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Medical emergencies and how savings could be used towards medical expenses

“Change is always tough. Even for those who see themselves as agents of change, the process of starting a new thing can cause times of disorientation, uncertainty and insecurity. – Joyce Meyer/em>

Medical emergencies can occur without a moment’s notice. However, the UK has an NHS health system which provides free medical care to most UK residents, which means that most people will receive treatment for several diseases and conditions through the NHS. However, there are instances that the NHS cannot provide free treatments as they can be quite expensive; they also may refuse to send patients for vital examinations as they determine that the patient does not need one, which can sometimes lead to costly mistakes.

Therefore, when treatments or exams are not possible through the NHS, many seek alternatives such as private medical care. There are a significant number of people who have had experiences that have left them with the perspective that the NHS is increasingly failing to meet the medical demand through an adequate level of care. According to the Guardian, people feel like this because of long waiting times for GP and hospital appointments, staff deficiencies and lack of funding by the government. However, just 25% are of the perspective that the NHS should receive further funding. Supporters of Labour and Tory largely favour NHS founding standards, with 94% wanting the NHS to continue to be free for everyone and 86% wanting funding through taxes.

Moreover, in the UK, the number of people waiting for hospital treatment has increased to 6.5 million. A pattern emerged between 2012 and 2019 of the waiting lists constantly rising; however, from early 2021, this raised more rapidly. There was an 18-week aim for treatment, but unfortunately, this target has been missed since 2016.

In addition, the number of A&E visits since 2012 has surpassed pre-pandemic levels. Waiting times of over 4 hours also increased between 2015 and 2020. In March 2022, a record 41.3% rise was recorded.

Private Health Care Insurance

Private medical insurance covers, part or all medical expenses if you seek private treatment. Health care also enables people to choose how much care they want and when they require treatment.

People who prefer not to use the NHS can find it quite costly to seek private treatment, particularly for severe illnesses.

Advantages of Private Healthcare Insurance

Private health care gives you access to specialist     referrals; your GP can make a referral to a private specialist for you to     receive a second opinion or treatment.

Request the scans you want; for instance, if the NHS     delays a scan or says you do not need one, the coverage you get from     paying for health care can be used towards it.

The waiting time for NHS treatments can take a while as     the demand for NHS treatment is high. The insurance can be used to lessen     your waiting time for treatment if the waiting period is more than six     weeks with the NHS.

You choose the physician and hospital to suit your     requirements which cannot be done through the NHS

There is a higher possibility of getting a private room     than an open ward with both men and women.

 Some treatments are not available under the NHS for     free as they are too costly or not authorised by the National Institute     for Health and Clinical Excellence in England and Wales (NICE) or the     Scottish Medicines Consortium (SMC).

Physiotherapy sessions are given faster if you have     insurance than through NHS treatment.

Disadvantages of private healthcare Insurance

The NHS might give you better treatment for severe     diseases such as cancer, heart disease or stroke and is likely to     prioritise treatment for people with these conditions. Private healthcare     insurance does not always cover more severe illnesses, whereas NHS covers     many diseases for free.

Private medical insurance is costly, and the price will     continue to increase. An average family premium (two adults with two kids     under 10) can range from £700 to £1,800 per year. Premiums increase each     year as you get older, which means when you are no longer a spring chicken     and are elderly and might require more hospital treatment due to more     illnesses attributed by factors such as old age, it might not be     affordable for you.

Diseases which are chronic in nature are generally not     covered. The majority of fees do not include coverage for incurable     illnesses such as diabetes and certain cancers.

Private health insurances do not typically cover     pre-existing conditions. Some health insurance providers may allow you to     add this to the policy, which will increase the price of coverage further.

There is no guarantee that treatment options will be     accessible locally. Therefore, if you pick a policy with an approved list     of experts and hospitals, this may not include your preferred consultant     or suitable location for your treatment.

Alternative options to having Private health care:

Depending on your financial capacity, you may want to use savings to pay for all or part of your medical care; roughly one in five private patients are doing this. Hip and knee replacements are typically £10,000 each, and MRI scans range from £500. Though you can try to find lower prices and ask your GP to assist you with this.

You can also pay for a private appointment if you are not convinced by your doctor’s diagnosis and want a second opinion. After that, your consultant may refer you to NHS if further treatment is required.

Why Saving money for medical emergencies is essential?

Building an emergency fund is vital as sometimes medical emergencies can pop out of the blue; even whilst you are on holiday, letting your hair down, the unexpected medical problem could prop up.

A substantial number of people in the UK go abroad each year for holidays; 23.8 million trips were made abroad in 2020, 74% less than in 2019 because of the coronavirus pandemic. In 2020, UK residents spent £13.8 billion abroad; this was 78% less than in 2019.

If a medical emergency happens while you are on holiday and you have saved, this can be used towards the cost of medical treatment abroad or emergency return flights.

The recommended savings account is an instant access account, covering a minimum of three months’ worth of expenses to save for potential emergencies. If your income is reduced because you are made redundant or suffer a medical emergency such as an injury, you will have a few savings to rely on if things get tight.

However, it is crucial to ensure you are financially prepared to put money in a savings account before taking the plunge.

Clear up anything that may be outstanding such as:

Debt attributed to Credit card

Unauthorised overdraft

Pay-day loans

Outstanding mortgage repayments

Door-door lending or home credit

Long term, it may be less expensive to pay any of the above off before opening an emergency saving account; however, if you are not missing mortgage repayments or any other form of credit you have is low-cost, short term or well-managed, making this part of your emergency fund may be worthwhile.

Although medical treatment can be quite costly and having savings may not be enough to cover the total cost of treatment, even if you still need to set up a funding page, if you have saved some money, you will not be entirely reliant on donations from and will be able to reach the needed amount quicker. Savings are also advantageous to get a second opinion. In addition, saving money for emergencies such as medical crises can also be beneficial if doctors from NHS are refusing to do the necessary exams you are asking for because they want to save money; if you have savings or private healthcare, you could use this towards paying for a medical exam.

On the one hand, private healthcare can cost an arm and a leg and does not usually cover chronic diseases.

On the other hand, savings can provide a financial cushion to pay for medical exams and go towards treatments unavailable through the NHS.

Nevertheless, the NHS is still an invaluable healthcare system as, without it, many would have no access to medical care, like in countries like America, where people need insurance to receive medical treatment. Ideally, private healthcare or savings would be accessed in cases where the NHS cannot provide the treatment required because the treatment is too expensive or because they are refusing to carry out specific exams such as MRIs.

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State Pension age hiking - Is it worth relying on state pensions?

State pensions are regular payments paid weekly from the government when someone reaches the State Pension age. The amount of state pension you receive and the qualifying number of years you need to have of national insurance payments will depend on the year you were born. Moreover, the qualifying amount you receive will depend on factors such as how much you contributed in national insurance payments, including contributions you made whilst in employment and contributions credited when you were unable to work.

The current State pension age in the UK is 66 for both men and women. It will increase to 67 by 2028 and 68 between 2044 and 2046.

However, speculation has arisen about the state pension increasing to 68 earlier than anticipated, though this has not been confirmed.

Female workers have voiced their concerns about the rise in state pension age as they cautioned about the physical strain of working till later in life and the impact this will have on millions of people who have to work until 68.

Reports were denounced by campaigners on retirement age possibly rising to 68 as soon as 2035, stating that it is “completely wrong“ for the government to impose this on people, for them to “work until they drop”, according to the Independent.

There are many pensions for people to choose from state to private pensions, although there is usually an eligibility criterion that people must meet to receive one of these pensions. Individuals typically consider their pension options whilst in employment, as employers and recruitment agencies usually recommend pensions to employees so that they can start making contributions and preparing for retirement in advance to increase their chances of getting a decent retirement fund.

How much State pension will I receive?

The quantity of state pension you receive will differ according to your circumstances and when you became eligible for the state pension.

New State Pension

The new full state pension is £185.15 per week. There are circumstances where you may receive a higher amount, such as exceeding a specific amount of Additional State Pension or delaying receiving your state pension.

Eligibility for New State Pension

The new state pension is for men born on or after 6th April 1951 or women born on or after 6th April 1953.

National insurance record

There is usually a requirement for persons to have a minimum of 10 qualifying years on their national Insurance record to receive any state pension. However, it is not required to be ten years in a row.

One or more of the below points must apply to you:

·         You paid National Insurance contributions whilst in employment

·         You received National Insurance credits, for instance, if you were not working, sick or a parent or carer

·         You paid voluntary National Insurance contributions

Even if you lived or worked aboard, you may still be entitled to the new state pension.

If you paid married women’s or widow's reduced rate contributions, you might also be eligible

Basic State Pension

The basic state payment is £141.85 a week for 2022-23. This applies to anyone who reached state pension age before 6th April 2016.

The basic state pension will increase by 10.1% in 2023-24 to £156.20 weekly. However, a substantial amount of people receive more than the basic state pension because they have also stocked up on additional state pension, which is centred around earnings made during your working life.

Eligibility for basic State Pension

To qualify for the basic State Pension, you will generally need 30 qualifying years of National Insurance contributions or credits to get the basic State Pension.

If your qualifying year's amount to less than 30 years, your basic State pension will be lower than £141.85 per week. However, you may be able to increase your eligibility amount by paying voluntary national insurance contributions.

How could you boost your basic state pension?

There are cases where you will not be eligible for the entire sum of money, which is currently £141.85 per week.

It is recommended that you seek financial advice while planning your retirement income.

Delay your state pension

If a state pension is deferred, your payments can increase once you claim. Deferring your pension for five weeks simultaneously boosts your pension by 1%.

The extra state pension can be paid to you in a payment form of your choosing, either through increased weekly payments or a one-off payment if you delay your payments for 12 months.

There are also other ways of increasing your pension.

If you have a spouse or are in a civil partnership, you could be eligible to improve your basic pension to a maximum of £85 a week if you are getting below this rate. You could also meet the criteria for an Additional State Pension, or pension credit may be a viable option if you have a low salary.

Is it worth relying on a state pension?

The conditions and types of pensions change, especially regarding the state pension; therefore, it is best not to rely solely on a state pension. The best thing to do is to have a second income stream for your pension fund, such as a savings account like Lifetime ISA, which can be used to save for retirement and accessed once you reach the age of 60.

In addition, looking into other pensions, you might be eligible for is also a good step forward, as you might find another pension that is as good a fit.

Times is of the essence, which means that although retirement could be far away it is still best to set up a retirement plan as early as possible though which route you choose to follow when it comes to your retirement fund is entirely your choice; however, it is worth having a plan B in case plan A does not go according to plan.

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Smart saving account application | Intellisaving

IntelliSaving is a smart saving application that aims to bring all the saving or interest-bearing accounts together for you on a single platform. With our Portfolio Management feature, we cater our clients with the personal portfolio management services for all their saving needs as well as to help them match investments to objectives which eventually balances the risks against performance.

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Best app for finance management |Intellisaving

IntelliSaving is a smart saving application that aims to bring all the saving or interest-bearing accounts together for you on a single platform. With our Portfolio Management feature, we cater our clients with the personal portfolio management services for all their saving needs as well as to help them match investments to objectives which eventually balances the risks against performance.

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App for Saving

IntelliSaving is a smart saving application that aims to bring all the saving or interest-bearing accounts together for you on a single platform. With our Portfolio Management feature, we cater our clients with the personal portfolio management services for all their saving needs as well as to help them match investments to objectives which eventually balances the risks against performance.

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My dreams of travelling are so vivid that sometimes I am tricked into believing I am experiencing those dreams till I wake up and realise that I am at home and it's time to wake up for work. And spend the first part of my everyday routine contemplating my dream

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5 habits of a successful Saver

“We should remember that good fortune often happens when opportunity meets with preparation.” - Thomas A. Edilson

The road to achieving something in life is never easy; however, with persistence and hard work, most aspirations can be achieved, including being a successful saver. The UK’s relationship with saving improved during the lockdowns but then retook a turn for the worse when the cost-of-living crisis worsened, and prices skyrocketed. Currently, the inflation rate is 11.1% which is a 40-year high and is 11.1%. However, the Bank of England anticipates that the inflation rate will decrease drastically in mid-2023. The BoE has this perspective because of the monthly cap on energy bills for both households and businesses that the government introduced, which means that the energy cost will not increase as quickly as it has.

Another reason they expect inflation to fall is that the cost of imported supplies will not increase as rapidly because some of the challenges businesses have faced have begun to ease. The final reason is that they expect a reduced need for goods and services in the UK, which would mean that the cost of many things would not increase as fast as they have.

However, regardless of the current financial situation, it is crucial to be able to save what you can because if you lose a vital source of income or your income can not keep up with the speed of inflation, you will have savings to turn to in cases of emergencies as some salaries are failing to keep up with inflation rates.

1. Set up a budget

The first step in managing your finances is a budget; although it can be a little time-consuming, it is a worthwhile investment of your time to get a better picture of your finances.

Setting up a budget can decrease the likelihood of ending up in debt and increase the chances of being more prepared for unexpected expenses, improving the probability of a good credit score and being approved for a mortgage or loan. You will also be able to see where you can save money and be more likely to save for holidays and a mortgage on a home.

What will be needed?

Before starting a budget plan, you will need to calculate the amount you spend on household bills, other living costs, financial products such as insurance, bank charges or interest, and any money spent on family and friends such as lending money or purchase of gifts or travelling to events such as hen trips, forms of transport such as car expenses such as fuel tests, leisure, including gym membership, hobbies, cinema and other entertainment. The current financial climate where the cost of living is causing many people to be at their wit’s end.

2. Set money aside for savings

Once you have set up your budget, make room for saving by setting up automatic direct transfers from your current account to your savings account every month. Even if you would like to save for a specific goal, it is still worth having an emergency saving pot, especially in the current financial climate where the cost of living is causing many people to be at their wit’s end.

3. Saving Strategy

o Trust your gut feeling when it comes to investments

Sometimes the gut feeling you have can tell you things that may help you avoid getting into a financial conundrum; for instance, if you want to make a risky investment but something is holding you back, that may be your gut telling you that it is not the right time to invest or not the correct type of investment for you to devote some of your money.

If you are thinking of ignoring your gut feeling, research the investment you would be investing in, such as the credibility of the investment, success rate, other people’s experiences, and whether their business is registered and still active. And think about how you heard about this investment. Is it from a reliable source?

o Trust your gut feeling when it comes to avoiding taking out extra debt

If you are thinking of taking out a mortgage or accumulating another type of debt, but you get a bad feeling, this could be your intuition telling you not to add to your debt load at this time.

However, if you’re still in doubt about what to do, look at your finances, such as a budget or financial plan that will give you a clearer picture of your finances and whether you have room to add another debt.

o Trust your intuition when it comes to joint saving accounts or other forms of saving

If you are considering embarking on a joint venture such as a joint saving account or joint mortgage, it is a good idea to weigh the advantages and disadvantages before taking the plunge because if your partner falls through with payments, you will also be held accountable as your name would be part of this financial agreement. Even if you split up or divorce, it remains your responsibility to hold the fort if your partner does not keep up with payments and vice versa. Therefore, if you get a knot in your stomach from taking such a risk, then avoiding this sort of joint venture is best.

Or if you are thinking of helping out a friend or family by becoming a co-signer, it is crucial to consider the risks as this is a risky responsibility to account for if the borrower cannot make the repayments on loan such as a mortgage, as you may have to step in and make the payments yourself.

o Be in control - of your spending and don't fantasise about your budget

Make sure you have a budget plan in place so that you do not dream of a budget that may not reflect your actual finances.

o Build your emergency fund through a low-spend week or month

Build up your emergency fund by doing a low-spend week or month; spending a minimum amount means spending only on essentials which does not include takeaways, coffees, or drinks with friends. A month like January, when people usually feel the financial blues after Christmas and are not as likely to go out, is a good month to pick.

o Avoid splurging out on significant expenses or lots of little expenses

The temptation to overspend is something that remains even during unstable economic times; it can be tempting to spend on things that are not needed, especially if feeling stressed. But it is crucial to shift the focus elsewhere to other healthier habits, such as learning budget-friendly recipes or learning a new skill for free on YouTube.

4. Research - best options to save on

o Read articles on reputable sources such as Intellisaving

Conduct your research by reading articles on saving and budgeting; for instance, Intellisaving has several articles covering these areas, such as ‘How to manage a household on a budget?’ and ‘Is saving really outdated’.

o Research on Google

There are many reputable websites with tips and information on finance areas.

o Check the government site for schemes or discounts

Check the government site for what you may be eligible for in the form of schemes or discounts to see if you could have extra money coming in. If you are eligible for a scheme set up by the government, you can use the extra money towards your savings.

For instance, the government has schemes such as giving workers on low salaries who receive universal credit or working tax credit a savings bonus. They pay a 50% bonus over what is saved, up to a threshold of £1,200 over four years. If you are unemployed, redundant, or not working because of illness or on a low salary, which includes being self-employed, you could qualify for the help to save scheme.

The government also chips in for Lifetime ISA (LISA) is available to anyone aged between 18 and 39; a maximum of £4,000 a year can be saved into this account, either through a lump sum or deposit in cash. The government pays a 25% dividend in addition to what you pay. For instance, if you save £1,000, this will add up to £1,250, or if you save the entire £4,000 amount, you will have £5,000.

If you are a first-time buyer, you may use the money and bonus towards a deposit for any residential property amounting to a maximum of £45,000 once the LISA reaches 12 months. This type of account has dual use as it can be used for retirement though it is essential to be wary as saving into a pension has more chance of being more profitable.

5. Revise - saving strategy from time to time

A saving strategy should be revised from time to time as a saving method that worked well in the past may not be the best saving strategy to continue using in the future.

o Save first, spend later

The save first, spend later strategy is often recommended as you pay yourself first through manual or automatic transfers from your current account to your saving account, which usually increases the chances of saving as whatever is left over after saving is then used towards essentials and other expenses.

o Common budgeting rule when wanting to save

A common budgeting rule often recommended is the 50/30/20 rule; this method may be efficient for some people who want to save.

50% of your income should be your most needed expenses, such as household bills/mortgage payments/childcare and other unavoidable and regular expenses.

30% for wants, such as clothes and holidays or any other desirable expense you have.

20% for savings. This technique may be widely known but may not be the most efficient for everyone. So, you need to evaluate your personal circumstances and devise the best budgeting strategy, and as mentioned before, it is always good to have a realistic budgeting strategy than a fantasy one.

o Multiple account budget

You can also budget for saving by setting up multiple bank accounts; this is easier to do with online banks and assigning them tasks that share similarities with the 50/30/20 rule. One account can be for essentials such as housing costs, another for savings and another for things you want to buy or do. By setting up regular transfers from the main current account to other accounts, you will be able to save and budget without having to stress the process too much.

The journey to being a successful saver may not be straightforward as it can seem daunting for several reasons such as not knowing how to start saving or finding it difficult to be consistent with saving but know that you are not alone. Everyone had to start from somewhere to get to a point where they became a successful saver.

Furthermore, once the act of saving is grasped, it becomes a worthwhile investment of time and money. This is because savings have helped many people get through difficult times and helped them reach their most dear aspirations.

Moreover, as mentioned earlier, plenty of information is available from reliable sources such as Intellisaving, which is jam-packed with helpful information and recommendations. Intellisaving has an article for all sorts of circumstances, from articles for single parents to those entering retirement.

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Life revolves around making decisions about every aspect of life, from what food to eat, where to go on holiday, where to study, what career to pursue, and other decisions such as financial decisions. Deciding on the best saving account to open, based on your saving needs, is yet another decision that many make. According to the Bank of England’s findings, approximately more than £200bn was deposited into saving accounts since 2020s lockdowns. However, the cost of living has become more expensive through the rise in inflation, which can have a detrimental effect on several different aspects of life, such as an increase in rent, food, transport, and how much interest you make in your savings. For instance, an increase in inflation has a negative effect on interest rates, as money will decrease in value when you withdraw compared to when you first deposited the money into the account.

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The mid Jan blues are not uncommon and it hits almost everbody. The key to survive is consistency and determination to keep going !

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How Mental health has deteriorated in the current financial situation

“I am bent, but not broken. I am scarred, but not disfigured. I am sad, but not hopeless. I am tired, but not powerless. I am angry, but not bitter. I am depressed, but not giving up.” — Unknown

The cost-of-living crisis is wreaking havoc on individuals’ finances, causing mental health to deteriorate as people are concerned with how they will make ends meet and have no choice but to cut back on activities that positively impact them their mental health and therapy sessions. According to a BACP article, a survey carried out on 2,983 of their members revealed that 66% of therapists state that the cost of living significantly impacts mental health.

The findings of the survey also revealed that six in 10 (61%) therapists reported that their clients are concerned about whether they will be able to cover the costs of bills. The research also outlines some of the mental health problems which have been aggravated by the increased cost of living calamity, such as insomnia, in which 52% of therapists stated that clients were having sleepless nights because of financial woes.

The study also uncovered that 49% of clients say they are making cutbacks on activities that increase their mental well-being such as gym and sports club memberships. In addition, 60% of therapists have noted that clients are also cutting back costs on therapy sessions because of money concerns and 47% of therapists have revealed that clients are cutting back by cancelling or pausing sessions because of a continuous strain on their finances.

The money and mental health policy institute also surveyed nearly 300 members within the Research Community. In January 2022, the effect of increasing energy expenses was explored through a thorough assessment. Most partakers in the survey said that they made amendments to their daily living arrangements because of the rising energy expenses, and 81% said they trimmed down their energy usage.

A further survey was conducted in May with inflation continuing to rise and energy costs continuing to mount, the impact on people’s finances was further tightened and found that 46% of respondents had deducted the number of meals they ate a day. And 20% had failed to maintain payments for a bill.

Research has also shown that among those struggling the most the households with the lowest salaries are struggling to keep afloat the most because of the cost-of-living crisis, as 7.2 million are unable to afford even essentials and 4.7 million are unable to keep up with bills. Because of this 2.9 million households have found themselves at their wit’s end and turned to high-cost credit loans, including loan sharks, payday lenders, doorstep lenders, or pawn shops, half of which are in arrears.

In addition, 75% of households earning less than £26,570 are going without crucial necessities such as food and toiletries. Figures also showed that more than seven million households are going hungry by reducing meal sizes, skipping meals altogether, or not showering and using inadequate clothing.

Around 4.7 million are in arrears with a minimum of 1 household expense, which is a staggering increase compared to before the pandemic, which is almost three times higher now, plus the typical level of debt continues to be more than £1,600.

On the other hand, research conducted by the Office for National Statistics (ONS) explored the impact Covid-19 had on mental health, finances and everyday life, and found that people were still being negatively impacted by the COVID-19 pandemic in the run-up to April 2021, for instance, those who were self-employed were three times more likely to state that they had seen a deduction in salary and were also twice as more likely to rely on savings to pay for essentials compared to employees.

ONS also found that individuals within the lowest salary bracket, which is up to £10,000 per year, were more likely to state the challenging impacts this had on personal well-being compared to those in higher pay brackets, such as the pandemic amplifying their mental health (18%) and 32% reporting feelings of stress and anxiety.

In addition, individuals in the highest income brackets paid up to a maximum of £40,000 or more, were still more likely to report that the coronavirus pandemic had a damaging effect on their work, this group was also 6 times more likely to state that the pandemic had caused a deterioration in their professional relationships with colleagues, and those employed were two times more likely to find working remotely a challenge than individuals in the lower salary pay bracket.

The findings also unveiled that parents who were employed were less likely to be laid off since the start of 2021, which was not the case during the first phase of the lockdown, however, employed parents were more likely to reveal a reduced salary than those who were not parents, however despite the financial constraints parents sustained a verdict of feeling less lonely and reported better scores of feeling that they were conducting a worthwhile life.

Moreover, a consistent pattern emerged among those aged under 30 revealing that their wages had decreased in payment (15%) and those aged over 60 years (5%); nevertheless, there was a higher percentage of those under 30 years who stated they could save for the year ahead (50%) compared to older age groups (39%).

The perspectives on salaries and saving also seemed to vary; for instance, individuals with the youngest age group were not as financially robust as older groups, as 47% of those under 30 revealed they could pay for unforeseen expenses compared to 71% of those aged 60 and over, although more of the under 30s reported being able to save for the upcoming year.

The research conducted by ONS and other organisations such as BACP all found a significant link between mental health and financial constraints; people have been greatly impacted on an economic and emotional level. The fact that people must go without food, essentials and other activities that benefit their mental health because of financial limitations is deeply concerning as all these factors put a bigger strain on people’s well-being.

Although the government has introduced schemes such as an Energy support scheme for most households to help with rising energy costs, this is a temporary solution expected to be in effect until March 2023. The government also introduced the energy price guarantee which limits the amount suppliers can charge their suppliers until March 2023. However, despite the support available, many households still struggle to make ends meet.

The money and policy institute proposed that the government introduce measures such as making Universal Credit and other support schemes easier to access. And permitting recipients of benefits to seeking support from friends or family to manage their benefits.

They also propose that firms are more considerate when sending letters, emails and phone calls to those in debt by being more supportive. They also believe that regulators should be held responsible when taking the steps mentioned and impose severe penalties on companies that disregard vulnerable customers.

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How to save money while renovating your home?

“Renovating: a process in which we tear down the walls of our comfort and rebuild to become better, stronger, and more beautiful than we were before”- Unknown

The cost of living has come at a high cost from every angle including higher mortgage rates which have been impacted by soaring inflation and the Bank of England increasing the bank rate to try to slow down the inflation rate. The increases in interest rate from the Bank of England is impacting mortgages because borrowing has become more high-priced. For instance, those who have a floating mortgage with rates bound to the Bank rate are likely to notice monthly payment increases.

According to the banking and finance sector representative for UK Finance, the typical rise for those on tracker mortgages will be £73.49 monthly and for those on standard variable rate (SVR) mortgages, it will be £46.22 a month.

Moreover, mortgage holders looking for new fixed-rate agreements are still likely to pay 6% more now for two and five-year deals because of the mini-budget upheaval where fixed-rate deals rose in price.

Therefore, experts have advised mortgage holders not to fix their rates, because of the ongoing interest rate insecurity and the cost-of-living crisis being worsened by this and other contributors such as the mini-budget which went belly up.

In addition, the typical household cost surged by 9.6% in the past year and has reached a colossal figure of £24,000 more than in 2021. Because of this many people are preferring to refurbish their current home instead of relocating to another humble abode.

Nevertheless, revamping your homely nest can still cost an arm and a leg though there are ways to save a pretty penny with the tips and advice section we have put together below.

How to save money and do property renovation?

Set     a budget

Setting up a budget is a useful way of keeping a lid on finances to stop them from getting out of control, as you will have a better idea of how much you can afford to put aside for renovations.

How to do this:

Write a list of what you want to renovate and once this is done ask for a written quote instead of an estimate.

What is the difference between a quotation and an estimate?

 A      quotation is a fixed price agreed set by the tradesperson and agreed upon      by the customer before going ahead with any work on a property

 An      estimate on the other hand is an approximate value which could change by      the time the work is completed

Comparing tradespeople, having at least three different quotes, and searching for reviews from other customers is important as well as a good way of increasing the likelihood that you would be getting good value for money.

Once you have picked a tradesperson, ask for a written agreement that has the agreed costs. If the tradesperson says more work will need to be done after the job has commenced, ask for a written estimate and an updated costed contract. It is crucial to do this before any additional work is agreed upon and started.

Do     some of the work yourself if possible

Try to cut down construction costs by asking your contractor if the cost can be reduced if you prep the space for the builders in the morning, clean the waste left from construction, or do the demolition yourself.

Many people can do DIY interior painting, tile a backsplash and do other minimal duties. You can learn how to do DIY tasks that are more difficult in nature such as the installation of floors through online videos, home development stores and community colleges or adult schools

However, be mindful of which DIY tasks you put yourself forward to do as some jobs require a licensed contractor, for instance, complicated plumbing and electrical work because they could be hazardous, and you could injure yourself or cause damage to your property. Therefore, try not to overexert yourself beyond what is practical for you to do or you might have to pay someone to redo the work.

Search     for bargains

Generally, contractors purchase materials for your revamp from their suppliers. However, if you don’t mind doing extra legwork, you could search for bargains and buy the material to save money.

Saving on the restoration of the materials can be done by keeping an eye out for sales, buying floor models of cabinets or appliances, and looking for minor scrapes such as discolouration or dents.

Obtain     permits

If you are planning on going big with significant renovations such as home extensions or new construction, electrical, mechanical, and plumbing adjustments, you could need a permission form from the planning and building control departments within your local council.

Although obtaining a permit is not free, this could come at a higher price if you do not get a permit.

If you do not have the required permit, you may be obliged to demolish the work you did and pay penalties before redoing any work. Constructions or developments which have not been permitted may result in your house selling for less than your initial asking price, once you decide to set up roots elsewhere. The permit procedure can be managed by contractors, however doing this, yourself is likely to save you money.

Reuse     materials

Hardware

Hardware such as ‘doorknobs, light fixtures, drawer handles, bathroom rods’ and other hardware types are usually reusable when not in more than one piece. Some of the hardware could be used towards future renovation projects.

Natural wood

Natural wood is both recyclable and relatively straightforward to reuse. Leftover wood can be used for other restoration ventures or can be used to make furniture and other small-scale constructs. For example, if you have a leftover wooden plank, this can be remoulded into a wooden bench or if split into smaller parts can be used for a pergola.

Don’t dismiss pieces of wood which seem insignificant as these could be used for decorative pieces such as small shelves, candle holders, picture frames and decorative wall panels.

Do     your own painting

Repainting a home does not require you to be a professional at the craft, many people repaint their own homes to save money there are YouTube tutorials on how to paint a home such as a room. And you could also ask the staff at a DIY store for some tips on the best paint to buy and how to start.

One way of giving a new leash of life in your house is to paint the cabinets in your kitchen at a reduced cost.

Refinish     floors

Refinishing your floor instead of replacing it is an efficient way to makeover your floor while saving money. Discussing this option with your chosen tradesperson or with another construction specialist to get some advice on refinishing your floor would be a great step.

Renovate     your house gradually

There may be the temptation to tick every item off your reconstruction list, however, it is best to start gradually by starting with the most important and affordable tasks first. This also gives you more time to make a more thorough plan and secure the best deals as you focus on fewer renovation tasks at one time.

Amazon     warehouse

Amazon warehouse sells previously opened products that may come at a bargain; however, it does come with some risk Amazon do categorize the condition of these products to make it easier for you to choose a product. Amazon warehouse is a good place to look for kitchen appliances and furniture.

Keep     your distance from plumbing

Plumbing can come costly, for instance, if you move a sink or toilet which would require re-routing water lines through the property this would affect plumbing, on top of that there is also the extra cost of tearing parts of a hose to route pipes, so it is best to make the most of what is already available to you.

Download     the saving app

Intellisaving is an innovative saving app designed with savers in mind, the platform facilitates the integration of multiple saving and ISA accounts. The features range from a personalised dashboard used to navigate users to different screens, a personalised portfolio for users to access a summary of their finances, a comparison feature to compare the best saving rates being offered by banks and building institutes and a watchlist to add saving products of interest during a comparison search on the app.

Have     a saving account just for home renovations

The cost of living crisis has spiralled out of control due to substantial increases in costs however, if you can afford to do so have a saving account just for home renovations if you can afford to do so that way what you deposit into the account can be used towards the costs of the renovations once you have enough money for reconstruction, also having a saving account for this purpose also means that you are more likely to be able to afford to pay for any additional work that may be required.

The cost-of-living crisis could worsen in 2023 or it could start to show signs of recovery at some point in the year, if things get worse and the Bank of England continue to increase interest rates mortgage rates will continue to be higher than usual and people wanting to buy a home will be deterred further from buying a house in the unstable economic climate.

However, if things improve and mortgage rates stabilise more people will want to purchase homes.

Nevertheless, renovating rather than relocating is also something worth considering as there are many ways of saving money whilst redecorating and if you revamp your home and decide to sell it when the financial climate improves you may sell your house for more and at the same time will be able to enjoy some of the fruits of your homely makeover while you live in your current home.

In addition, those who rent can also do a home makeover such as painting and adding some new and recycled pieces, instead of purchasing a house during the financial crisis. And should speak to their local authority to find out what building works they can do as a tenant of a rented property.

[srvrishabh]

Every month I face the same struggle of where to place the new items I have splurged on. I get exhausted from my excessive spending as I spend hours squeezing my new and not-so-new possessions together.

[srvrishabh]