How you can beat the credit crunch

SOARING energy costs and higher food bills - with wages not keeping pace and the credit crunch hitting pensions - means most people are feeling the financial pinch.

SOARING energy costs and higher food bills - with wages not keeping pace and the credit crunch hitting pensions - means most people are feeling the financial pinch. Today SIMON PARKIN highlights some easy ways to tighten your belt and passes on some savvy saving tips.

WHATEVER age you are, whatever stage of life you are at, unless you happen to be a millionaire there can't be anyone who hasn't in the past few months felt the effects of rising prices.

Spiralling food costs have added £15 to the average weekly supermarket shop, while energy bills have soared, with gas and electricity going up by as much as 30 per cent.

It's certainly put the squeeze on family budgets but there are things you can do to tighten your belt. Saving money isn't all about balancing bills and bank accounts and it's not all about killjoy penny-pinching either. A few savvy choices can help you spend less on everything - from shopping to days out to holidays.

PARENTS

Budget - Child care is often a major expense and a dilemma for new parents: you cannot afford to be off work, but the cost of child care is too high. First stop should be checking what your employer offers. If they have a workplace nursery, the fees will be tax and National Insurance free. If they offer vouchers, you'll avoid tax and NI on the first £55 a week, providing your child carer is registered. Call 0845 3003900 to check if this will affect tax credits.

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Shopping - The list of items needed for a new arrival is frightening. However, cutting costs doesn't mean cutting quality. Don't pay over the odds for a pushchair when the highly rated Mamas and Papas Nipi (Best Buy in Which?) is £59. The similarly top rated Tomy Baby Link is just £17.

Going out - Family fun can be an expensive business, but many attractions offer free child entry, two-for-one deals or family tickets. Check www.daysoutuk.com for money off vouchers.

Travel - Travelling with a tot needn't break the bank. Most airlines charge just 10pc for under-twos and some offer free places. Check before booking. British Airways even offers big discounts for under-12s.

FAMILIES

Budget - High shopping bills with a large family are inevitable, but you can make them work in your favour by being canny on spending points built up on credit and loyalty cards. For example, a £2.50 voucher from Tesco will only get you £2.50 off your next shopping bill, but £10 off entry to a theme park. Remember, you'll only be saving if you're paying off your bills every month though.

Shopping - Back to school once meant new shoes and pencil cases, now it's as likely to involve new software for the kids' laptops. Basic word processing, spreadsheet and graphics programmes can be downloaded free from open source sites (www.openoffice.com)

Going out - Many families now have two cars, which is an obvious place to save. However, if you cannot cut down at least think carefully about depreciation on the models you buy. For example, a Ford Focus will on average lose £1,400 less in value over two years than a Citroen C4.

Travel - Family holidays are a true budget breaker, whether you're jetting off or staying in the UK. One option that will slash the cost is a house swap. Join an agency from about £30 a year and the accommodation savings can be vast, even taking into account the travel costs. www.homelink.org, www.guardianhomeexchange.co.uk

STUDENTS

Budget - For many teenagers, leaving home for university it will involve opening their first proper bank account. Rule one is don't be swayed by freebies. They may look a bargain, but in the long run you'll save far more by seeking out an interest free overdraft of £1,000 or more.

Shopping - An NUS card can be worth its weight in terms of savings. Many shops, restaurants, bars and cinemas are keen to lure in students, so even if discounts aren't advertised it pays to ask. For even greater savings it's worth paying £10 for an NUS Extra card which offers discounts at high street shops, including Topshop and HMV as well as online retailers like Amazon. www.nusextra.co.uk

Going out - Running a car as a student could be considered an extravagance, but one way to cut the cost is extra training which will help slash insurance. Pass Plus, a course that involves a minimum of six hours training at about £15 an hour can cut premiums by up to 20pc. Some local authorities even subsidise the cost. www.passplus.org.uk.

Travel - Supplement your NUS card with an international student identity card to get savings at hotels, hostels, shops and restaurants in more than 100 countries. And buy an NUS Extra card and it's free. www.isiccard.com

TWENTY-SOMETHINGS

Budget - Tackle your debts. Zero per cent credit cards are increasingly thin on the ground since the credit crunch, but there are still opportunities to switch. The Abbey has just launched its Zero card, which has 0pc on balance transfers for six months. Both Nationwide's Gold card and the Post Office's Classic credit card have 0pc on balance transfers for ten months with fees of 2.5 and 2.75pc.

Shopping - It may sound the most basic of advice but it's surprising how people newly on the career ladder, with money in their pockets, will blow it without shopping around. Always check prices between stores and using online comparison sites like www.pricerunner.co.uk

Going out - For £20 a year you'll save a third on most rail fares, and with prices steadily rising - Ipswich to London fares rose by between 5-7pc this year - this is increasingly a good deal. www.youngpersons-railcard.co.uk

Travel - Keeping in touch with your mates while away costs a fortune. Check which network is the cheapest in the country you're visiting before you go or consider buying a local Sim card. www.0044.co.uk and www.uk2abroad.co.uk are helpful.

FIFTY-SOMETHINGS

Budget - The credit crunch means banks are falling over themselves to woo savers. Plenty of instant savings accounts now pay upwards of 5pc, while people chasing the best rates are now easily earning over 6pc on some accounts. The Nationwide recently increased the interest rate paid on one of its savings bonds to 6.6pc. Saga has launched a one-year fixed rate savings bond paying 6.76pc. Halifax has a five-year bond paying 6.85pc.

Shopping - A little-known but top money saver is paying for regular prescriptions in advance. Patients who have to pay for more than five prescription items in four months or 14 items in 12 months may find it cheaper to buy a pre-payment certificate. A single prescription costs £6.65 and an annual pass costs £95.30, so every prescription over and above your 14th in a year is free.

Going out - With a bit of planning it's possible to eat like a king but pay like a pauper. Take advantage of restaurant special offers. The internet is a mine of deals; several websites specialise in discounts, usually along the lines of 2-for-1 main meals, 50pc off the bill or a free bottle of wine. Try www.lastminute.com and www.5pm.co.uk. Many restaurant websites highlight cheap deals. One that's particularly good is Wagamama. Sign up to its “member's area” for regularly updated 2-for-1 deals and discount vouchers.

Travel - Cut the cost of airport parking by booking ahead and shopping around (www.airport-parking-shop.co.uk). If you've got an early flight look for hotels that offer cheap parking while you're away (www.airport-hotel-shop.co.uk).

PENSIONERS

Budget - Many older people are losing out because they are simply not claiming what they are entitled to. Pension credit means that no pensioner should be living on less than £119 per week. Applying is easy. It can be claimed entirely on the phone - without any form-filling - in one free phone call to 0800 99 1234. You can also apply for housing benefit and council tax benefit in the same call.

Shopping - One of the sure signs of advancing years is the need to reach for glasses. But a new pair of specs can be a major expense, with the average cost now at more than £150. Yet look beyond the high street and major savings come into focus. If you have a prescription consider one of the online discount stores such as Glasses Direct or Glasses2You, where you'll pay as little as £15 for a pair.

Going out - Taking full advantage of everything from your new countrywide bus pass to special offers, from cut-price cinema and theatre tickets at reduced rates at leisure centres, can save a fortune.

Travel - Many hotels offer special senior rates so it's worth checking before booking. For example, if you're over 62 you can save at least 15pc at Marriott hotels and up to 50pc at participating Hyatt hotels. World Hotels offer discounts up to 25pc at certain hotels for those aged over 60.

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