The future is a scary concept. Whether you're a school leaver, the family breadwinner in the prime of your career, or about to enter retirement, it's natural to have concerns about the years to come. Money is the primary area of worry for most people, but there are simple and painless ways to prepare without winning the lottery. Here are five straightforward ways to get on top of your finances and save yourself some pennies for later on.
1. Tax-free savings
Every person in the UK is entitled to save a certain amount of money tax-free each financial year, and yet many people don't take advantage. The limit for the tax year 2013/2014 (which runs until 5th April 2014) is £11,520 - up to £5,760 can be saved in cash, and the rest in stocks and shares. ISA accounts are very easy to set up and many banks offer the option to do it over the phone or online. Even if you only have £100 to put into an account, you'll be earning a good rate of interest without being charged tax for this year and further years. Who said there was no such thing as a free lunch?
2. Check your tax code
Many people overpay in tax and national insurance contributions because of incorrect tax codes, and unless you're savvy, this can go completely unnoticed by the HMRC. Particularly if you've had more than one job over the course of the year, are self-employed or do casual work, you could be claiming back hundreds of pounds. Have a look over your P45s and P60s and get in touch with your local tax office if you think you might be entitled to a refund. You can claim for up to five years after the end of each tax year - for more information, visit HMRC's dedicated page by clicking here.
3. Pension schemes
While everybody is entitled to a state pension (provided they have made national insurance contributions), many choose to devote an extra portion of their earnings to pension schemes to ensure they have enough money to live on in old age. Making arrangements for a company or private pension scheme now (many offer tax relief too) will mean you have additional income when you retire, and often your employer will pay into them too. There's a lot of advice on pensions available, so try not to worry if your head is spinning with information! New auto enrolment schemes in the UK mean that many large firms in the UK must pay into a pension scheme for their employees, and unless you opt-out, you'll be paying automatically into a scheme for your future too.
Budgeting can seem quite daunting, but it's important to examine where your money is going and where you might be able to make savings. The average Briton spends a shocking £7.81 on lunch each day, which adds up to around £90,000 over the course of a lifetime. Wouldn't you rather have a luxury holiday every year than munch on a dry sandwich that's part of an overpriced meal deal each lunchtime? By looking at where your money is going, you'll find yourself in a position to cut back on the areas you feel are a waste, giving you more money for the future - and a better financial future as a result.
5. Everyday savings
As well as budgeting, you can make everyday savings on a range of necessities such as electricity, gas, water and phone/internet costs. The first step is to ensure you're being billed correctly. Do you provide regular metre readings to your supplier? Are you overpaying or underpaying by direct debit each month? By keeping a close eye on how much energy you're using, it's likely you'll be able to save money. Also consider switching suppliers regularly; there are many different incentives offered for new customers, whereas sticking to the same supplier generally doesn't include the same benefits. Click here to use Money Saving Expert's budget planner tool to get started.