Cost-of-living crisis: Top tips to help your personal finances – Yahoo Finance UK

More than one million people will fall into poverty, including some 500,000 children, thanks to the cost-of-living crisis, it has been warned. Photo: Getty

The UK is facing its worst cost of living crisis in 60 years, with businesses and households tackling soaring inflation and higher taxes, as well as rising energy, food and fuel costs.

Consumer confidence has fallen in recent months on the back of the income squeeze, with Brits seeing real wages unable to keep up with inflation.

There have also been stark warnings that more than one million people will fall into poverty, including some 500,000 children. It is the first time Britain has seen such a poverty rise outside of recessions.

In response to the rising cost of living, Which? is advising consumers on how they can save money and improve their finances.

“Many people are feeling financial pressure at the moment as soaring fuel, energy and food prices squeeze household budgets,” Which? consumer rights expert Adam French said.

“However, there are steps you can take to save money and cut back on unnecessary outgoings. Start by taking a look at your finances and giving yourself a ‘money makeover’ in order to save where you can.”

Read more: European stocks muted amid warning 1.3 million Brits will fall into absolute poverty

Here are a few effective ways to reduce spending and tackle rising costs:

Transfer credit card debt

Those making large interest payments on credit card debt can move it all onto a 0% balance-transfer credit card deal. This type of credit card does not charge interest on transferred debts for a set amount of time so that users have some relief to repay any money owed.

However, the interest tends to jump at the end of the promotional period, so be sure to pay off the balance in full before this happens and opt for a fee-free card.

For example, a £2,000 ($2,639) debt on a card charging an 18.9% APR that you pay £60 a month towards will take 46 months and cost you £2,755 to clear.

By contrast, a £2,000 debt moved onto a 0% balance transfer card, with the same repayments of £60 a month will take 34 months to clear and cost £2,000 – saving you £755.

Watch: How to prevent getting into debt

Check the overdraft fees on your bank account

Going overdrawn can be costly, especially as some accounts charge up to 39.9% EAR (effective annual rate).

If your bank account has a high EAR, it could be worth …….


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