on making sure you’re not being overcharged.
  • Service charges, if you’re buying a flat or studio apartment.
  • Weekly food and other shopping costs.

Stamp Duty’s a cost that’s all too easy to overlook when you’re sorting out your finances to buy property. Your mortgage lender, for instance, won’t step in to offer extra cash to cover it. This means you’ll have to make your own arrangements, setting aside what you’ll need in advance. While you’re at it, think about the other “hidden” costs of buying a home. Solicitor’s fees, removal bills and so on all need to be taken care of and budgeted for.

Working out beforehand what you’ll end up paying is absolutely essential here, to avoid some very nasty surprises down the line. You should also put some thought into what you could do to bring some of those costs down. As we’ve already discussed, buying a house that’s worth less than £300,000 as a first-timer means you won’t get lumbered with any Stamp Duty. Beyond that, you could potentially reduce your up-front deposit to help cover your SDLT charge – although you’d probably find it harder to get a good rate from a lender that way. A better approach in general would be to think of Stamp Duty as if it were an extra lump to pay alongside your deposit so you can work it into your budgeting from the start.

As for the budgeting itself, there are some basic strategies that can pay off pretty reliably. In fact, you should probably be using some of them anyway, just to keep control over your everyday finances. Bringing down any rent you’re paying can be a big help - perhaps by moving to a cheaper place while you save up a deposit, for instance.

As for basic money management, we’ve talked about the 50/30/20 rule and zero-based budgeting in a few of our other articles, and they’re definitely worth putting into action when you’re planning to buy property. You could also check out our guide, “Easy Ways to Save for a House on a Low Income”, which covers several other options you might want to consider.

Keep checking back here for more money tips and updates. We’re experts at saving you cash and we’re always here to help. That’s the reason why you’re better off with RIFT.

As of 2021/22, the Stamp Duty Land Tax rates on residential properties are:

Up to £1250,000: 0%
The next £125,000 (the portion from £125,001 to £250,000): 2%
The next £675,000 (the portion from £250,001 to £925,000): 5%
The next £575,000 (the portion from £925,000 to £1.5 million): 10%
The remaining amount (the portion above £1.5 million): 12%

So, using an example from the government's own website, the SDLT you'd have to pay on a house worth £295,000 would look like this:

0% on the first £125,000= £0
2% on the next £125,000= £2,500
5% on the final £450,000= £2,250
Final total= £4,750

Those are the basic rules that most people need to remember when they’re buying a home. However, there’s some extra help built into the system for first-time buyers.

If you're covered by that rule, and you're buying a property worth £500,000 or less:

  • You won't have to pay SDLT at all on homes up to £300,000 or on the first £300,000 if it's worth more than that.
  • Even if the property's worth more, you'll only be charged 5% on the portion of the value from £300,001 to £500,000.

Basically, you just need to sit back and wait. Your old boss is legally required to shoot you a P45 after you’ve moved on. Obviously, you won’t have a P45 when you start your first job - but your new employer should sort you out there. When you’re starting PAYE work for the first time, they’ll give you a Starter Checklist to complete. You’ll need to get this done as early as possible so your boss can get your tax code squared away and you can be paid properly. You’ll also end up going through a Starter Checklist if you lose your original copy, because you can’t just get a replacement P45. The same goes if you haven’t had a PAYE job in more than a year, or if you start a second job without giving up your first.

Assuming this isn’t your first job, and your old boss doesn’t send you a P45, you need to start kicking up a fuss. That means nudging them directly to request your P45 – and doing it repeatedly if necessary until you get your form. They’re breaking the law if they don’t send it, so don’t be afraid to shout out.

Read our guide: Tax and Your First Job

Once you know what to expect from your mortgage offer, and what the property you’re buying will cost overall, you can start planning how to save up the rest. Having that specific target in mind will give you a good idea of how long it’ll take to save what you need.

If you’ve read any of our other articles on winning strategies for savers, then you’ve probably already heard us talk about zero-based budgeting and the 50/30/20 rule. You can get the full details by checking out 4 Fixed Income Saving Strategies – Combine to Win! But here are the basics in brief:

  • Zero-based (or zero-sum) budgets mean working out where every penny of your income’s coming from, and where every penny of it’s being spent, saved or invested.
  • The 50/30/20 rule is a way of dividing your income into needs, wants and savings. 50% goes on essentials, 30% can be blown on “fun stuff” and the remaining 20% is saved.

Another essential saving tip is to pay down your debts as soon as you can. In the long run, interest on money you owe will almost always stack up faster than on money you save. Over time, your debts get heavier, and can easily end up outweighing the benefits of saving.

With saving, little and often is usually a stronger strategy than occasionally dumping in larger amounts. See our 12 Everyday Money Saving Hacks article for some tips on how to develop good saving habits. It all mounts up with time.

You should also consider whether you could cut the costs of any rental deal you’re on. Rent can eat a huge chunk out of your monthly earnings, and can be very painful when you’re trying to save for a house. If you’re living on your own, for instance, you might try looking into a flat-share arrangement instead. If you don’t already know anyone you could team up with, there are flat-sharing websites that can help you out. A variation on this is co-living, where you share things like kitchens and shared spaces in a purpose-built property but still rent your own room.

The main thing is to keep your expectations realistic and be patient - and remember to celebrate your saving successes! When you’re on a lower income, any saving you do is a definite win. Keep checking back here for more money tips and updates. We’re experts at saving you cash and we’re always here to help. That’s the reason why you’re better off with RIFT.

Free budget planner

Otherwise known as Easy Access accounts, these accounts are great for stashing away money for the short term. As you can usually withdraw from these accounts at a moment's notice and without charge, they come in handy in unexpected circumstances. Broken boiler? Simply transfer the money over to avoid using your credit card. Now we know that building up a safety blanket isn’t easy for some. A 2020 survey by Shelter and YouGov showed that nearly 40% of UK households are a single paycheque away from homelessness. Try your best to put away whatever you can into Instant Access savings. This way you can reduce the impact of unexpected bills. If you ever find yourself dipping into these savings, you may want to build your funds back up to the previous amount to provide some much-needed security.

Although instant access savings are great for withdrawing money easily, they do come with some downfalls. If the rate of inflation is higher than the rate of interest, your money will lose some of its spending power the longer you leave it there. Let’s say you had £1,000 saved and inflation was higher than interest rates by 3%. If this was true for a year, your money would be worth £30 less. This is where mid-term saving methods come in handy.

Financial advisors often define mid-term goals as an upcoming expense that will take place between three to ten years from now. This could be a new car, a wedding, a dream holiday or even a first home deposit. If saving for your first home, a Lifetime ISA (or LISA) could be right for you. You can deposit up to a maximum of £4,000 a year with a government boost of 25%. If you deposit the maximum amount in a financial year, you’d end up with £5,000 in total. Even better - any returns that you make from interest are completely tax-free. However, if you were to withdraw for any other reason than buying your first home, retirement or terminal illness you would lose the government boost. If you already own a home or aren’t looking to buy just yet, bonds are often seen as a good option by financial advisors. We’ll go over two types: Fixed-Term Bonds and Government Bonds. Fixed-term bonds, otherwise known as a fixed-rate savings account, works by locking your money away for a set amount of time and paying you a set interest rate for that time. Depending on the bank, you can either choose how long you lock your money away for or they may choose set intervals. 

 

The perks of these accounts are that the interest rates are often higher than instant access savings and because the interest rate is fixed, you’ll know exactly how much you will earn. However, as the accounts are designed to be fixed-term, you may have to pay a penalty fee if you need to access your money before the agreed time. For this reason, it’s important to only put away money that you know you won’t need for that time. Government bonds, known as gilts in the UK differ slightly from fixed-term bonds. In the case of gilts, your money is loaned to the government in exchange for interest. Governments will often use these loans to finance projects such as infrastructure outside of the taxes they raise. Once your money is given to a government, you will be given a coupon that will pay you a set level of interest at regular intervals. Once the bond reaches its maturity date, your original sum of money known as the principal will be returned to you. For instance, if you invested £5,000 into a 5-year gilt with an annual interest rate of 5%, you’d receive £250 a year for 5 years before receiving your initial £5,000 back. Different bonds have different maturity dates so it’s important to pick an amount of time that you will not require the money back. Although all investments carry some element of risk, established economies are seen as low-risk when compared to other countries. In the case that you did need to get some money back, you can sell your bond on the open market but as with all investments, you can lose money as well as make it.

Long-term goals are anything that you wish to achieve over 10 years from now. The main examples are helping your kids out or retirement. Now, there’s a reason that we’ve not mentioned compound interest so far. This is because it often takes over 10 years to see any notable difference. Put simply, compound interest is when you earn interest on the money that you’ve saved AND on the interest that you’ve earned.  Imagine compound interest as a snowball rolling down a hill. As it collects more snow or interest in this case, the snowball will gradually grow in size. The longer you leave it to collect interest, the bigger your savings will grow. To calculate how long it will take to double your money you can use the Rule of 72. Simply divide 72 by the interest rate. If interest rates are 2% on average, it would take 36 years to double your savings if left untouched. However, in recent years the interest rates of banks have been significantly lower than this - meaning that it would take more than a lifetime to double your savings. 





Investing in the stock market is often suggested as an alternative for the mid-to-long term. Stock-market investments tend to do better than cash if left long enough to ride out any highs and lows of the market. Typically speaking, this is said to be a minimum of 5 years. Now that is not to say that stocks come without risk. There is a possibility that you could lose the entirety of your investment as well as make a large profit. There are certain types of investing that are said to reduce this element of risk. By spreading your money across a number of markets and industries, something known as diversification, you can reduce the likelihood of your entire investment losing its value. It’s really important that we stress the importance of never investing money that you simply cannot afford to lose. If you do choose to invest, make sure you do it responsibly. And remember, these are just a few of the options available to you. Certain methods of saving are suited for both personal and financial circumstances. So if ever in doubt, speak to a financial advisor.

 

Read our guide: Are financial advisors worth it?

Personal Allowance Up to £12,570 tax-free
Basic Rate Earnings from £12,571 to £50,270 taxed at 20%
Higher Rate Earnings from £50,271 to £150,000 taxed at 40%
Additional Rate Anything over £150,000 taxed at 45%

Tax codes can be tricky business. In an ideal world, your code will let HMRC know of any circumstances affecting the tax you owe, along with how much you can earn tax-free. However, tax codes change over time, and they might not always keep pace with your situation. If your code changes unexpectedly, you can either kick up a fuss with the taxman to find out why or have an expert look into it for you. What you really shouldn’t do, though, is ignore it and assume it’s someone else’s problem to fix. If HMRC agrees there’s a problem with your code for the current tax year, then any refund you’re owed will come through the PAYE system.

You might get a P800 letter from HMRC for the previous tax year, which will explain how to get any refund you’re owed. They’ll only send one of these out if they already know there’s a problem, though. If you think you should have been sent a P800 but don’t have one, it’s time to contact the taxman and sort it out.

If your tax problems go back further, you might still be in luck. You can actually claim tax refunds stretching back up to 4 tax years. You’ll need to be pretty sure of your footing, though, so talking to a professional might be a smart move.

Check your tax code

Here’s where things get a little more technical. When it comes to investments, there really is some truth to the old warning about putting all your eggs in one basket. That’s why the trick most advisers recommend is to “diversify” your investing so you’re not betting everything on one horse. The trouble is, unless you’re a stock market professional with some experience in the game, it’s tough to know where to put your money. If you’re new to investment – and even if you’re not – then an index fund might be a good option to look into.

Index funds are a kind of “mutual” investment you can use to manage your overall risk. Instead of dumping all your cash into a few hand-picked businesses, an index fund tracks a “market index”. It’s like a cross-section of how a particular market’s moving, instead of handcuffing your money to the fortunes of any one company. A “total stock market index fund”, for instance, is designed to track trends within the overall equity market. It’s like owning a bite of the entire market in a single investment, so if you’re looking to sock away a retirement portfolio, it’s a great way of diversifying your investments.

Index funds have several basic advantages to offer over going fully “hands-on” with your investment choices. For one thing, they can severely cut down the time you spend picking through your individual investments. The portfolio manager of your fund handles a lot of the essential research for you, investing in an index with the kind of stocks you want to put your money into.

At the same time, you’re diversifying your stocks to help protect your overall investment. Spreading your money around with an index fund means you’re less likely to take big losses if a couple of your investments go bad. Index funds can also be much cheaper than having your own fund manager hand-picking your stocks for you, along with being pretty tax-efficient. Since there’s less buying and selling going on than with an actively managed fund, you won’t be stacking up a load of extra capital gains onto your tax bill.

Let’s take a look at some of this in action. The Vanguard Growth ETF (exchange traded funds) list tracks the performance of a range of “growth stocks”. These are basically just stocks that are expected to do better than average in their fields, from technology to healthcare. According to Vanguard, this list is ideal if you’re new to the game, because of its lower minimum investment amounts and real-time pricing reports when you buy and sell. It’s a decent balance between having things managed for you and still having control of your transactions.

With the Standard and Poor’s 500 stock market index (S&P 500), you’re looking at 500 of the most profitable companies in the United States. We’re talking huge names like Apple, Amazon and Microsoft here – companies with long track records of flexing some serious money muscle. Annual returns from the S&P 500 index, as you’d imagine, have historically been strong – around 9% to 10% being fairly typical. Like any other investment, though, things can still go wrong even with world-leading businesses. For instance, in the chaos of the 2007 financial crisis and Great Recession, the S&P 500 dropped 57.7% between October 2007 and March 2009. Even so, it had completely recovered by March 2013. 2020’s COVID-19 pandemic dropped it by half again – but once more it bounced back by the end of the year to hit an all-time high in October 2021. In fact, in the entire history of the S&P 500, no 20-year investment has ever ended up in a loss. As we keep on saying, investment is a long-term game where the real rewards only come with time.

It takes the following basic information to process most healthcare tax rebate claims:

  • A list of all the places you've travelled for work
  • Receipts for your expenses if you have them
  • Your contract of employment
  • Copy of your photo ID
  • Proof of address
  • Wage slips
  • Other supporting documents like your MOT certificate, P60 or P45

You'll also need to set up a personal tax account. It's free and lets you keep tabs on all your key tax details. That includes all information from employers, banks and building societies and other government departments

When someone dies, there are rules to determine what happens to their money, possessions and property (their “estate”, in the taxman’s language). This can sometimes mean there’s tax to be paid along the way – called, appropriately enough, Inheritance Tax.

The standard rate for Inheritance Tax is a massive 40%, but you won’t end up paying it from the first penny you inherit. In fact, the tax doesn’t kick in at all unless the total value of the estate is at least £325,000 – and even then, it only applies to the portion of the estate that’s above that £325,000 threshold.
There are a few wrinkles in the system to be aware of, which can mean there’s no Inheritance Tax to pay. For one thing, if you’re leaving everything above the threshold to a spouse or civil partner, there’s no Inheritance Tax. The same thing goes if you’re leaving it to a charity or amateur sports club. In fact, the estate can even qualify for a reduced Inheritance Tax rate of 36% on some of its assets if at least 10% of its total net value is left to charity.

Also, if you’re leaving your home to your kids (including fostered or adopted children) or grandkids, then the threshold goes up to £500,000. That only counts if your estate’s worth under £2 million in total, though. For every £2 it’s worth over that limit, the tax-free allowance goes down by £1. For married people or couples in civil partnerships, the unused portion of that threshold can be combined with your partner’s when they die, potentially bumping it up as high as £1 million.

There’s another Inheritance Tax exemption for certain kinds of gifts that the owner of the estate gives out before they die. Yes, even presents you give while you’re alive can sometimes be counted for Inheritance Tax. For instance, if you give away more than £325,000 of your stuff and then die within 7 years, your beneficiaries will be looking at an Inheritance Tax bill. Depending on the situation, though, the actual rate might be less than the standard 40%. There’s also an annual “gift exemption” that lets you give away up to £3,000 a year tax-free while you’re alive.

Here’s the thing to watch out for, though. Even if the total value of an estate is under whatever threshold applies, you’re not off the hook altogether. Even if there’s no Inheritance Tax to pay, you still need to report the inheritance to HMRC.

Let’s put it in real terms. Let’s say the estate you’re inheriting’s worth exactly half a million pounds, with a standard tax-free threshold of £325,000. The top £175,000 of that brings a tax bill of 40% down on you.

So who’s actually paying all this tax then? Well, the money comes out of the estate itself, but the person actually doing the paperwork for it is called the “executor”. By the time the inheritance makes its way to the actual beneficiaries there won’t normally be anything left to pay on it, since the executor’s usually handled it already. There may still be some other taxes involved, though. For instance, if you inherit a property that’s being rented out, the rental income will still count as taxable income.

Instalment credit is another system where you make fixed, regular repayments against the amount you’ve borrowed. Your bank or finance company sets the terms and lays out the kind of interest you’ll be racking up on what you owe. You’ll probably find yourself facing penalty charges if you don’t keep up the agreed repayments, but unlike a revolving credit deal you’ll have a clear plan in front of you for paying up. In fact, many people use instalment credit agreement as a way of ‘consolidating’ other debts into a single, simple repayment plan.

Insulation’s a really important thing to get right if you’re serious about bringing down your heating bills. Up to 40% of your home’s total heat loss goes straight through the walls, with another 25% through the roof. By comparison, windows and doors account for about 20% - and even your floors lose you 10%.

Of course, insulation’s not cheap, but it does pay off over time. It all depends on your situation. Internal solid wall insulation, for instance, can run you about £7,400 in an average semi-detached house. At a saving of £225 a year, you’re looking at over 30 years before it pays for itself. That said, fitting up to 270mm of loft insulation in a typical semi could only cost you £300, while saving you £150 a year in lost heat and cutting down your annual carbon output by 600kg. Even just insulating under your floorboards could save around £40 per year.

The point of all this is to realise that your home could well be leaking money unnecessarily. Those leaks could be from dodgy insulation, wasteful energy use or even just sticking with the wrong supplier. Either way, you can take control of it and start bringing your heating bills down. It doesn’t have to involve massive home renovations, either. Even just a few changes in your habits can help.

Keep safe and warm this winter – and keep checking back here for more tips and updates. Remember – you’re always better off with RIFT.

We’re getting into territory where you’ll need more skills, time, and patience. You’ll also need your laptop for most of these intermediate level ideas:

  • Dropshipping

Dropshipping is a reasonably new way of selling products online. It’s when you take orders from customers - through your website, for example - and another company fulfils that order. You’re not making the products yourself, or having to put in stock orders and then hold that stock until somebody buys it.

For example, say you want to dropship car accessories - like seat covers. Rather than put an order in for 1,000 seat covers and then have to find 1,000 customers to buy them, you can dropship them. You list the seat covers on a website you’ve set up. You take the order, and send it to the manufacturer, who sends the seat cover to your customer. You charge the customer £10. The manufacturer charges you £5 for the product and £1 for delivery. You pocket £4!

It’s not quite as easy as it sounds. The manufacturer will supply that same seat cover to other dropshippers - so you’ll need to find a way to stand out. So think about what you want to sell - and who to. Then get on the search engines - you’ll find plenty of manufacturers who dropship, as well as tips to stand out in your niche.

  • Etsy

Etsy is aimed at crafty types - but you can sell all sorts. For example, you could pay a graphic designer to create a cool t-shirt design, then sell the t-shirts on Etsy for a profit. You don’t even need to invest in tonnes of stock. Once you have your design, you can use print-on-demand services. It’s a similar principle to dropshipping, but takes it one step further - the merchandise doesn’t physically exist until somebody orders it. So when somebody orders your t-shirt design, you send the order to the print house. They print it up and ship it to your customer, and you make a tidy profit. Keep your costs down by sticking to basic black or white t-shirts and you can easily make a £5 to £10 profit per t-shirt.

Selling on Etsy? Read this

  • Freelancing sites

Sites like Upwork can be great places to pick up small jobs if you have skills like graphic design, or can write, for example. But there are also loads of simple jobs advertised - like collating spreadsheets - that don’t require pro-level skills. 

  • Fiverr

Sites like Fiverr are a similar deal. You advertise your skills, people pay for them. It’s less professional than the likes of Upwork. While there are professionals selling their digital skills, there’s also quite a lot of…plain weird stuff up for grabs on Fiverr. Anything you could dream of asking somebody to do on camera, for example - there’s almost certainly somebody on Fiverr willing to do it for money. The point is, if there’s an odd digital skills niche you think you can fill, Fiverr could be the place for you. And while basic skills and products go for $5, hence the name, there’s no limit to what you can upsell people on. That’s how some users have apparently made six-figure sums through the platform.

Finding the best beginner investment fund can be a tricky business if you’re not a money expert. You’re setting out to make your cash work for you, and that’s generally a smart move. On the other hand, when you make an investment you’re taking a calculated risk with your money. You’ve got to go in with your eyes open, and you’ve got to learn to make good decisions. So let’s dig into this a bit.

The main thing you need to understand is that we’re not talking about dead-cert guarantees here. Any time you’re putting your money into stock or investment funds, the price can go down as well as up. You might feel like you’re dipping your toe in on a fairly safe bet, based on past performance. However, remember that last year’s experience doesn’t necessarily tell you much about next year’s prospects. A lot can happen in that time, and there are loads of unpredictable pressures that can push stock prices up or down.

Picking your first investment fund is about setting your financial “comfort zone”. We’ve already mentioned the level of risk you’re prepared to take. Beyond that, though, a big part of your decision is going to depend on how quickly you’re hoping to see some returns on your money. Smart investing really isn’t about getting rich fast and cashing out in a hurry. In fact, many advisers will warn you away from volatile investments that can rocket in a heartbeat, then plummet just as fast. Instead, the argument goes, the smart move is to look for a return over a longer term – say 5 years or more. It might not sound so exciting, but a longer-term investment will often help you ride out the kinds of short-term turbulence that can see you making a loss otherwise.

 

There’s a lot of good stuff to say about pensions. They’re great for minimising the tax you pay on your savings, and a simple, reliable system to build your retirement plans around. They also give you a lot of room to grow. You can get tax relief on up to £40,000 a year of contributions, or up 100% of your taxable earnings if that’s higher, with a tax-free lifetime limit of £1,073,100.

It’s already a great deal for most people, since it basically tops up your contributions by £20 for every £80 you pay in. If you pay higher rate tax, you can actually claim even more in a Self Assessment tax return. The very top earners making over £100,000 a year get an extra benefit on top, since they can use their pensions to stop themselves from getting a reduced tax-free Personal Allowance. If you’re making £100,000-£120,000 per year, you can find yourself paying out tax of up to 60%, so it’s important to make the most of opportunities like these. 

So overall, pensions sound great, right? Well, for the most part, yes. They do come with some drawbacks and limitations, though. The big one is that you really can’t get at your money throughout most of your life. You need to be at least 55 before you can make a withdrawal from you pension pot at all – and that age is set to go up to 57 by 2028. If you’re looking to cash in your investment a little sooner than that, you’re better off examining your other options before going all-in on a pension scheme.

How earning £100k affects your personal allowance

Individual Savings Accounts are another popular option that most people never really think of as “investments”. The idea of fixed rate ISAs is pretty simple. They’re tax-free savings accounts that lock your money away for a set period in exchange for a set interest rate. You know what you’re getting, and you know when you’re getting it, so they’re usually considered pretty safe.

With a Fixed Rate ISA, you’re probably going to score more interest than you’d be offered with an easy-access one where you can take your cash out more freely. They’re easy to manage, too. You open your ISA, with a set limit on how much you can dump into it, then earn monthly or yearly interest on it until the term ends and you get it back out. Generally, the longer you’re putting your savings away, the more you stand to get in interest. When rates are low all over, though, there’s probably not a huge difference.

Again, these sound like pretty safe, low-hassle investments, right? Again, the answer’s yes – with a few quick words of caution. Your interest rate’s locked in from the outset. That means if rates in general rise, you won’t see the benefit. You’re also at the mercy of inflation. When the rate of inflation’s high and the cost of living’s rising, even top-rate fixed ISAs will struggle to keep the value of your investment.

ISAs, then, can be great when interest rates are high and inflation’s low, but that’s not always the financial climate you’re looking at and it’s all too easy to see any growth getting swallowed up.

Now we’re getting into what most people think of when we talk about investing. Exchange Traded Funds are investments that track how a particular industry, commodity or other “index” is performing. It’s like holding a range of smaller investments in a basket with the risks and rewards spread out among them. ETFs are pretty easy to buy and sell whenever you want, just like normal stock. As a “marketable security”, an ETF has a given price attached to it and can be traded on a stock exchange.

ETF prices can obviously go up or down at any time, so the price you paid to buy in the morning could be different from the one you’d be charged in the afternoon. That’s one of the things that makes them different from other “mutual fund” baskets that can only be bought or sold at the end of the market’s day.

As well as keeping your overall risk level under control, ETFs make it cheaper to manage your investments. You’ll be paying less in commission to brokers than if you were buying each of your stocks one by one, for instance.

ETFs you can buy:

  • Bond ETFs can be a good way to get a steady income from your investment. Like any other ETF, what they pay out based on how well the individual investments are doing. In this case, those investments will be some combination of government, corporate and municipal bonds. However, while those kinds of bonds come with fixed end dates, an ETF made up of them doesn’t.
  • Industry ETFs are investments that track the overall performance of a specific sector. Instead of investing in any one company, you’re spreading your cash across a broader view the industry so all your eggs aren’t in the same basket.
  • Commodity ETFs are generally for people who want to invest in something pretty tangible, like wheat, oil or gold. Again, though, they’re about “diversifying your portfolio” of investments and protecting your money from a drop in the stock market. It’s a bit like owning a stash of the commodity itself, but without the related storage costs and other expenses.
  • Stock ETFs are a good way of investing in a particular industry without having to buy individual stocks. You’re getting most of the good side of investing in a basket of equities with less hassle and expense than normal stock mutual funds.

Like ETFs, index funds are a way of diversifying your investments so you don’t get badly stung by poor performance in any one area. The value of your investment is based on how a particular “market index” is doing. There are a few key differences between these and ETFs, though. The value of an index fund is only set at the end of the trading day, so they can only be bought or sold at that price. ETFs will often have a lower minimum “buy-in” – sometimes set even below the cost of a single share! Index funds, on the other hand, often expect you to lay down thousands of pounds to get involved.

ETFs also offer advantages in terms of tax when you sell them. When you decide to pull your cash out of an index fund, for instance, your fund manager has to sell securities to get your money. When you’re doing this to make a gain, the benefit gets passed along to everyone who’s invested in the same fund. This gets complicated, but the bottom line is that it can leave you owing Capital Gains Tax even though you haven’t actually sold any shares yourself. When you sell an ETF, on the other hand, you’re generally just swapping it for cash with another investor.

As for which is the better choice for you, there are a few things to weigh up. Obviously, comparing the “expense ratio” is a big part of that calculation, since the ongoing costs of keeping any investment is going to count against any growth you get from it. You’ve also got to think about commissions when you buy or sell – which will obviously matter more if you move your money around often and less if you don’t.

As with normal ISAs, the junior ones come in two basic varieties: cash or stocks & shares. The difference with a stocks & shares ISA is that the money is invested in the stock market. Instead of paying out a pre-determined rate of interest, these accounts grow in value according to how well those investments are doing. If your kid’s young enough that they won’t be able to access the money in their junior ISA for 5 years or more, stocks & shares ISAs can be a strong choice. That’s about the length of time you’d expect to get a stable, consistent return on the investment, riding out any shorter-term turbulence in the stock markets.

Why would you pick this admittedly riskier route for your child’s savings? Well, for one thing you’re banking on getting better returns than with an ISA that pays a flat rate of interest. While they’re less predictable than cash ISAs, stocks & shares ones are often able to perform better over time. So, if you’re worried about inflation eating away at the value of your child’s savings, stocks & shares ISAs might be worth looking into.

You don’t need to be an investment expert to use a stocks & shares junior ISA. You can pick a ready-made one that basically chooses and manages the investments for you. There may be some platform or management fees for this, depending on your situation and ISA, but it does take a lot of the effort and hassle out. Instead of deciding on every investment separately, you choose an ISA with a pre-set “basket” of them. Your decision will be based on the level of risk you’re prepared to accept.

If you’re willing to put the work in, though, you can go for a self-invested ISA instead. With these accounts, you pick and choose your own investments more directly. Financial advisers often talk about the importance of “diversifying your portfolio” – which is basically just a technical way of saying don’t put all your eggs in one basket. Spreading your investments out over a wider range of businesses and markets is usually safer than putting all your savings in one place.

Whichever option you decide on, always remember that no investment in stocks & shares will ever be 100% safe. The value of this type of ISA can drop as well as climb, even with investments that tend to be low-risk. Make sure you go in with both eyes open, and never take risks with money you can’t afford to lose.

To learn more about investing in stocks and shares, take a look at our other article, “Best Beginner Investment Funds for 2022” - and keep checking back here for more money tips and updates. We’re experts at saving you cash and we’re always here to help. That’s the reason why you’re better off with RIFT.

Just like adults, children can have savings accounts opened in their names. The main difference with a children’s instant access account, naturally enough, is that the account holder needs to be under 18 years old. Most banks and building societies will offer some kind of specialised savings account for kids, and the instant access types mean money can be paid in and withdrawn whenever needed. The interest rates might still be pretty low compared to some other savings or investment options, but they can still outperform savings accounts designed for adults. As with any account that pays interest, though, you’re basically at the mercy of the inflation rate. If inflation is high and interest rates are low, every pound in a savings account will be losing real-world value over time.

Opening a savings account for a child can be a great way to start teaching them about handling their money safely. They can also help get kids used to dealing with bank accounts in general. Depending on the account, your child might get a passbook to use for withdrawals (you’ll probably have to be there when they do it, though), and letting them get some hands-on experience of controlling their personal money is a great first step toward teaching them some financial responsibility.

With a regular saver account, you’re going to start seeing a few extra rules about how your child’s money is handled. For one thing, there are probably going to be limits on how much, or how little, can be paid in each month. The account might have to be topped up by between £10 and £100 per month, for instance. The point is to encourage the account holder to develop some regular saving habits, but those restrictions can come with some benefits attached. You’ll tend to find they pay out higher rates of interest, for example. That’s definitely a plus, but it’s worth keeping in mind that they might be a bit restrictive if you were planning to save more than the limits allow. Also, most accounts of this type only last for a set amount of time, often 12 months. During that time, you won’t be able to withdraw any of the cash you’re setting aside.

Junior ISAs are another savings option that a parent or guardian can set up for someone under 18 years old. There’s a limit set on how much money you can sock away in one of these each year, which comes to £9,000 as of 2020/21. Once the cash is in there, though, it’s going to stay there for a while. The child won’t have access to it at all until they turn 18, at which point the account loses the “junior” part of its name and becomes a normal ISA. The child can still take control of the account before this, though, potentially making some important decisions about it from the age of 16. They still won’t be able to take the money out until they’re 18, though.

Since these accounts have the same basic set-up and rules as any other ISA, all the interest paid out (or any investment growth in the case of stocks & shares ISAs) comes free of tax. Great as this is, it’s still worth remembering that a cash ISA paying interest might not keep up with the rate of inflation. That means the value of your child’s savings could still be dropping in real terms. Even so, this can still be a good option for saving toward your kids’ futures without burning through your own ISA pay-in allowance of £20,000. You can also use payments into a junior ISA to help bring down Inheritance Tax charges.

Obviously, there are more costs involved in moving out than just your new rent or mortgage payments. Before you fling yourself out into your new independent life, be sure to factor in the major monthly expenses you really can’t do without, like utility bills. Generally speaking, it’s a smart move to add about 30% on top of your basic rent just to cover those, but a lot depends on things like energy prices.

Extra costs that can trip people up:

  • You'll need a deposit for the new place, which is refunable if you stick to the rules of your agreement
  • Council tax read our guide, “Council Tax Debt Help: Where Do I Start” for tips on making sure you’re not being overcharged
  • Service charges, if you’re buying a flat or studio apartment
  • Weekly food and other shopping costs

If you’re paid for any of your jobs through the PAYE system, then that job will have a tax code attached to it. This lets HMRC know some important things like which job your Personal Allowance is linked to.

When you tell HMRC you have another PAYE job, you’ll get a New Starter Checklist to fill out. You’ll get this from your new employer. Pay attention to your tax code paperwork. Being on the wrong code can seriously affect the amount of tax you’re paying, and it’s down to you to get any mistakes sorted out—even if they weren’t yours! Getting caught on the wrong tax code can leave you with fines, pumped up tax bills and interest to pay.

If your main PAYE job pays more than the Personal Allowance you qualify for, you’ll get a tax code of 1257L for it (as of 2022/23). Your second job will get a BR, D0 or D1 code instead, depending on which tax band your combined income falls into.

If you’re making a combined total of over £190 a week, you’ll also be paying National Insurance on your income from both jobs. Keep this in mind, since it’s important to remember that there’s more than Income Tax to factor into your tax budgeting.

Read our guide to tax codes

This is an easy one. LED bulbs are more energy efficient than standard ones, and can last for decades with careful use. More to the point, they can save you £7 a year off your electricity bill per bulb! That saving alone knocked one man’s lighting bill down by 90%.

You know what else? LED bulbs are actually quite cool, too. Depending on the kind you buy and how your home’s set up, you can get dimming features for romantic evenings and movie nights or programmable “wake up” and “sunset” features to ease you in and out of bed each day. You can even get colour-shifting bulbs that you control with your phone. Basically, if you haven’t already swapped out every light bulb in your home for an energy-saving LED one, you’re falling behind the times.

Mortgage life insurance is a system designed to help your dependents cope with the costs of your remaining mortgage payments if you die. The last thing you’ll want is to leave your family without enough insurance cover to clear the amount left on your mortgage, so make sure it all adds up. Getting the maths right is important here. A decreasing term life insurance policy, for instance, will pay out less each year. To get the balance right, make sure the coverage is enough to handle the entire mortgage from the start, then arrange the length of the policy so it keeps pace with the amount you’re paying off in mortgage repayments each year.

If you qualify for a Lifetime Individual Savings Account (LISA), you could do worse than looking into getting one. The first thing to know about them is that their value can vary pretty widely according to how old you are when you take one out. At their best, they can actually make for a pretty decent retirement booster. You can open one from the age of 18, giving you a good, long run-up to make the most of it. If you’re over 39, on the other hand, you’re out of luck and need to look elsewhere. Watch out, though: even if you’re eligible to open a LISA, the interest rates aren’t high enough that you can afford to use one instead of a pension.

So, what are LISAs actually good for? One of the best answers is buying your first home. Here’s how the system works. You can pump up your LISA by as much as £4,000 a year, whether as an annual lump or by trickling the cash in whenever you can, until you hit the ripe old age of 50. As you save, the government will be topping your cash up by 25%, to a maximum of £1,000 a year. If you’re a first-time buyer, you can use your LISA cash toward your deposit - assuming the place you’re buying is worth no more than £450,000 and you’ve had your LISA open for 12 months.

If you’re not buying your first home and you’re under 60 years old, there’s a catch! Pulling cash out of your LISA will cost you 25%, basically clawing back all the bonus money the government gave you. They’ll ignore that rule if you’ve got under 12 months to live, though. If you die with cash still in your LISA, it’ll become part of your estate. Your beneficiaries won’t get charged the 25% penalty, but the account won’t be considered an ISA anymore so it’ll count toward the threshold for Inheritance Tax.

Basically, this can be a terrific option if you’re young and saving , either for your first home or to boost your retirement income alongside a pension. If that doesn’t sound like you, though, there’s a good chance you’d be better off looking elsewhere.

  • Lifetime ISAs are for people between the ages of 18 and 40 and either buying a home or setting up savings for later in life.
  • You can pay up to £4,000 a year into your Lifetime ISA until you hit 50 years old. Your first pay-in needs to be by the time you’re 40, though.
  • Whatever you pay in, the government tops it up by another 25%, up to £1,000 in top-ups per year.
  • When you turn 50, you can’t pay anything more into a Lifetime ISA.

Let's deal with the obvious one first: it's possible to have two jobs without even realising it. HMRC catches out tons of people every year who've been, for example, renting out some property in addition to having a PAYE job. What these people have in common is that they didn't understand that being a landlord on the side counts as taxable income. The same goes for people scoring extra cash by making and selling things online. If you do enough of this kind of thing that you're making over £1,000 a year from it, HMRC's going to want to hear about the money coming in. Depending on your set-up and situation, you might well owe some extra tax on that cash.

This will generally mean signing up for the Self Assessment system and filing yearly tax returns to report your income and expenses. You'll have strict deadlines to hit, whether or not you end up owing any tax - and there are some pretty nasty penalties in store if you mess things up and don't file or pay in time.

One thing that particularly muddles things up for people new to Self Assessment is that (unlike PAYE) you're paying the tax you owe for self-employment after you've earned it – at least mostly. When you file your yearly tax return, you get a bill for what you owe and a deadline to pay up (the 31st of January). However, HMRC will use the figures in your tax return to estimate the tax you'll owe the next year as well, and make you pay two “payments on account” against it. They basically divide your expected upcoming tax bill in half and make you pay a chunk of it by the 31st of July, then the rest by the following 31st of January. It's actually supposed to make things easier for you, believe it or not, since paying ahead of time in instalments is a little less of a shock to your wallet than coughing up potentially many thousands of pounds at once. Even so, it's one of those tricky little areas of the tax rules that can cause serious headaches if you don't keep your wits about you.

Earning more than £100k? Read this

Look – we’re not your dad. We’re not going to lecture you on all the reasons you ought to stop flooding your lungs with deadly tobacco smoke all day. Those reasons are right there on the packs for you, often in graphic detail – and one of the main ones to read closely is the price!
It costs more to be a smoker practically every year, since it’s one of the few taxes every government feels good about raising. Taking the figures as of March 2022, it costs a shocking £2,000 a year to finance a 10-a-day smoking habit in the UK. That’s enough in itself to fund a proper dream holiday!

While it’s definitely possible to make healthy choices at a restaurant, there really aren’t too many of us who’d consider nibbling carrot sticks at an overpriced salad bar a proper treat when eating out. It’s certainly true that a fair few restaurants offer less indulgent choices – or at least let you know on the menu what kind of damage you’ll do to your diet by eating them – but having a meal out really does tend to tempt us toward less virtuous food options.

When you look at it from a financial angle, restaurant food gets even worse. Even healthy foods can be surprisingly expensive when you’re paying someone else to prepare them for you. Whatever you pick from the menu, you’re probably looking at anywhere between £15 and £100 a head – especially if there’s alcohol involved. All told, cooking a healthy, inexpensive meal at home is better for both your wallet and your waistline. You’ll almost certainly take on fewer calories, and you won’t end up choking on an overstuffed bill (including tip).

There are some definite health benefits – both physical and mental – to spending time relaxing with friends and family. After a tough work week, a weekend “decompression session” with your mates can be exactly what you need to blow off some stress and prepare to dive back in on Monday. The trouble is, most of us tend to think of socialising as being the same as drinking. Again, we’re not here to tell you to stick solely to joyless diet soft drinks when you’re out with friends, but it’s absolutely true that pumping too much alcohol into your body does short and long-term damage to your health and wealth.

A pint in a typical British pub will run you about £4.07 at the time this guide was written. We’re just talking about averages here, obviously. You could easily find your round costing over £6 a head, depending on where and what you’re drinking. Knocking a few back with your mates 4 times in a month can stack up to around £100 – a number that drops way down the moment you move over to non-alcoholic options.

If there’s one place where making healthier choices can really save you regular money, it’s in the supermarket aisles. When you fill your basket with pre-packaged and heavily processed foods, you’re paying for a lot of stuff that won’t ever end up on your plate – and even more that you’ll wish hadn’t. Expensive packaging, colourings and additives may make the produce look more appealing, but they do nothing for your health and can leave your wallet looking distinctly malnourished. Switching to healthier whole foods, on the other hand, will leave you with a better quality diet, a brighter long-term health outlook and more cash in your pocket.

Yes, absolutely – making healthier food and fitness choices is about taking care of yourself in preparation for a longer, fuller life. Beyond that, though, there’s the ever-nagging question of how good we look to other people – and we’re not just talking about whether we dare cram our sausage roll-sculpted physiques into a set of Speedos this summer.

When you go looking for important financial deals on things like life insurance, for instance, you’re asking a company to make judgements about what kind of risk you are. After all, an insurer is basically making a bet on how long you’re likely to stick around handing over premiums before they have to pay out on your policy. The worse your health choices look to them, the more they’re going to make you pay for your life cover. On the other hand, if you go in as a non-smoker with clean health and great fitness habits, you’ll almost certainly be looking at a much better deal.

The same thing goes for private medical cover. You’re going to look like a much safer bet to a medical insurer if your body’s a well maintained, high-performance machine than if it’s a clapped-out old banger. Those health choices matter, and the better they are the lower the cost of your medical insurance. Even if you don’t have private cover, keeping yourself as healthy as possible throughout your whole life will still save you money on prescription fees and trips to your GP.

Keep checking back here for more money tips and updates. We’re experts at saving you cash and we’re always here to help. That’s the reason why you’re better off with RIFT.

Using these figures, you’d still need a £25,000 deposit for a 95% mortgage in London. In the North East, this would be £7,250. As you can see, location plays a huge part in a property’s price. If you work from home, you might be less bothered about location. If you need to commute it might be a major factor for you. Finding the right balance between price and location might help you reach a more achievable deposit.

There are other ways to own a house outright if the location is absolutely essential to you - such as Shared Ownership schemes. These let you buy between 10 and 75% of a property, paying rent on the rest. As you’re only paying for part of the property, your deposit is likely to be much lower depending on what percentage you buy.

You can buy back shares of the property until you own the whole thing in something called ‘staircasing’. Although shared ownership might be a cheaper option in the short term, it’s vital that you can afford to pay both your mortgage and rent at the same time. If you don’t, you could end up being evicted and losing your share of the house without receiving any money back.

Learning how to budget isn’t nearly as tough as it sounds. It all starts with taking a close look at your regular earnings, and what you’re doing with them. There are 2 basic mistakes to avoid right from the start, though. The first is not understanding your costs, meaning you haven’t properly divided your spending up into things you can control and things you can’t. The second is forgetting to factor some regular saving into your budget.

Let’s start by looking at your costs. The main thing here is to draw a clear line between your essential spending and everything else. Go through your receipts and bank statements and add up everything you’re spending each month on necessities like rent, mortgage repayments, Council Tax and food. These are payments you really can’t afford to skip (although you should definitely check out our guide to Council Tax Debt to make sure you’re not being overcharged). Once those absolute essentials are taken care of, whatever’s left of your monthly income is “disposable”. With that information under your belt, you’re ready to start working out a budget.

Help with council tax debt

The key to budgeting is setting up a plan you can stuck with month on month. One of the best and simplest systems is the “50/30/20” rule, which we’ve talked about in a few of our guides. See our article on fixed income saving strategies for full details, but the short version is that you rank your regular costs as Needs (50% of your income goes toward these), Wants (30%) and savings (20%). By setting yourself a simple budget like this, you’ll quickly get used to the idea of saving consistently. It’s a great financial habit to build whatever your income, and it’s worth its weight in gold if you’re saving toward a specific goal.

 

Let’s say you’ve got £600 of disposable income each month and want to save. You’ve already taken the hardest step by working out how much money you’re playing with. Setting aside £200 of that on a regular basis will still leave you with £100 a week of “fun funds” to splash on non-essentials. After a year, you’ll have £2,400 stashed away in your savings. Congratulations!

Once you’re comfortable working with a budget, you can start tweaking it to get even more organised. For instance, you could break down your spending even more. For example, setting limits on things like eating out, trips to the cinema and other entertainment costs could leave you with even more spare cash at the end of the month. Lump the extra in with your savings and you’ll hit your goals even faster. Doing this can also help you make up for any months when you weren’t able to save as much as you wanted. Upping your month-by-month saving by even a little can help replace the missed amount over time, which is a lot easier than trying to do it all at once.

There’s a pretty impressive range of mobile apps designed to help you save. We often talk about how important it is to make saving a habit, but some of this software’s designed to make the whole process completely automatic. For instance, apps like Monzo, Plum, Moneybox and even NatWest have a feature called “round-up saving” which actually lets you save cash even while you’re spending it. Basically, every time you pay for something, the app will round up the price to the nearest pound and slot the change into a savings account. You’ll never notice the difference while you’re actually shopping, and your savings will quietly mount up in the background. This can be a real boost to your finances over time, particularly if you’re saving toward something specific like a holiday. You can read about some of the best money saving apps in our guide, “The 4 Best Money Saving Apps for Android”.

Money saving apps for Android

The cost of everyday groceries might be rising, but a few smart choices can still keep the costs down. A survey from Which? in January 2022 checked out a basket of 23 basic essentials, both big brands and store-owned, and compared the overall cost across a range of supermarkets. Overall, Lidl worked out the best at £24.78. Up at the other end of the scale, though, we find Waitrose, where that same basket of groceries would run you £33.94. Assuming that the supermarkets all keep their prices in the same proportions, you could save up to £476.32 a year just by switching from the most expensive shop to the least.

Saving cash isn’t a sprint. It’s a marathon where the key to victory is setting a pace you can keep up consistently. It’s about making small changes that mount up over time, rather than relying on occasional one-off windfalls to bulk up your savings. Just bringing in coffee from your kitchen to work instead of blowing £3 a day in a cafe each day could save you £60 or more a month. It takes virtually no effort to do, but has a real impact over a year. For more simple, everyday changes you can make to save real cash, see our guide, “How to Save Money on Day-to-Day Expenses”.

We’ve been living in an age when more and more businesses are trying to hook us into subscription services. From the music we listen to and the films we watch right up to food delivery services, we’re stacking subscriptions on top of subscriptions with no end in sight. How much actual value are we getting, though? Those rolling monthly payments keep on draining cash out of our bank accounts whether we’re using them or not, and ditching even one of them could easily save you over £100 a year. If you find you can’t live without it, you can always sign back up whenever you want to. In the meantime, you’ll still have save some money.

If you’re struggling with your finances, there’s a range of benefits that you might not even realise you qualify for. Depending on your situation, you might be able to claim some help from the government. The first step is to check out the benefits calculator on the gov.uk website. If you’re eligible for anything, you should be able to find out there.

Keep checking back here for more money tips and updates. We’re experts at saving you cash and we’re always here to help. That’s the reason why you’re better off with RIFT.

Knowing what kind of financial ride you’re in for is absolutely critical when you’re about to make any kind of major money decision. With weddings, there are lots of creeping costs that can blow through your budget if you don’t lock them down early. So, before you start making any big plans about venues and vendors for your wedding, set yourself a hard limit of what you’re able to spend. Sticking to that limit might be a challenge when you start looking at all the romantic little “extras” on offer, but it’s the key to keeping your spending under control.

Wedding planning experts Hitched ran a survey back in 2021 to find out what the typical cost of a wedding in the UK stacked up to. Their results showed that couples were spending an astonishing average of £17,300 on getting married. That’s not even the end of it, either. That figure only covers the costs of the wedding day itself. Engagement rings aren’t included, for instance. Those alone can cost anything from £1,000-£1,700 each on average, with the amount people are prepared to splash out varying around the country. A typical honeymoon can easily add a whopping £4,500 to that total – although many actually cost significantly more.

The most important thing to do is set a budget that’s realistic, and then stick to it. Don’t get caught up in what the television says your wedding ought to be. This is an intensely personal decision and it needs to be treated with respect. It’s absolutely possible to blow through hundreds of thousands of pounds on a really lavish wedding with loads of guests in a high-end venue. If you can afford that and enjoy the idea of it, then we’re not going to try and stop you. If you’re more interested in being married than getting married, though, then a register office can sort you out for as little as £57.

Free budget planner

Okay, you’ve set the limits of your budget and managed your expectations about what you can realistically get for that amount of cash. Now you’ve got to start saving up. Obviously, the length of time this is going to take, and the amount of struggle you’ll have getting there, completely depend on your financial situation and saving goals. On average, though, the smart move is to start saving and planning about 20 months before the big day.

It’s also wise to set up a separate savings account for your wedding fund. The idea is to keep that money “ring fenced” so it doesn’t get eaten into by your everyday costs or unexpected bills. Consistency is the key here. It’s almost always better to save a little bit of money reliably every month than to throw in the odd chunk of cash every so often.

Need some help setting your basic goals and timelines? Use our free   to work out how long it’ll take to reach your saving goals. You can also check out our other guides for more advice on how to save. Whether you’re buying a new home  or a used car, RIFT has you covered.

6 ways to save for a house

How to budget for a new car

We’ve also got a   to help you separate out the everyday costs you can’t control from the ones you can bring down. It’s based on the 50/30/20 system, which you can read about in some of our budgeting guides.

Essentially, it just comes down to working out exactly how much money you can count on coming in each month. With that total firmly in mind, you can start to plan your spending. 50% of your income goes toward essential costs like mortgage repayments or rent, 30% of it counts as your “fun funding” and the remaining 20% is saved or invested. It’s all about taking tighter control of your finances and learning where you can reduce unnecessary costs. Whatever large expenses you’re saving toward, it all starts with a solid, realistic plan. Once that’s in place, the rest is up to you!

For most happy couples planning their big day, the wedding venue’s going to be the biggest singe expense they have to deal with. Strange as it sounds, there’s a UK law that limits the types of building that you can use to get married in. Your chosen venue needs to be either a registered religious building like a church or other types of premises that are approved for the purpose by the local authority. Because of this rule, it can be tricky to control the overall cost of your wedding venue. On average, you’re probably looking at a little over £5,000 to book a typical UK venue – but obviously there’s a huge difference between the most expensive places and the cheapest. It might have been love at first sight, but it’s still worth checking out the competition when it comes to booking a wedding venue. A little legwork up-front could see you grabbing a much better package elsewhere.

If you’ve got your heart set on a specific place, does that mean you’re automatically out of luck if the cost doesn’t fit your budget? Not necessarily. The price you’ll be charged can vary with the level of demand the venue’s dealing with at any given time. If the place you want to use is a little too pricey on the date you’ve picked, shifting to a mid-week time slot could bring it down a little. The same goes for the time of year you choose for the event. Booking in the summer, for instance, will often be a lot more expensive than the cooler months. Picking a date outside of high-demand periods could actually mean the difference between landing the wedding venue of your dreams and settling for second-best.

After the venue itself, your wedding’s food and catering bills likely to be the next biggest cost to tackle. With prices on the rise all over, an average wedding currently runs about £65 per person for food and drink. If you’ve got a fair-sized family or a bunch of friends and well-wishers to feed, this bill can stack up really fast.

You’ve got a range of options to look into for wedding food. At the top end of the scale, you could go for the fully catered option. A lot of people feel this approach really makes the day feel special. On the other hand, it can also whack thousands onto the cost of your big day. £4,000 is a reasonable estimate of what to expect from a fully catered wedding – and that’s before you even add the cake!

If that sounds like a little too much to choke down, you could find yourself coughing up a lot less by opting for a buffet-style spread instead. This can actually work out better for your guests as well as your budget, since people will have more choice over what they eat and drink (which can be important if people have specific allergies or preferences to consider). If you’re dead-set on catered sit-down dining for your wedding guests, your chosen venue might have an all-in package deal that’s worth considering. It’ll often work out a fair bit cheaper than bringing in an outside catering company.

Keep checking back here for more money tips and updates. We’re experts at saving you cash and we’re always here to help. That’s the reason why you’re better off with RIFT.

The Marriage Allowance scheme is pretty simple:

Tax Free Personal Allowance Transferable Amount
Earning less than £12,570 (2021/22 tax year) £1,260

That counts for civil partnerships as well as marriages. As long as your partner isn’t earning more than the upper threshold for Basic Rate tax of £50,270, you can qualify.

Amount you won't get taxed per year Combined saving per year
£1,260 £252

That’s assuming you had £1,260 of unused Personal allowance to transfer, of course. If not, claiming Marriage Allowance might suddenly see you paying some tax you weren’t before – although it could still work out better overall. The tax thresholds and Personal Allowance obviously change over time, but you can still claim back your tax for the last 4 years. The idea of Marriage Allowance is to make sure people get the full benefit of their Personal Allowance, even if they can’t use all of it themselves. Pensioners can apply, too - as can people living abroad, as long as they've got a Personal Allowance to transfer. Remember that you don't even need to have an income to have a Personal Allowance - so don't think you'll be left out because you aren't earning. Your partner will get a new tax code, while yours will sprout an N at the end of it. Those changes are nothing to worry about and we have everything you need to know on our tax codes explained pages.

Thinking of getting married?

If you’ve already chosen RIFT to tackle HMRC for you, then you won’t have to lift a finger or pay a penny to claim your Marriage Allowance. We’ll do it automatically when we handle your tax refunds or returns, with no extra charge!

If you’re going it alone, you can get it all done online at the government website, as long as you’ve got both of your National Insurance numbers handy. Some proof of your identities will also be needed, as usual when you’re dealing with HMRC.

Marriage Allowance is a great way to lighten your financial load a little each year, and it shouldn’t be a real strain to claim it. When it comes to the heavy lifting of Self Assessment and tax refunds, though, that’s where the real experts get to work. Specialist help from RIFT means more money in your pocket and no hassles from HMRC. Get in touch with all your tax questions, problems and concerns, and let us show you why you’re always better off with RIFT.

Yes, both you and your spouse will have your tax codes changed when you claim Marriage Allowance. The partner who’s giving part of their Personal Allowance to the other will now have an N code. The one who’s receiving it will get an M code.

No. In order to claim Marriage Allowance, the partner receiving the extra portion of Personal Allowance must only be paying Income Tax at the basic rate, while the one transferring it must be earning less than their own Personal Allowance.

If your income while on Maternity Leave is below your Personal Allowance, and your partner pays tax at the basic rate, then you can claim Marriage Allowance to transfer some of your unused Personal Allowance to them.

When you're claiming tax relief for food, you need to keep hold of things like receipts and order tickets as evidence of what you’ve spent. If you're paying by card, keep the slip that comes out of the machine. You can also get this information from bank statements but that will be much harder work.

If you take cash out of a machine to pay then take a quick photo of the withdrawal receipt. However, as with your bank statement this will only show what you took out, not what you spent so get a photo of the till total or anything else that shows the actual price you paid.

It’s a good idea to take a photo the price board or menu as extra evidence of your claim. If the menu doesn’t change you don’t have to take the same picture everyday – just one to show the prices is fine.

Here are some examples that customers have taken in the past. You don't need to take an award winning photo, just a quick snap of the prices like this will do.

You won’t need us to send all the records for us to do your claim but we need to know that you have evidence of your spending in case HMRC do ask for it and to make sure you're protected by our RIFT Guarantee.

We can make a refund claim for your food related expenses as part of your travel tax refund, but not as a stand alone expenses claim.

Use our tax calculator to see if you're due a refund.

You don’t need to keep lots of paper. Store any photos, screenshots or scans somewhere you can easily find them on your computer. For now, just hold onto them. We may need to ask you for these at a later date to support your claim.

It's a good idea to take a photo of the menu board or price list where you bought your food. If it doesn’t change, you don’t have to take the same picture everyday – just one to show the prices like these ones taken at real works canteens.

If you order your food online then save the confirmation email.

You probably won't need them all to back up your tax refund claim but we need to know that you have the evidence if the tax man does ask for it.

We can make a refund claim for your food related expenses as part of your travel tax refund, but not as a stand alone expenses claim.

Find out more about tax refunds.

It's tricky to claim tax relief if you don't have proof of what you've spent. We may still be able to include your food costs in your refund claim if you’re working on a site where we have details of standard costs for.

Just remember to start keeping your records from now on to make things easier next year.

Use our tax calculator to find out if you're due a refund.

Yes. If you are staying overnight for work and your employer does not refund the money you spent on meals then you can claim tax relief in the same way as you can with other work related expenses.

Again, it’s important that you’re honest. Don’t claim to have eaten a 3 course meal in the hotel restaurant if you popped out to the local takeaway.

Don't forget to claim for the cost of food purchased during travelling to your temporary workplace. Whether you buy your food from the buffet trolley, the service station or at a shop or takeaway en route remember to keep the evidence so that we can claim the tax relief for you.

Read more about tax refunds.

If you can't get a receipt for your food, even a photo of the price board can be helpful in proving what you've spent. Just take a quick snap with your phone and keep it safe. The taxman's not trying to trip you up or cheat you out of money. All he's after is evidence to back up your claim, so he's sure you're paying the right amount of tax.

You won’t need to send us all the photos for your claim. We just need to know you have them in case HMRC do ask for some evidence of your costs to make sure you're covered by the RIFT Guarantee.

Sometimes but if the subsistence allowance completely covers the cost of your food while you’re away from home for overnight stays then you can’t claim anything else.

If the amount does not cover all your expenses for food then you will be able to claim the difference.

Read more about tax refunds.

If you’ve made your lunch at home, then you can’t claim the costs. This is because the groceries are part of your personal shopping bill, not work related expenses.

It's often strange little details like this that easily trip people up. That's why we're here to help make sure you get the best refund possible and always stay on the right side of HMRC's rules.

Use our Tax Calculator to find out if you can claim.

If you’re self-employed, freelance, contracting or working CIS in construction, this will be handled under your expenses in your self-assessment tax return in the normal way.

The same principles apply though, you will need to be able to provide evidence of what you’ve spent in order to claim them as costs. Keep your meal receipts in the same way as you keep all your other records needed for your tax return.

Read more about self assessment.

You can still claim even if your canteen is subsidised - but only for the subsidised amount that you paid.

Make sure to keep a record of what you spend so that we can work out the total at the end of the year.

If you didn’t get a receipt or meal ticket then just take a photo of the menu board or price list where you bought your food. If it doesn’t change, you don’t have to take the same picture everyday – just one to show the prices is fine.

Read more about tax refunds.

Many people assume it’s not worth the hassle of keeping records of what you spend on meals because the refund you get back won’t be worth it.

Shockingly it turns out that you're probably looking at about a staggering £90,000 spent on food over your working life – that’s enough to pay off an average mortgage 6 years early!

The cost of food varies a lot up and down the country, and depends on things like whether you have a subsidised canteen at work. Still, the average daily spend of a person at work is £5 - £10. This means you should be getting £250 - £480 more  back from HMRC in your refund every year.

If you don’t claim you’re missing out, on average, around £12-25k over the course of your working life – and that’s a considerable amount of money for taking a few photos of what you had for lunch.

Let's have a look at some examples:

Bill, is a builder working on a construction site in London.

  • He arrives in the chilly early hours and grabs a quick cuppa to warm up before work  on his way in (£1.20).
  • After a few hard hours, he gets a tea break at 10am. He only had a light breakfast, so he buys a bacon roll from the local shop to keep him going until lunch (£2.49).
  • Lunch today turns out for be a burger with chips and a soft drink from the on-site canteen (£4.50).
  • In the mid-afternoon, he gets another break. There's a food van handy, so he buys himself a quick snack and a drink there (£1.75) before finishing up his day's work.

Were you keeping track? Bill’s spent £9.94 already – and he’s probably a bit dehydrated at that!

All pretty simple so far, right? Only, Bill had to trek down from his home in Scotland for this job and travel home at weekends. He claims his tax refunds for the food he buys during his work day, but he's still missing out badly.

  • He grabs a sandwich and a beer (£8.80 – and that’s if he has just one drink) on the train for his dinner on the way south which he should be claiming for.
  • When he arrives he has to stay overnight, which means bills for his evening meals (£7.50 in a local pub), because he doesn’t get a subsistence allowance from his employer
  • Then he has to fork over the price of next morning's breakfast (£5.95)

This means he spends £22.25 on food during his travels to work.

We can make a refund claim for your food related expenses as part of your travel tax refund, but not as a stand alone expenses claim.

Use our Tax Refund Calculator to find out what you could claim.

If you’re travelling to a temporary workplace then you can claim the costs for food purchased during this time.

This might be when you are travelling during the working day to temporary workplaces or it might be if you have to travel a long distance to get to a temporary site that you’re staying over at.

Whether you buy your food from the buffet trolley, the service station or at a shop or takeaway en route remember to keep the evidence so that we can claim the tax relief for you.

Find out what you could claim with our Tax Calculator.

If you’re part of the Hungry Soldier scheme then you sign for your meals and the cost is taken directly out of your salary in arrears. You will need to keep a record of how much this adds up to each month and let us know what you spent.

The amount taken out should be shown on your payslip. You’ll need to give us copies of your payslips for your travel refund anyway, so you should be keeping those.

Use our Tax Refund Calculator to find out how much you could claim.

When you're claiming tax relief for food, you need to keep hold of things like receipts and order tickets as evidence of what you’ve spent. If you're paying by card, keep the slip that comes out of the machine. You can also get this information from bank statements but that will be much harder work.

If you take cash out of a machine to pay then take a quick photo of the withdrawal receipt. However, as with your bank statement this will only show what you took out, not what you spent so get a photo of the till total or anything else that shows the actual price you paid.

It’s also a good idea to take a photo of the price board or menu as extra evidence of your claim. If the menu doesn’t change you don’t have to take the same picture everyday – just one to show the prices is fine.

  • If you pay directly in the Cookhouse or Mess, you're probably paying in cash and you might not get a receipt. We need to have evidence of your personal expenditure so that we can claim the tax relief on it so make sure you keep a record in some of the ways listed above.
  • If you’re an officer you probably have the option to sign for your food and get an expenses receipt at the end of the month. You can keep the print out, but it’s probably easier to take a photo or screen grab of it and save it on your computer. If you haven’t been keeping these receipts, then you should be able to ask for copies of them as they should be available from your administration department.
  • If you’re part of the Hungry Soldier Scheme, then you sign for your meals and the cost is taken directly out of your salary in arrears. This should be visible on your payslips.

If you haven’t been good at keeping receipts to date, start keeping them from now on to make claiming easier next year. You wouldn’t throw away a £5 note, so don’t throw away your receipts as that’s what they could be worth to you.

We can make a refund claim for your food related expenses as part of your travel tax refund, but not as a stand alone expenses claim.

Use our Tax Refund calculator to find out how much you can claim.

You don’t need to keep lots of paper. You can take photos or scans of them and save them somewhere you can easily find them on your computer.

For now, just hold onto them. We may need to ask you for them at a later date to support your claim.

You may not need to send them to us for your tax refund claim but we need to know that you have the evidence to hand if HMRC does ask for it so that you're protected by the RIFT Guarantee.

This depends on quite a few factors about your personal situation, so it’s best to speak to us directly and we’ll talk it through with you and let you know what to do.

You can claim for your meals bought in the Cookhouse or Mess during working hours though.

 

Read more about tax refunds for the Armed Forces.

This depends on whether your permanent residence is elsewhere. If you’re not sure and want to talk it through with us then give us a call and we’ll let you know how the rules apply to your situation.

If it is then you can claim tax relief against the costs of any takeaways or meals out you have to buy.

If you ordered online keep a copy of the email confirmation or save a screenshot.

If you went to the takeaway, then take a photo of your receipt or the menu board.

Use our Tax Calculator and find out if you're due a refund.

If you’re in Substitute Living Single Accommodation (SSA), you’ll get an additional allowance given to purchase food as you won’t be entitled to use the Cookhouse. You get this as a supplement in your pay so you can only claim if your expenses exceed the amount of the allowance.

Find out more about tax refunds for members of the Armed Forces.

Food that you don't personally pay for can't be claimed against for tax relief. For example, if you're at sea in the Royal Navy, your meals are provided for you and don't count toward you tax refund.

You should keep track of any meals you have to buy onshore or off-base, though, as those can often count.

Read more about tax refunds for the Armed Forces.

 

If you’re part of the Hungry Soldier scheme then you sign for your meals and the cost is taken directly out of your salary in arrears. You will need to keep a record of how much this adds up to each month and let us know what you spent.

The amount taken out should be shown on your payslip. You’ll need to give us copies of your payslips for your travel refund anyway, so you should be keeping those.

Use our Tax Refund Calculator to find out how much you could claim.

When you're claiming tax relief for food, you need to keep hold of things like receipts and order tickets as evidence of what you’ve spent. If you're paying by card, keep the slip that comes out of the machine. You can also get this information from bank statements but that will be much harder work.

If you take cash out of a machine to pay then take a quick photo of the withdrawal receipt. However, as with your bank statement this will only show what you took out, not what you spent so get a photo of the till total or anything else that shows the actual price you paid.

It’s also a good idea to take a photo of the price board or menu as extra evidence of your claim. If the menu doesn’t change you don’t have to take the same picture everyday – just one to show the prices is fine.

  • If you pay directly in the Cookhouse or Mess, you're probably paying in cash and you might not get a receipt. We need to have evidence of your personal expenditure so that we can claim the tax relief on it so make sure you keep a record in some of the ways listed above.
  • If you’re an officer you probably have the option to sign for your food and get an expenses receipt at the end of the month. You can keep the print out, but it’s probably easier to take a photo or screen grab of it and save it on your computer. If you haven’t been keeping these receipts, then you should be able to ask for copies of them as they should be available from your administration department.
  • If you’re part of the Hungry Soldier Scheme, then you sign for your meals and the cost is taken directly out of your salary in arrears. This should be visible on your payslips.

If you haven’t been good at keeping receipts to date, start keeping them from now on to make claiming easier next year. You wouldn’t throw away a £5 note, so don’t throw away your receipts as that’s what they could be worth to you.

We can make a refund claim for your food related expenses as part of your travel tax refund, but not as a stand alone expenses claim.

Use our Tax Refund calculator to find out how much you can claim.

You don’t need to keep lots of paper. You can take photos or scans of them and save them somewhere you can easily find them on your computer.

For now, just hold onto them. We may need to ask you for them at a later date to support your claim.

You may not need to send them to us for your tax refund claim but we need to know that you have the evidence to hand if HMRC does ask for it so that you're protected by the RIFT Guarantee.

This depends on quite a few factors about your personal situation, so it’s best to speak to us directly and we’ll talk it through with you and let you know what to do.

You can claim for your meals bought in the Cookhouse or Mess during working hours though.

 

Read more about tax refunds for the Armed Forces.

This depends on whether your permanent residence is elsewhere. If you’re not sure and want to talk it through with us then give us a call and we’ll let you know how the rules apply to your situation.

If it is then you can claim tax relief against the costs of any takeaways or meals out you have to buy.

If you ordered online keep a copy of the email confirmation or save a screenshot.

If you went to the takeaway, then take a photo of your receipt or the menu board.

Use our Tax Calculator and find out if you're due a refund.

If you’re in Substitute Living Single Accommodation (SSA), you’ll get an additional allowance given to purchase food as you won’t be entitled to use the Cookhouse. You get this as a supplement in your pay so you can only claim if your expenses exceed the amount of the allowance.

Find out more about tax refunds for members of the Armed Forces.

Food that you don't personally pay for can't be claimed against for tax relief. For example, if you're at sea in the Royal Navy, your meals are provided for you and don't count toward you tax refund.

You should keep track of any meals you have to buy onshore or off-base, though, as those can often count.

Read more about tax refunds for the Armed Forces.

 

When you're claiming tax relief for food, you need to keep hold of things like receipts and order tickets as evidence of what you’ve spent. If you're paying by card, keep the slip that comes out of the machine. You can also get this information from bank statements but that will be much harder work.

If you take cash out of a machine to pay then take a quick photo of the withdrawal receipt. However, as with your bank statement this will only show what you took out, not what you spent so get a photo of the till total or anything else that shows the actual price you paid.

It’s a good idea to take a photo the price board or menu as extra evidence of your claim. If the menu doesn’t change you don’t have to take the same picture everyday – just one to show the prices is fine.

Here are some examples that customers have taken in the past. You don't need to take an award winning photo, just a quick snap of the prices like this will do.

You won’t need us to send all the records for us to do your claim but we need to know that you have evidence of your spending in case HMRC do ask for it and to make sure you're protected by our RIFT Guarantee.

We can make a refund claim for your food related expenses as part of your travel tax refund, but not as a stand alone expenses claim.

Use our tax calculator to see if you're due a refund.

You don’t need to keep lots of paper. Store any photos, screenshots or scans somewhere you can easily find them on your computer. For now, just hold onto them. We may need to ask you for these at a later date to support your claim.

It's a good idea to take a photo of the menu board or price list where you bought your food. If it doesn’t change, you don’t have to take the same picture everyday – just one to show the prices like these ones taken at real works canteens.

If you order your food online then save the confirmation email.

You probably won't need them all to back up your tax refund claim but we need to know that you have the evidence if the tax man does ask for it.

We can make a refund claim for your food related expenses as part of your travel tax refund, but not as a stand alone expenses claim.

Find out more about tax refunds.

It's tricky to claim tax relief if you don't have proof of what you've spent. We may still be able to include your food costs in your refund claim if you’re working on a site where we have details of standard costs for.

Just remember to start keeping your records from now on to make things easier next year.

Use our tax calculator to find out if you're due a refund.

Yes. If you are staying overnight for work and your employer does not refund the money you spent on meals then you can claim tax relief in the same way as you can with other work related expenses.

Again, it’s important that you’re honest. Don’t claim to have eaten a 3 course meal in the hotel restaurant if you popped out to the local takeaway.

Don't forget to claim for the cost of food purchased during travelling to your temporary workplace. Whether you buy your food from the buffet trolley, the service station or at a shop or takeaway en route remember to keep the evidence so that we can claim the tax relief for you.

Read more about tax refunds.

If you can't get a receipt for your food, even a photo of the price board can be helpful in proving what you've spent. Just take a quick snap with your phone and keep it safe. The taxman's not trying to trip you up or cheat you out of money. All he's after is evidence to back up your claim, so he's sure you're paying the right amount of tax.

You won’t need to send us all the photos for your claim. We just need to know you have them in case HMRC do ask for some evidence of your costs to make sure you're covered by the RIFT Guarantee.

Sometimes but if the subsistence allowance completely covers the cost of your food while you’re away from home for overnight stays then you can’t claim anything else.

If the amount does not cover all your expenses for food then you will be able to claim the difference.

Read more about tax refunds.

If you’ve made your lunch at home, then you can’t claim the costs. This is because the groceries are part of your personal shopping bill, not work related expenses.

It's often strange little details like this that easily trip people up. That's why we're here to help make sure you get the best refund possible and always stay on the right side of HMRC's rules.

Use our Tax Calculator to find out if you can claim.

You can still claim even if your canteen is subsidised - but only for the subsidised amount that you paid.

Make sure to keep a record of what you spend so that we can work out the total at the end of the year.

If you didn’t get a receipt or meal ticket then just take a photo of the menu board or price list where you bought your food. If it doesn’t change, you don’t have to take the same picture everyday – just one to show the prices is fine.

Read more about tax refunds.

Many people assume it’s not worth the hassle of keeping records of what you spend on meals because the refund you get back won’t be worth it.

Shockingly it turns out that you're probably looking at about a staggering £90,000 spent on food over your working life – that’s enough to pay off an average mortgage 6 years early!

The cost of food varies a lot up and down the country, and depends on things like whether you have a subsidised canteen at work. Still, the average daily spend of a person at work is £5 - £10. This means you should be getting £250 - £480 more  back from HMRC in your refund every year.

If you don’t claim you’re missing out, on average, around £12-25k over the course of your working life – and that’s a considerable amount of money for taking a few photos of what you had for lunch.

Let's have a look at some examples:

Bill, is a builder working on a construction site in London.

  • He arrives in the chilly early hours and grabs a quick cuppa to warm up before work  on his way in (£1.20).
  • After a few hard hours, he gets a tea break at 10am. He only had a light breakfast, so he buys a bacon roll from the local shop to keep him going until lunch (£2.49).
  • Lunch today turns out for be a burger with chips and a soft drink from the on-site canteen (£4.50).
  • In the mid-afternoon, he gets another break. There's a food van handy, so he buys himself a quick snack and a drink there (£1.75) before finishing up his day's work.

Were you keeping track? Bill’s spent £9.94 already – and he’s probably a bit dehydrated at that!

All pretty simple so far, right? Only, Bill had to trek down from his home in Scotland for this job and travel home at weekends. He claims his tax refunds for the food he buys during his work day, but he's still missing out badly.

  • He grabs a sandwich and a beer (£8.80 – and that’s if he has just one drink) on the train for his dinner on the way south which he should be claiming for.
  • When he arrives he has to stay overnight, which means bills for his evening meals (£7.50 in a local pub), because he doesn’t get a subsistence allowance from his employer
  • Then he has to fork over the price of next morning's breakfast (£5.95)

This means he spends £22.25 on food during his travels to work.

We can make a refund claim for your food related expenses as part of your travel tax refund, but not as a stand alone expenses claim.

Use our Tax Refund Calculator to find out what you could claim.

If you’re travelling to a temporary workplace then you can claim the costs for food purchased during this time.

This might be when you are travelling during the working day to temporary workplaces or it might be if you have to travel a long distance to get to a temporary site that you’re staying over at.

Whether you buy your food from the buffet trolley, the service station or at a shop or takeaway en route remember to keep the evidence so that we can claim the tax relief for you.

Find out what you could claim with our Tax Calculator.

It probably sounds obvious, but it’s worth spelling it out: when you’re not looking after your mental health, your ability to earn money can be put under pressure. Stress and depression can throw obstacles in your way that stop you thinking your way around a financial problem. You might find yourself avoiding talking to your bank or even checking your balance. You might start leaving bills unopened or even throwing them out – anything to avoid tackling your financial troubles head-on. Meanwhile, those problems just keep stacking up – and not just in the obvious ways. Yes, unpaid debts will only increase with time, but poor mental health can also have an impact on things you might not immediately think of – like ramping up your insurance premiums, for instance.

Looking at it from the other side, your finances can have a real effect on your mental health, too. In fact, money pressures are some of the main causes of anxiety and other mental health issues. When you’re facing serious financial trouble, opening an envelope, going to a benefits assessment or even just reaching out for help can be incredibly difficult. You might find yourself losing sleep or pulling away from friends and family, both of which will only make it harder to dig your way out of an emotional hole.

Meanwhile, a really tight money situation can make it more difficult to afford the basic necessities it takes to look after yourself. For some people, that might mean they can’t get the therapy or medication they need. For others, it could even leave them struggling to pay for essentials like food, heating and water.

Moneybox is a great little app with some really useful features and options under its hood. Depending on the kind of savings account you need, you can pick from Moneybox’s Simple Saver (if you need instant access to your rainy day stash) or versions with notice periods of 45,95 of 120 days. It only takes a few minutes to sign up, and you can kick off your account with as little as £1.

As for how you actually use Moneybox, you can set it up to accept regular weekly or monthly pay-ins, use it for “round-up saving” (basically socking away the change into your account whenever you spend) or both. You’ve also got a lot of control over the way your money’s saved or invested. You get interest on the basic kinds of savings account they offer (with the rates going up slightly for the versions with longer notice periods), or you can put the money into various types of ISA. You can even do things like put your round-ups toward your eventual pension pot if you want.

The nice thing about the Plum app is that it lets you group all your various bank accounts and cards into a single place. The idea is that seeing everything all together like this will give you a full and clear picture of your earnings, spending and savings. It’s a smart system, too. It can use the information you give it to study your spending habits and make better decisions to boost your saving power.

Plum is a free app, so it won’t cost you anything at all to use it for basic saving. However, there are some other pretty handy features you might decide are worth laying down a subscription fee for. Maybe you’re interested in hearing about investment opportunities, setting certain kinds of deposit rules or using its advanced budgeting tools, for instance. You’ll also need a Plum Plus/Pro subscription to open an Easy Access Premium account, with a slightly higher interest rate than the free version.

One of the most useful things about savings apps in general is how they help train you to handle your money better. For example, Chip is all about saving without stressing out over it. It can study your spending habits, make suggestions about how much you should be able to save and even move what you can spare into a savings account for you. You can set goals for yourself, like saving toward a holiday or a house deposit, then let the app guide you toward small, affordable and regular savings you can make toward your target. If you don’t want to stick to its suggestions, you don’t have to – and its AI systems will remember your decisions and use them to offer better advice in future. You can also get access to your cash whenever you want it.

Another bank-in-your-pocket type of service, Monzo links up with other popular services like Apple Pay and Google Pay. It’s got some interesting features, like the ability to switch your energy provider. You can divide your income into different categories for your savings, bills and general spending, and set specific budgets to help control the cash you’re splashing. There’s even an option to buy now and pay later with Monzo Flex.

You can save in a range of ways with Monzo, from fixed-rate savings accounts to Easy Access ISAs. You can also set up separate “pots” to save toward any specific goals you have. Again, there’s a round-up saving feature to help make your saving more automated and sustainable.

These four examples really are just the tip of the savings app iceberg, and more are cropping up all the time. Depending on your savings goals and the kind of phone you use, you might find the exact combination of features you’re looking for in other options like Starling Bank, Revolut or Money Dashboard. They’ve all got something to offer, like Moneyhub’s friendly little “nudges” when you’ve got upcoming payments to make, so look around a bit before making up your mind.

If we had to make just one money-saving app recommendation, though, make sure you’ve grabbed the RIFT app to help you make and track your tax refund claims. You can even refer your friends to RIFT straight from your phone’s address book for their own tax refunds, earning cash rewards and prize draw entries just for being a good mate.
Keep checking back here for more money tips and updates. We’re experts at saving you cash and we’re always here to help. That’s the reason why you’re better off with RIFT.

The idea of transferring £2,022 straight out of your current account into a savings account that’s not meant to be touched is scary for many. If you’re worried you’ll struggle to cover bills and living expenses, it’s just not possible.

But that doesn’t mean it’s beyond your financial reach to save that much in a year. In fact, when you break it down, it’s suddenly much more manageable.

Take that £2,022, and divide it among the 52 weeks of the year. Don’t worry, we’ve done it for you! It works out as £38.88 a week, which of course sounds a lot easier to do. Set a reminder each week to transfer that £38.88 into your savings account so you don’t go spending it!

Or, better yet, if you have both a checking and savings account with the same bank, you can set up an automatic transfer. So, the money goes straight into your savings each week. You won’t even have to think about it.

Free budget planner

Okay, we know – simply transferring £38 once a week isn’t much of a challenge for some. But if you’re new to saving, it’ll help you get into the habit of putting money aside for the future. However, if you think you can afford to put away a little bit more each week, why not add a bit of fun to your saving journey?

Here’s how it works. On Monday, transfer £1.50 into your savings. Then on Tuesday, £3. Then Wednesday, £4.50. Each day, increase the amount you save by another £1.50.

By the time Sunday comes around you’ll transfer £10.50 in your account, making it £42 after a week. The following Monday, restart at £1.50 and work your way up each day, carrying on the same pattern for a year.

If you stick to the challenge week in, week out for a year, you’ll have £2,184 saved up and ready for you to use! Take the family on holiday, buy new furniture or even invest it. Not bad!

We get it – Contactless payments and paying for things by phone mean it’s easier than ever to spend without thinking about it. But have you ever actually stopped to look at how much money leaves your current account? You might be in for a nasty shock.

Plenty of banking and budgeting apps out there can split your payments and categorise them. They’ll separate them into necessities like energy bills, shopping trips for clothes, and leisure activities like gig tickets and restaurant bills. With a breakdown like this, you can see the things that you’re perhaps spending a little too much on and cut back a little to make a difference.

For example, are you going out to eat or getting a takeaway every week? The average cost of a restaurant meal in the UK is between £15 and £25. Let’s assume for argument’s sake that each meal costs £25 – just by cutting out a single restaurant visit per month, you’ll save £300 a year. That puts you well on your way to your savings goal.

And what about streaming services? Fair enough, they only cost around £10 a month each, which is very reasonable – but how many are you signed up to? Around 60% of British households now pay for at least one streaming subscription, but we reckon the majority are paying for more than one. Netflix, Spotify, Amazon Prime, Apple TV, Disney +, NowTV- the list is endless!
When it’s a direct debit payment, it’s easy to forget you’re paying for the service until the money leaves your account. Take a look at how often you use each subscription service and see if it’s worth unsubscribing for a while.

If you use it, keep it! It’s not that big an expense for keeping entertained. But if you’re not using one anymore, unsubscribing for a year could save you around £120!

The 1p challenge is a great way to save hundreds of pounds over one year without hitting your day-to-day finances. But the truth is, if you’ve got a target of around £2,000 to save, you’ll need to step up your game a bit.

Briefly though, the 1p challenge requires you to save a penny on the first day, then 2p the following day, then 3p, adding a penny each day until the end of the year when you save £3.65. After a full year, you’ll have £667.95 saved.

It's great but it still doesn’t come close to that £2000 target. However, that doesn’t mean you can’t do a 365-day challenge of your own. Instead of starting off with 1p, start off with £3.01. That’s roughly the price of a cup of coffee on the high street. Just like the original method, add a penny to the amount you save every day. By the end of the year, you’ll be saving around £6.60 (or the cost of lunch) every day. And when you add it all up after you’ve completed your year of saving, you’ll have well over £1700 saved up! That’s not that far from the target at all…

It’s no secret that groceries are really starting to shoot up in price as a result of inflation, import costs and availability. But there are always a few useful cheat codes you can use to keep that weekly supermarket bill to a minimum.

Most supermarkets have reward schemes that take money off your bill. Usually when you spend a certain amount, buy certain products, or return a number of times to the store. For example, Tesco’s Clubcard reward scheme marks down the price of particular groceries across the store, but you only pay the discounted price when you’re a Clubcard member. So, what’s stopping you?

Some products end up being up to 50% cheaper with rewards schemes, so keep an eye out for the items that are on offer and choose these over the fully priced alternative.

But of course, it’s not just Tesco. There are also app based reward schemes like Lidl Plus with exclusive rewards just for app users. And Sainsburys take £2.50 off your bill for every 500 Nectar points you earn. So, whichever supermarket you go to, it’s always worth signing up to their reward scheme if they have one.

If you’re not a member of any reward schemes, don’t worry. There’s still one big thing you can do to save money on your bill: go for supermarket own-brand.

You’ll always find people that claim to be able to taste a great difference between branded and supermarket own groceries. But in most cases, the biggest difference is in price.

The staples on your shopping list, like eggs, flour, oats, spices, can cost anything from 60p to over £1 more when you go for the branded version.
Take a look at the items you regularly put in your basket to see if you could do with a brand change. It may seem like it’s nothing big at first. But, by the end of the year, those small decisions will have turned into big savings!

There you have it! Those are just a few ways to save some cash in 2022. Of course, this isn’t an exhaustive list, and there are plenty more challenges and ideas out there, so do your own research too. Remember though, some ideas won’t suit everyone. Make sure you consider your full personal and financial circumstances. And if you’re in doubt, speak to a financial advisor.

Are financial advisors worth it?

  • Sometimes, ordering through a restaurant’s actual website can bring the overall cost down, since you’re not getting stung with platform charges.
  • If you’re getting hit with delivery charges, you can often arrange to pick your order up yourself. Chances are, you’ll even get your meal faster this way.

Let’s start with the basics. What are you saving for? And how much will it cost? Write both down - because you’re 42% more likely to achieve a goal you’ve written down than one rattling around in your brain. And you’re even more likely to reach that figure if you keep track of your progress.

So consider the difference…

  • Option one: thinking “I will buy my first home in five years” in your head.
  • Option two: writing down “I will save £30,000 for a home deposit, within five years” and then tracking your progress each month. The research says option two is way more likely to succeed. So do that!

You’ve now set yourself up for success - just by writing down a number.

Let’s say your target is to save for something big. We’ll stick with £30,000 for a house deposit for now.

Looking at that total is like standing at the foot of Everest, wondering how you’ll ever get to the top. It’s going to seem like an enormous climb. So start breaking it down. Don’t think “£30,000.” You don’t need to - you’ve already written it down. Instead, think “£116 a week”.

Now, think even smaller - because you don’t need to save £116 from this week. Take it easier at first - focus on getting into good saving habits that will stick. So maybe this week, you just save £50. And then £65 the week after. And then get yourself up to £125 gradually to account for the difference.

If you’re lucky enough to be buying a home with someone else, maybe you can split those figures between you. So now, you can conquer your savings Everest together - one small step at a time.

You might have heard the saying “pay yourself first.” This should probably be “save first,” if it were more accurate. Here’s what it means…

Most people get paid straight into a current account. They pay their bills first, which is smart. But then they go about their lives, ordering takeaway, going to the cinema, going on family trips…

It’s only after all that money’s spent that the leftovers get saved - if there is anything left at all.

So if that sounds like you, it's time to flip your thinking on its head. Paying yourself first means paying 20% of your income into an account you don’t touch - ideally, one with a good interest rate.

Your expenses should add up to no more than 50% of your income. So you should be able to set up direct debits for your bills without missing the money. “Paying yourself first” uses the same approach but for savings…

Set up a standing order from your current account to a linked savings account - for around 20% of your paycheck. Set it for a couple of days after your usual payday.

If that 20% isn’t enough to hit that savings goal, go back to step one.

Your options are:

  1. Work out how to spend less on expenses
  2. Work out how to generate extra income

Don’t give up on your savings goal until you’ve had a good look at both.

What you do next with that 20% in savings could be a game-changer - depending on your risk appetite…

Thanks to the magic of compound returns, you don’t have to save every penny of that £30,000 yourself. The trick is to put your money somewhere that pays you compound returns - like an account with a healthy interest rate.

However, interest rates on savings accounts are currently low - generally, lower than inflation. They’re especially low if you don’t want to lock your money away in term deposit accounts. So even if you get a generous 2.5% interest, your money’s still losing 2.5% of its value if inflation is 5%. However, it’s still far, far better than getting 0.1%, or even 0%. So finding a bank account with the best interest rate possible is a great place to start!

Let’s go back to that £116 per week that will get you £30,000 after five years. With an interest rate of 2.5%, that comes down to just £108.

This is the beauty of “compound returns,” or in this case, “compound interest” - because your returns are coming from an interest rate.

It’s the effect of earning returns on your returns. And time is the key factor.

Let’s use a different example. Say you invest £1,000 and it returns exactly 10% every year for five years. After the first year, you’ve made an extra £100. So now you have £1,100. The following year, you’re not making 10% on £1,000 - you’re making 10% on £1,100. So that’s £1,210. That continues until you have £1,645 after five years. That’s a 64.5% return on your investment.

But we know 10% isn’t achievable from high street bank savings accounts. So what about investing?

In general, investing can be a great way to get a decent return on your money. The figure often quoted is around 7% to 8%. That’s based on the average return of the S&P500 - a share index used to gauge the market’s general health.

However, that’s an average. In some years, returns have been way higher than 8%. In others, far lower. In 2008, for example, the return was -38.49%

So time is key. If you put £1,000 into stocks & shares today, and the market fell by 20% over the year, what then?

If your saving plan stops at five years, this might not be enough time to balance out any losses and make a good return. On the flip side, what if the yearly return was 26.89%, like it was in 2021?

So remember that average - the longer you invest for, the closer you’ll get to that average 7 to 8%. If you did hit that average over five years, you’d only need to put away £95 a week to hit £30,000. But the market determines what that average will be - it could be far higher over the next five years. It could be far lower. So think hard about the risk involved before investing.

Best beginner investment funds for 2022

So, there are a few different options for hitting your five-year plan. Maybe you could keep some in savings and invest some of the rest? It all comes down to deciding what’s best for you - and what you’re comfortable with.

And remember, this is not an exhaustive list. There may be other options on the market that we haven’t covered here. So as always, do your own research. Consider your full personal and financial circumstances. And if you’re ever in doubt, speak to a financial advisor.

It’s important to remember that the taxman really isn’t trying to cheat you. In fact, even if you’ve missed out on making a tax refund claim before, you could still get back what you’re owed from previous years. Under HMRC’s rules, you can make a claim based on your work expenses for up to 4-years back. Anything you’re still owed after the deadline expires is gone for good, though. There’s a limit to the taxman’s patience.