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Five ways to put a spring back into your finances

Spring is here so what better time to have an overhaul of your finances?

Minimising your tax bills, cutting your outgoings and getting the best returns on any spare cash can all make a big difference in the long run.

Here are a few tips to put a spring in your step when it comes to money matters.

1. Cut tax as a couple

The government recently introduced the Marriage Allowance, which enables couples to cut their tax bills by passing part of the tax-free Personal Allowance from one spouse to the other. There are savings of up to £212 to be made if the lower earner has an annual income below £10,600.

Official figures show that, although 4 million people were expected to benefit from this policy, take-up has been very low. Find out more here.

2. Switch your energy deal

Low oil prices have led to falls in the price of gas and electricity, with most of the major UK suppliers expected to cut rates at some point this spring. But you are unlikely to see much benefit unless you switch to a new tariff.

Use a comparison site to shop around for the best deal based on your current usage: chances are you could save hundreds of pounds a year, especially if you haven’t switched for a while.

3. Hunt down better returns

If you are managing to spend less than you earn every month, it is well worth working out how to maximise the returns on your spare cash.

If you are leaving money in your current or savings account, chances are you’re not earning much interest. Instead, why not consider taking more risk in order to generate greater rewards? If you are wary about putting money into stocks and shares, peer-to-peer lending could be a viable alternative, with more risk than a bank account but considerably higher returns. It is important to remember that with peer-to-peer lending your capital is at risk.

4. Work out the best way of borrowing

If you’re in debt or need to borrow money, there is much you can do to minimise your interest charges. Consolidating existing debts into a single, low-rate loan can be a great way of avoiding the high rates typically charged on the likes of credit and store cards.

And while cards can offer cheaper rates over fixed periods, they can prove very expensive if you can’t clear your debts quickly enough. With a personal loan, on the other hand, you know exactly what your repayments are going to be and how long for.

5. Get your credit score in order

One of the keys to borrowing at a competitive rate lies in making sure your credit score is healthy. It can be damaged if you have missed repayments or defaulted on debts – but you might also have a black mark if you are not registered on the electoral roll at your current address or if you have made multiple applications for credit in recent weeks.

One way to check your credit record is by using a new free service called ClearScore, which gives you a creditworthiness mark out of 700 plus advice on how to improve your score.