Christmas makes many Brits think about financial priorities

With Christmas fast approaching and many people increasingly concerned about how they will make their money stretch, how to ensure the same doesn't happen next year has become a hot topic.

Defaqto has issued its top tips to make the most of savings in 2012, be it finding the best savings interest rates or using tax relief.

David Black, Defaqto's insight analyst for banking, urged people to make the most of their Isa allowance by investing as much as they can afford and doing so at the beginning of the tax year.

He added that shopping around for the best savings interest rates is worthwhile as some offer returns of 0.10 per cent while some can go up to 4.50 per cent.

This is an important piece of advice to consider for all financial products, he said, as sticking with the same account year after year is rarely the best way to save.

"If you have outstanding debts then, if you are in a position to do so, think about using some of your savings to pay them off. The interest rates that are charged on store cards, credit cards, unsecured loans and overdrafts will generally be very much higher than you can earn on your savings account," Mr Black explained.

Lastly he warned Brits to look out for withdrawal restrictions, as the best savings rates often only allow so much to be withdrawn without notice or carry penalties.

However, as far as this year is concerned, Credit Action has urged consumers to spend within their means this Christmas.

Chief executive Michelle Highman said that setting a budget and avoiding unnessary expenditure allows people to enjoy the celebrations without worrying about debt.

"We all need to be careful as we start the run up to Christmas," she explained.

Moneyextra.com recommends you take independent financial advice before acting on any article

Back

2011-12-05 15:05:45 © Moneyextra.com