Prices are climbing everywhere – from groceries to mortgage rates. It feels like your money stretches less each month, right? The good news is you don’t have to just accept it. With a few practical tweaks you can stay in control and even find ways to grow your savings despite the squeeze.
First, know what’s hitting you hardest. Pull out your recent bank statements and list the top five expenses that have risen the most. For many people it’s utility bills, food, transport, mortgage or loan repayments, and insurance premiums.
Once you have that list, target the one with the biggest jump. If your mortgage rate jumped to 7%, a remortgage could shave off a few hundred pounds a year. The same goes for a credit‑card balance – applying the 20% credit card rule can keep interest low and protect your credit score.
Don’t forget hidden costs. A higher insurance premium, for example, might be linked to a recent credit‑score dip. Checking your credit report and fixing errors can bring that premium down.
When costs rise, the old advice of stuffing cash in a regular savings account won’t cut it. Look for accounts promising 7% or even 8% interest – many UK banks and ISAs are offering these rates for limited periods. The key is to compare the terms, any early‑withdrawal penalties, and whether the interest is tax‑free.
If you’re comfortable with a little risk, a Stocks and Shares ISA can give better returns than a cash ISA, especially when inflation erodes the buying power of low‑interest accounts. Use our guide on "Best ISA Interest Rates in 2025" to pick a provider that matches your risk tolerance.
For short‑term goals, a 10‑year CD (certificate of deposit) still works well. A $10,000 CD in 2025 can earn decent interest without market volatility, and the fixed rate locks in a return that beats most savings accounts.
Remember, any extra money you save on daily expenses should go straight into these higher‑yield accounts. Even a few extra pounds each week add up fast when the interest compounds.
Finally, keep an eye on debt. If you have multiple high‑interest loans, a debt‑consolidation loan from a UK bank could lower your overall rate. Just check eligibility and compare the total cost over the loan term.
Rising costs are a reality, but they don’t have to ruin your financial plans. By pinpointing the biggest price jumps, locking in better savings rates, and trimming debt, you can stay ahead of inflation and keep your money working for you.
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