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Site updated:

10 February 2012

How to spend less

This information applies to England, Wales and Scotland and Northern Ireland

How to spend less

If you're on a low income, struggling to make ends meet or are in debt, there are plenty of ways to cut spending costs and save money.

On the following pages, we look at some of the things you can do to make savings on your day-to-day living expenses. These include:

checking whether you actually need to pay council tax (rates in Northern Ireland), or are getting any discounts you're entitled to
making sure you're not paying too much tax or national insurance
cutting down on the costs of fuel, water and other bills as much as possible
shopping, travelling and paying for treats such as eating out as cheaply as possible.

Saving money on council tax

If you're paying council tax, you should check whether you actually have to pay council tax, whether the amount on your bill is right and whether you're entitled to any discounts.

In certain circumstances, some people don't have to pay any council tax at all.

If there is someone living in your household who is severely disabled, you may be able to get the council tax bill reduced.

If you live on your own, you should get a 25 per cent discount on your council tax. Even if you do live with other people, some of them may not be counted as living with you. For example, someone who is under 17 or who has severe mental health problems, won't be counted as living with you when the council tax department decide if you live on your own.

If your income is low enough, you may be able to get Council Tax Benefit.

If you have someone living with you who doesn't have to pay council tax, you may be able to get Second Adult Rebate.

For more information about when you have to pay council tax and any discounts you may be able to get, see Council Tax.

For more information about Council Tax Benefit and Second Adult Rebate, see Help with your council tax – Council Tax Benefit.

Northern Ireland

In Northern Ireland you should check if you are entitled to any discounts on your rates bill.

People over 70 who live alone can get a 20% discount. You might still be able to get this discount even if you live with certain other people, such as your carer or a child under 18.

You can also get a discount if you have had certain adaptations made to your home because of a disability.

If you are on a low income, you may be able to get help with your rates through Housing Benefit or Rate Relief.

For more information about help with your rates in Northern Ireland see Help with your rates.

Reducing the costs of household bills

Look carefully at your spending and see if there is anything you're able to cut down on. For example, you could shop around for a cheaper gas or electricity provider, or look at cheaper mortgage or insurance providers.

Water costs

This information applies only to England, Wales and Scotland.

If you don’t use a lot of water, you might find you can save money by having a water meter installed.

If you already have a water meter and someone in your household gets benefits, it may be possible to get the amount you pay capped. To qualify for a cap on your water charges, you need to be getting benefits and also either:

have three or more children under the age of 19, or
you or someone in your household must have a medical condition that means they use a lot of extra water.

If you're accepted, your costs will be limited to the average household bill for your water company however much water you use. Contact your water supplier for an application.

In Scotland, water charges are collected by your local authority at the same time as your council tax. If you're thinking about having a water meter installed, you should check with Scottish Water to see if this would be a cheaper option for you than paying charges to your local authority.

There are lots of ways to save water. For more information, go to the website of the Consumer Council for Water at: www.ccwater.org.uk.

You can also use an online calculator to help you work out whether you can save by having a water meter installed. Go to the Consumer Council for Water website at: www.ccwater.org.uk or try the uSwitch website at: www.uswitch.com/water.

You may be able to get a grant to help you pay for your water bills.

For more information about grants to help you pay for your water and other household bills, see Increasing your income.

Energy costs

There are lots of ways to save money on fuel costs. These include:

improving energy efficiency in your home, for example, installing insulation. You may be able to get a grant to help you improve energy efficiency in your home
getting a grant to help you pay off fuel debts (England, Wales and Scotland only)
paying a reduced rate to your energy supplier if you're on a low-income or a vulnerable customer such as an older person or someone with long-term health problems (England, Wales and Scotland only)
changing your fuel supplier (England, Wales and Scotland only).

For more information about grants to help with fuel costs and paying reduced rates, see Fuel costs and saving money.

For more information on how to save energy in your home go to your supplier’s website or try the Energy Saving Trust at: www.energysavingtrust.org.uk.

In England, Wales and Scotland, you can find more information about changing your fuel supplier from the website of the consumer watchdog, Consumer Focus at www.consumerfocus.org.uk.

Mortgages and Insurance

To find out more about how to save money on financial products such as mortgages and insurance, go to the website of the Money Advice Service at: www.moneyadviceservice.org.uk.

Financial help for school-age children

If you have school-age children, you may be able to get financial help for things like school meals, clothing and travel costs. This will depend on your financial circumstances.

For more information about help with school costs, see Help with school costs.

For other ideas about getting financial help with children, young people and students, see Increasing your income.

Help with health costs

If you don't have much money coming in, are sick or disabled or aged over 60, you might be able to get help with health costs. This is help towards the cost of things like prescriptions, dental charges, eyesight tests and travel to hospital.

For more information about help with health costs, see Help with health costs.

Tax and national insurance

Make sure you're paying the right amount of tax and national insurance.

For more information about whether you're paying the right amount of tax, see Tax codes.

For more information about national insurance, see National insurance – contributions and benefits.

You can get help to check whether you're paying the right tax or national insurance from an experienced adviser, for example, at a Citizens Advice Bureau. To find your nearest CAB, including those which can give advice by email, click on nearest CAB.

You can get information about how to claim a refund of any income tax you've overpaid from the HM Revenue and Income website at: www.hmrc.gov.uk.

Savings

Tax-free interest

Interest on savings is usually taxed. Some people don’t have to pay tax. If you are one of them, you should ask your bank or building society for form R85, which you can complete and return to your branch. This avoids the need to pay tax on your savings. You may also be able to claim back tax you have already paid.

To find out more about how to get tax-free interest on savings and who can get it, go to the HM Revenue and customs website at: www.hmrc.gov.uk.

Getting the best interest rate

Make sure you're getting the best interest rate on your savings. Read any terms and conditions carefully to make sure they're what you are looking for. If you're not sure about anything, ask the savings provider or get independent financial advice.

You may be able to get helpful information from the Money Advice Service helpline on 0300 500 5000. For more information about the helpline, go to their website at: www.moneyadviceservice.org.uk.

You can also use the Money Advice Service savings and investments comparison tables to shop around for the best savings and investment deals. Go to: www.moneyadviceservice.org.uk.

Managing on one car

For some people, having two cars is essential. Others may be able to manage with one car with a bit of planning. Think about whether there are alternatives and how much they might cost. Do you really need two cars? Things to think about include:

is school in one direction and work another?
are there any particular issues around children or someone with a disability?
do you need a car for work?
have you bought one of your cars on credit which restricts your right to sell it?

Shopping

You can often buy things more cheaply over the internet than in the high street but you should take extra care before you buy something in this way. Read the terms and conditions of the site properly to make sure it meets your needs and you understand what, if any, protection you have if things go wrong.

You could also:

look in charity shops and second hand auction sales for cheaper furniture and other household goods
look out for sales and fetes in church halls.

Older people

TV licences

Some older people may be able to get a discounted or free television licence.

To find out if you can get help with the cost of a TV licence, see Television licences.

Help with heating bills

If you're over 60, you may be able to get help with the costs of fuel bills in winter.

For more information about getting help with the costs of fuel bill in winter, see Fuel costs and saving money.

Some suppliers also have their own winter fuel rebate schemes. Contact your supplier to find out if they offer this help.

Help with the costs of transport

If you're over 60, you may be able to get help with the costs of transport.

For more information about help with the costs of transport if you're over 60, see Public transport. In Northern Ireland, go to: www.nidirect.gov.uk.

Cutting down on the costs of going out

There may be a range of ways you can cut down on the costs of going out in your area. Here are a few ideas to give you some inspiration:

look out in the local and national press for special offers on eating out, like two for one, vouchers and discounts for particular groups of people. You can also go to www.moneysavingexpert.com to find out about the latest offers
check out local museums, libraries, parks and wildlife centres for free activities for children and families
check out cinemas, leisure centres and theatres for reduced prices on certain days
check out the Adult Education Centre or your local council for details of low-cost adult education classes
check the local and national press and your local authority website for discount schemes like local authority leisure cards
if you're on a low income, disabled or an older person, you may be able to get discounted travel on local public transport – for more information see Public transport
check to see whether you can travel more cheaply by buying a season ticket or booking tickets in advance
you may be able to share lifts to work – do an internet search for 'car share scheme' to check if there are any schemes in your area
if you're disabled, you may be able to save on parking costs by joining the blue badge scheme – for more information, see Private transport in Transport options for disabled people
compare the cost of petrol at petrol stations to make sure you're buying the cheapest.

Cutting down on food costs

Some ideas for cutting down on food costs include:

growing your own fruit and vegetables either in your back garden or on an allotment. For information about allotments, go to www.nsalg.org.uk. For information about allotments in your area, contact your local authority at: http://mycouncil.direct.gov.uk/index.html
swapping plants and seeds with someone else instead of buying them. There are a number of websites where you can find out how to do this. One example is www.gardenswapshop.co.uk. Do an internet search on 'swap seeds' or 'swap plants' to find others
shopping around to make sure you're paying the cheapest price in shops and supermarkets. Look out for special offers and two-for-one deals.

Further help

If you're struggling to make ends meet, there are lots of ways to increase your income and get extra help. For more information, see Increasing your income.

If you're in debt and need some help to sort it out, in England, Wales and Northern Ireland,see Help with debt and in Scotland, see Help with debt.

You can get more help from your local Citizens Advice Bureau to look for ways of increasing your income, including how to claim benefits and tax credits. To search for details of your nearest CAB, including those that can give advice by e-mail, click on nearest CAB.

Independent financial advice

An independent financial adviser may be able to help you get more out of your money or save on costs. For example, they may be able to give you advice about how to get the best deal on your savings or mortgage. The following organisations can help you find an independent financial adviser:

Independent Financial Promotions (IFAP)

Website: www.unbiased.co.uk

Institute of Financial Planning (IFP)

Tel: 0117 945 2470
E-mail: enquiries@financialplanning.org.uk
Website: www.financialplanning.org.uk

Personal Finance Society (PFS)

E-mail: customer.serv@thepfs.org
Website: www.findanadviser.org

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