A lot has changed in 25 years. In 1990, Tim Berners-Lee had just laid the foundations for what would later become the internet; you could still smoke on planes; and the Bank of England's base rate stood at 13.9%.
Attitudes to our personal finances have changed, too. Consumers in 2015 are more informed than ever, and have access to a huge range of information – both online and in print – to make better choices when it comes to saving and making money.
To celebrate Moneywise's 25th birthday, we've rounded up 25 of our best-ever tips to help you better manage your finances. Here's to another quarter century of being better off...
1. USE YOUR FULL ISA ALLOWANCE
The first home for your savings should always be your Isa. In the 2015/16 tax year, the total Isa allowance is £15,240, which can be split however you like across cash and stocks and shares. Isas are completely sheltered from tax, meaning any returns within the 'wrapper' will accrue tax-free.
You don't have to declare them on a tax return, either. Importantly, Isas are transferable, as long as you keep the wrapper around it - so you can move your money between Isa providers to secure the best rates possible. Depending on your investment goals and time frame, it's a good idea to spread money across both asset classes to boost returns.
Those under 16 can open a Junior Isa and they and their parents, grandparents, or guardians can contribute £4,080 to it each year.
2. MAXIMISE COMPANY BENEFIT CONTRIBUTIONS
We're all living longer so a pension really should be an integral part of your retirement planning.
There's the option of investing in a personal pension, such as self-invested personal pensions (Sipps), but your first port of call should be your company pension. Thanks to auto-enrolment, which came into play in 2012, almost all companies must offer employees a pension, and contribute to it too. (The last companies, which are small companies with only a handful of employees, have to enrol employees by 2017.)
Some companies will contribute more than others, and large companies will often match your monthly contribution. Not only will you benefit from tax relief at either 20% or 40%, depending on your tax bracket, but you'll benefit from your employer's contributions too. So turn it down, and you're effectively doing yourself out of a pay rise - or free money.
3. MAXIMISE EMPLOYEE BENEFITS
Your employer can be a great source of untapped resource when it comes to negotiating discounts and benefits, and can offer anything from childcare vouchers to season ticket loans and discounted gym membership to share save schemes, which allow you to buy company shares at a discount to the rest of the market.
Many employee benefits are paid for through salary sacrifice – when a portion of salary is swapped for a non-cash benefit – and includes schemes such as Cycle to Work and a season ticket loan. Always check which benefits best suit your needs before taking them up, as they will have a knock-on effect on your take-home pay because you may have to pay tax on anything deemed a 'benefit in kind'.
4. MAKE A BUDGET
Never spend more than you earn. It might sound obvious but a budget is still the most effective way to manage your personal finances. There are many free budget tools online but the best way to set one up is to go back to basics and note your income and outgoings each month.
Be as specific as you can when breaking down costs, so nothing gets missed off. If what comes in is more than what goes out, congratulations – what's left at the end of the month can be swept into your savings. But if it's the other way around, scrutinise your spending and see what you can afford to cut back on. You don't want to risk spiralling into debt.
5. SHOP AROUND
Loyalty doesn't pay. Savings accounts in particular have a nasty habit of offering a blockbuster initial rate to hook you in, only for the rate to fall away after a year and be replaced by a much lower one. This also happens with insurance premiums – they typically rise year- on-year unless you cancel and move provider.
Use online comparison tools such as those on Moneywise.co.uk/compare and the likes of MoneySuperMarket.com to shop around to find the best rates, whether that's for a savings account, credit card or mortgage. And thanks to seven-day switching, which came into force in 2013, it's easier than ever to switch current accounts.
Recent research from Gocompare.com shows that 43% of Brits haven't switched provider for any of the 10 most common financial products in the last year – including car or home insurance, energy, broadband and mobile phone provider. "Banks and lenders tend to offer their most competitive deals to new customers, relying on the fact that most of us believe that switching is too much hassle.
The reality is that switching is easy," says Nicholas Frankcom, money expert at uSwitch.com. "It's worth taking the time to look over your household finances to see if you can get a better rate for your credit card, or find a bank account that better suits your spending habits."
6. STAY INFORMED
Thanks to a wealth of financial information, we're far more knowledgeable than ever before, and it means we can make the best possible decisions about our finances. Staying informed and abreast of policy announcements and savings rates, for example, means decisions about your hard-earned cash are made far easier.
It's as simple as reading the financial press regularly (or even signing up to Moneywise email newsletters), which will keep you up to date with everything from regulation and banking changes, to updated Isa and pension contribution limits as well as the best stocks to invest in. So why listen to the intricate ins and outs of the Chancellor's Budget next month when we can do it for you?
7. CHECK YOUR ACCOUNT STATEMENTS REGULARLY
You might assume you have a good idea of the balance in your current or savings account but it can often come as a nasty surprise when you finally check. Burying your head in the sand, especially if you're in debt, is not a good option. Make sure you check your statements each month when they come through, and flag up anything you don't recognise to your bank.
This also gives you a good chance to assess if you're spending more than you're earning, and budget accordingly. If it's more convenient for you to receive statements via email, switch to paperless. And it's never been easier to check up on your accounts, thanks to the myriad smartphone banking apps available. So what are you waiting for?
8. SET YOURSELF AN INVESTMENT PLAN
The golden rule of investment is to follow 'a well-defined asset allocation plan'. Bit of a mouthful isn't it? But fear not, all it means is that depending on your investment goal, you should set out a plan as to how to achieve it before you part from your cash, and then try not to steer from it.
This is because – to use the investment boffin lingo again – 'clear asset allocation removes the risk to make material changes to your portfolio if the market suddenly turns sour'. To translate, that just means be wary of making knee- jerk decisions in falling markets because even though your returns might dip slightly in the short term, you could still do well from staying invested, or even investing more as, for instance, some stocks and shares might be cheaper.
Having a plan also helps to encourage a long-term view of your investments. Adopting a 'core/satellite' approach, which typically means holding stable, less risky assets as the 'core' of the portfolio, which doesn't change; and topping it up with riskier, 'satellite' assets that can be swapped in and out more frequently is an often suggested strategy.
9. MAKE THE MOST OF CASHBACK AND VOUCHERS
Imagine paying for your everyday household expenses and getting 3% as cashback. It may sound like a pipe dream but it's perfectly possible and it's why cashback websites, such as Top Cashback and Quidco, are so popular. The latter even claims its members make £280 a year from it.
Cashback credit cards, like the Amex Platinum Everyday card or the fee-paying Santander 123 card, are popular, too – but always check that the cashback benefits are right for you before taking one out, particularly if the card comes with an annual fee. Additionally, get into the habit of using voucher codes, as many businesses accept them. Websites such as VoucherCodes.co.uk and Vouchercloud.com should be the first place to visit if you're looking for a cheap deal on anything from a haircut to a restaurant.
10. PAY OFF ALL CREDIT CARD AND LOAN DEBT
While saving for the future is probably the best single piece of financial advice, you should clear all outstanding credit card and loan debt first, as there's no point saving and earning just a few measly percent in interest when your debt is actually costing 10 times as much.
The average credit card APR currently stands at 20.6%, according to financial data site Moneyfacts.co.uk, which means if you're not paying the full amount off every month, you'll get stung for heavy charges. Some credit cards oFfer introductory 0% rates on balance transfers or purchases but these tend to run out after 12 months.
Likewise, loans are expensive debt and should be top of the list to pay off. This doesn't apply to student loans and mortgages though, which are generally cheaper debt.
11. WORK OUT HOW MUCH RISK YOU CAN AFFORD TO TAKE
Risk and return is at the heart of every investment decision you make, whether you leave your savings in a cash account or invest in a stocks and shares portfolio. Firstly, consider your attitude to risk. Does the idea of losing money send you into a cold sweat? Or would you rather invest a little money in a riskier fund and take a chance on a sweeter return? This is why risk is tied up with return – generally, the more risk you take, the fatter the return will be.
And it can even be the case that by seemingly taking no risk can actually prove very risky. For instance, if you leave all of your savings in a poor-paying cash savings account because you think it's safer than investing it, you could still end up losing money over the long-term as inflation could eat into your returns. The experts refer to this as 'reckless conservatism'.
There are plenty of online tools that can help you decide the appropriate level of risk to take, or ask an independent financial adviser for advice. You'll also need to consider your investment horizon. Do you need the money imminently? Consider an easy-access cash Isa
if so. But if it's for retirement, or for a long-term need, consider taking a little more risk – the extended time frame will give your portfolio enough time to smooth out any market bumps.
12. WRITE A WILL
Writing a will seems a morbid prospect, especially if you're young. But as 35% of over-50s don't have a will in place, according to insurer RIAS, it's more important than ever to make one to avoid dying intestate. There are several ways to go about writing one but it's imperative to ensure it's accurate and legally sound.
A will makes it much easier for your loved ones to deal with your affairs after you die. There are many will-writing services available, other than those provided by solicitors, but if you go down that route, make sure the company is a member of the Institute of Professional Willwriters.
13. HARNESS THE POWER OF COMPOUND INTEREST
Albert Einstein called compound interest "the eighth wonder of the world". Compound interest is the effect of paying your regular interest payments – or dividend payments if you've invested in stocks and shares – back into your initial deposit, providing a bigger base from which your money grows.
As an example, in year one, an investment paying 5% will pay £50 on a £1,000 deposit but in year two it will pay £52 because that 5% is being applied to a new bigger balance of £1,050. OK, this might all sound a little academic but you can benefit from it by not delaying contributing to your pension, for example.
The earlier you start, the less money you'll need to save, as the following example shows. Mark starts saving when he is 25 and invests £50 a month for the next 40 years. Laura wants to enjoy her relative youth and doesn't bother starting to save until she is 45. Aware she might be lagging behind, she saves £100 a month for 20 years.
Although both paid in a total of £24,000 and achieved a return of 5% a year, Mark has earned £52,618.93 bringing his nest egg up to a total £76,618.93, while Laura only added £17,274.63 to her original investment, giving her a more disappointing final balance of £41.274.63.
14. TAKE GOOD FINANCIAL ADVICE
Deciding on the right course of action for your personal finances and investments can seem overwhelming, especially when there are so many options to choose from. If you don't feel confident making big decisions on your portfolio, find an independent financial adviser (IFA) through Unbiased.co.uk.
Since the Retail Distribution Review came into force at the end of 2012, IFAs now command an upfront fee, rather than being seemingly 'free' though earning commission. All their advice is completely independent across the market. "One-to-one financial advice enables you to do exactly what you'd do if you were the expert," says Karen Barrett, chief executive of Unbiased.co.uk.
"Making decisions on your own has become harder than ever, conversely because there's so much information out there to confuse you. Taking independent advice removes that confusion and gives you the reassurance that you really are making the best financial choices."
15. START INVESTING
To some, investing in the stockmarket can seem a rollercoaster ride of market ups and downs. But as returns on cash accounts are slumbering, it's worth looking to stocks and shares for a plumper return.
There are many things to be aware of first, not least your risk profile, but if you feel confident then a fund supermarket is the best place to start, which will typically offer a huge investment fund, trust and individual stocks universe. Recent research from Fidelity Personal Investing found that if a saver invested £15,000 into the FTSE All-Share index over 10 years to the end of April, they would have a return of £33,344.26. Conversely the cash return, if they invested £15,000 into the average UK savings account over the same period, would be £16,271.25.
Fidelity investment director Tom Stevenson adds: "The safety of cash is an expensive luxury today."
16. BUY LIFE INSURANCE
You won't understand how important insurance is until you need to use it. There is a baffling array of protection products on offer – from insuring your wedding and pets to protecting you if you go on long-term sick leave – that it can be hard to know which products are necessary, and which you can do without.
Life insurance is one of the most important products to hold, particularly if you have a property or children. "Whether it is obligation or desire, the ability to ensure continued financial security for those who are financially reliant upon us, in the event of our death, is through life insurance," says Peter Chadborn, founder of Plan Money.
Consider other forms of protection, too – most importantly, income protection, which will cover you if you lose your job, is essential if you have dependants. After all, online, and can often list items from just 1p. It's a huge marketplace: around 60 million items are listed on eBay.co.uk at any one time, which is roughly equivalent to every person in the UK selling one item each.
The listing process is simple, and prices vary depending on what is being sold. Car boot sales are another option and a good excuse to make money from a spring-clean. On the flip side, auction sites can offer brilliant value for money on a whole range of items – particularly if you don't care about the condition.
17. USE AUCTION WEBSITES
Over the past decade, auction websites such as eBay and Amazon have revolutionised the way we buy and sell our unwanted items. You can sell anything from socks to cars online, and can often list items from just 1p.
It's a huge marketplace: around 60 million items are listed on eBay.co.uk at any one time, which is roughly equivalent to every person in the UK selling one item each. The listing process is simple, and prices vary depending on what is being sold.
Car boot sales are another option and a good excuse to make money from a spring-clean. On the flip side, auction sites can offer brilliant value for money on a whole range of items – particularly if you don't care about the condition.
18. CHECK YOU'RE BEING TAXED CORRECTLY
The word 'tax' might send a lot of people into a cold stupor but getting your tax right can make you richer to the tune of thousands of pounds a year. Check your tax coding notice carefully, as it's not uncommon for HMRC to send out the wrong one. There are plenty of ready reckoners online you can use to check.
For those who are self-employed, make sure you are registered with HMRC and keep detailed accounts each year. This will help when it's time to complete a self-assessment tax return, either in October for the paper version or at the end of January for online submissions. It's also worth checking to see if you're eligible for tax credits by entering some simple details about your income and circumstances at Gov.uk/qualify-tax-credits.
19. FIND OLD ACCOUNTS
Thousands of us have money languishing in old bank accounts, Isas and pensions without our knowledge – estimates stand at around £15 billion. If you think you might have a 'lost' account, check through any old statements. There are several online resources to help track them down.
My Lost Account, set up by the British Bankers' Association, the Building Societies Association and National Savings & Investments, can help you track down any cash stuck in old bank accounts or premium bonds, while the government's Pensions Tracing Service (Gov.uk/find-lost-pension) does the same with pensions.
20. USE A FUND SUPERMARKET
Fund supermarkets, such as Hargreaves Lansdown, Interactive Investor and Fidelity Personal Investing, offer a huge range of investment funds, as well as individual stocks and shares, at often lower prices than going through brokers and financial advisers. They enable investors to hold sophisticated online portfolios of investment funds, trusts and stocks and shares at the click of a button, and offer tax wrappers such as Isas and pensions as well as general investment accounts.
While they are usually more cost- effective than buying investments direct, costs can vary hugely and it's up to investors to decide which platform is right for them. For example, fund shop Hargreaves Lansdown charges an annual fee of 0.45% on the total portfolio value, tiered lower the more money you hold, while Interactive Investor charges a flat fee of £80 a year.
Typically, the larger portfolio you have, the better value the fees will be. While convenient, these online fund shops don't offer any kind of advice, and first-time investors should consider speaking to an IFA before choosing investments.
21. CHECK YOUR CREDIT SCORE
Most people will have little idea what their credit score is but it's essential knowledge if you're applying for any kind of loan, including credit cards and a mortgage. There are three main credit agencies – Experian, Equifax and CallCredit – and all will hold information on your credit history based on your home address.
It's a wise idea to check your file every few years, especially before you apply for any type of loan, to ensure it's in good shape and doesn't include errors. They all have to give you one-off access to your report for £2 a time but you can also check your file for free during a 30-day trial for ongoing access with the big agencies - just remember to cancel the subscription before the month is up to avoid being charged.
22. KEEP THREE MONTHS' SAVINGS AS A CASH CUSHION
As legendary investor Warren Buffet once said: "Do not save what is left after spending but spend what is left after saving." Getting into a good saving habit is one of the smartest moves you can make when it comes to your finances. Save just £10 a month for 30 years, assuming an interest rate of 2%, and you'll be almost £5,000 better off at the end of the term.
At the very least, you should squirrel away a cash buffer of around three months' wages, to ensure that you'll be covered in the event of an emergency – if you are too ill to work or keep up with regular mortgage payments, for example. Regular savings accounts – which usually offer higher rates of interest than easy-access accounts – are designed to help savers foster a regular habit, as they require a monthly deposit to earn the interest at the end of the term.
Check you can afford to put money aside each month first, though. There's no point spending more on expensive credit cards just to save a little extra a month.
23. BUY TRAVEL MONEY WISELY
Given that the average overseas holiday now costs £1,404, according to Halifax, nobody wants inflated overseas credit or debit card charges added to the bill. Firstly, shop around for the best deal on foreign currency. This will almost always not be at the airport, where brokers prey on unwittingly holidaymakers who have left it too late to do much else.
Instead, shop around currency brokers online, which often have the option of delivering straight to an airport kiosk. Avoid using credit cards abroad, as these often carry the highest fees – although there are some exceptions. Prepaid currency cards are ideal if you want the flexibility of using a debit card without worrying about excessive charges, and many are available in euro, sterling and dollar versions so you can top up when the exchange rate is favourable. Compare the best through an online comparison site such as TravelSupermarket.com.
24. PLAN AHEAD TO REDUCE INHERITANCE TAX BILL
Inheritance tax (IHT) is one of the most hated taxes. Nobody wants to see a loved one's wealth go straight to the taxman after they die – especially as the government makes billions of pounds a year from it. Broadly, inheritance tax is paid at 40% on an 'estate' – meaning property, money and possessions – with a value above the threshold of £325,000 (though the Chancellor is expected to announce an increase in the limit to £1 million for parents passing on the family home to their children in his Budget on 8 July).
Thankfully, there are a few ways to minimise the tax bill. The first step is to make a full and accurate will, specifying to whom your assets should go in the event of your death. You're also allowed to give cash or gifts of up to £3,000 per tax year without incurring IHT. Equally, you can give money away - typically to a child for a house deposit, or for a big event like a wedding – and no IHT is due on this either, provided you live for seven years after the gift was made.
25. CONSIDER HOW YOU TAKE YOUR PENSION
Pension rules have been radically overhauled this year, with some of the biggest changes in a generation ushered in, meaning more pension freedom for retirees. Previously, those aged 75 and over had to buy an annuity – a guaranteed income for life – but now everybody aged 55 and above can take their entire pension as and when they want it, and pay no tax on the first 25%.
While many welcome this new freedom, it also means that pensioners can be left with no cash if they choose to take the whole amount as a lump sum within the first few years of retirement. Consider your needs carefully and speak to an adviser if necessary. "The new savings market offers much more flexibility and choice, which is a positive for savers, but it can be overwhelming," adds
Julie Hutchinson, personal finance expert at Standard Life. "Getting your new savings plan in place will help you feel in control. For some people, talking to a financial adviser will help but there's also lots of tools and guidance available online."