Think About Money

There are several steps you can take to help balance your budget.Think about whether there are any ways that you can increase your income.


Are you entitled to any welfare benefits?

If your weekly income is low, you may be able to claim Pension Credit to top it up. You could get help with your council tax, through Council Tax Benefit, and your rent through Housing Benefit. You might be entitled to Attendance Allowance or Disability Living Allowance if you need help with your personal care, or Carer`s Allowance if you are a carer. You can get benefits advice from our freephone advice line on 0808 800 6565 (or 0808 808 7575 in Northern Ireland).


Check the amount non-dependants pay for their keep

if you have non-dependant adults living with you, for example grown-up children, it is easy to forget the extra expenses they create - increased heating, food, laundry and cleaning costs. Having a non-dependant living with you can also reduce your entitlement to some benefits. Make sure that the amount they give you covers all these extra expenses. It might help to show them your household expenses List 2 so that they can see why their contribution is important.


Avoiding big bills

The aim with all your spending should be to spread bill payments over the year so that your outgoings match your income in amount and frequency. You can avoid large bills, which will place a strain on your personal budget, by using some of the following methods.


Budget schemes

Many companies offer the choice of paying bills through a regular budget scheme. You can often pay your TV licence, council tax, gas, electricity, water and telephone bills in this way. It does not usually involve any extra expenses and spreads the cost of large bills over the year. Ask your suppliers for details of these schemes.


Bank accounts for day-to-day needs

If you do not already have a bank account think about opening one.

• Using a bank account to handle your bills is safer than paying by cash or savings stamps.

• It can be cheaper as many companies prefer you to pay bills by direct debit, some will give you discounts if you pay in this way.

• State Retirement Pension and other benefits are now usually paid direct into a bank or Post Office account.

• Many banks offer telephone banking which is useful if you are housebound.

• You can operate some accounts by post or through the internet.

• Having a bank account can help you to budget because you get regular statements of your income and spending.

Most people are used to having a deposit account with a bank, building society or the Post Office. But you can now open accounts with supermarkets, major retailers, insurance companies and credit unions so it is worth investigating the different types of account on offer.

Here are just a few of the more common accounts to consider :

• basic bank accounts

• instant access (or 7 day) savings account

• interest bearing current account

• National Savings Easy Access Savings Account at the Post Office

• high interest cheque account with a bank, building society or finance company

• internet current account

Basic bank accounts are better if you need a simple account or want to reduce the risk of going overdrawn by mistake. Current accounts offer chequebooks or allow you to take out an overdraft. Most high street banks do not charge you for using an account but check this with them before opening one. Shop around for the best interest rate, and make sure you read the small print on high interest cheque accounts, as monthly charges can be higher than the interest paid out


Keep a 'rainy day' savings account

If you want to save regularly for christmas, holidays or unexpectedly large bills, look at a high interest account with a bank or building society or a National Savings Investment Account. But remember that these accounts have notice periods for withdrawls. If you have a computer, an internet current account will pay some of the highest rates.

If you are a non-taxpayer, get form R85 from the bank or buiding society you save with. Fill it in and you will avoid paying tax on any interest you earn on your savings.

Even when you have opened an account, compare interest rates with other accounts and other building societies and banks from time to time, you may find a better deal.


Savings stamps and payment cards

You can get savings stamps to pay bills, your TV licence and vehicle licence (road tax) from the Post Office. They are useful because you can buy them for small amounts each week. However, you do not get any interest on the money that you have paid and if they are lost or stolen you will still have to find the money for the bill. Many fuel and telephone companies have stopped using savings stamps and now run payment card schemes to allow customers to pay small amounts each week. Contact your telephone, gas and electricity suppliers for details of their payment card schemes.


Insulate your home

Fuel costs are often a worry, but insulating your home can help to reduce bills. If you are aged 60 or over you may be eligible for a government grant to insulate and draughtproof your home, or even to install central heating. The rules vary for each of the four nations. For further information telephone :

England 0800 316 6011

Scotland 0800 072 0150

Wales 0800 316 2815

Northern Ireland 0800 181 667

For advice and information on benefits and housing grants call freephone 0808 800 6565 (or 0808 808 7575 in Northern Ireland)


Invest savings for income

If you don`t have enough money to balance the budget, but do have money in savings accounts, it may be possible to invest some of your savings to produce greater income, especially if you are a non-taxpayer. For example in :

• National Savings Pensioners Bonds

• National Savings Income Bonds

• National Savings Fixed Rate Savings Bonds

• monthly income accounts with a bank, building society, or other provider

• a mini cash ISA

Credit unions

Credit unions provide a way of getting credit at low cost, they are financial co-operatives run by groups of people with something in common. Members may live in the same area or be members of an organisation, such as a church or a club. Members of the credit union save together. The money they save is then available to give out as loans and in this way members help each other.

There are more credit unions in some areas than others and they are regulated by the Financial Services Authority (or the Registry of Companies, Credit Unions and Industrial and Provident Societies in Northern Ireland). You should contact these regulators if you want to find out if there is a credit union in your area, or are interested in setting one up, their address is in the useful contacts menu.


Equity release schemes

Equity release schemes allow older homeowners to convert some of the value of their homes into a lump sum, or into additional monthly income. There are many things to consider with schemes like this and it is important to think about whether this is really your best option. It is vital to get independent financial advice (see savings and investments menu) and check any agreement with a solicitor before signing it.

Help the Aged runs an equity Release service which provides free initial independent financial advice on finding a suitable scheme. See useful contacts menu for contact details.