7 money mistakes that could give you a financial ‘fright’

It’s not only ghosts and ghouls that people need to watch out for this Halloween.

For some people, perhaps it’s time to shine a torch onto their finances, to make sure there isn’t something lurking there that may come back to haunt them.

Here are some financial “frights” that it pays to avoid.

1. ‘Zombie’ savings

Rachel Springall, a finance expert at Moneyfactscompare.co.uk, says: “Savers might be spooked about recent interest rate volatility, but it’s still a great time to bag a top return.

Consumer Prices Index (CPI) inflation was 1.7% in September – so savings rates need to have been at least at this level just to keep up with rising living costs.

Springall says some major banks have accounts paying less than 2%, but some easy access deals have been paying as much as 5%.

2. Being too slow to ‘ghost’ your current account provider

Springall explains some accounts pay decent interest on balances or perhaps a “helpful upfront cash sum” when using the Current Account Switch Service (CASS).

She says: “Some current account providers also offer exclusive savings accounts, such as high-interest regular savings accounts, so that is worth keeping in mind before moving accounts.

3. Ignoring warnings from your bank

In an age when we’re bombarded with messages, it can be tempting to ignore some mobile notifications – although they could be vital.

Keeping an eye on any banking app notifications about payments leaving your account can be useful in case there’s an unexpected or even a fraudulent payment.

Banks also use a name-checking service called “confirmation of payee” when customers are setting up payments. If it says the account doesn’t match the name of the person you think you are paying, it could be a scam.

Banks may also send out messages about suspect activity on your account – but bear in mind fraudsters can “spoof” numbers to make them appear to be from your bank.

4. Ghoulish credit card charges

If you’ve got credit card debts, shifting to a 0% interest balance transfer card could potentially make them less expensive and easier to pay off.

Bear in mind any fees for making the balance transfer and the end date for the 0% deal, so you know when the balance needs to be cleared before interest kicks in.

Some people may be concerned that applying for a new card could affect their credit score. Online eligibility calculators can help people to work out in the first instance how likely it may be that they would be accepted for particular cards. This is a “soft” search and does not affect credit scores.

If you go on to apply for the credit, the company will make a “hard” search of your credit history, to see your suitability.

5. ‘Vampire’ home appliances draining your budget

Unplugging items when they’re not in use and only filling the kettle with as much water as you need can help save money around the home.

Some home appliances, such as fridges and washing machines have an energy rating label, to help households choose energy-efficient models.

The Energy Saving Trust has more information about how they work at energysavingtrust.org.uk.

When buying a new appliance, the Trust’s website also suggests considering the size of the item you need for your household. For example, buying a smaller dishwasher could be more energy-efficient than buying a big dishwasher if it is only ever partially-filled.

6. Sleepwalking into a workplace pensions shortfall

David Meliveo, chief commercial officer at People’s Partnership, provider of the People’s Pension, says it’s “impossible” to plan for your future if you don’t know how much you’ve saved in the first place.

“But there are relatively simple steps that people can take, including the very obvious first step of checking your current work pension online,” he adds.

“You can also change the date when you intend to retire, ensure your address is up to date, and you can even change how your pension savings are invested or transfer any other pensions you might have if that works for you. You can also check how much you are being charged for your pensions.”

7. Black holes in your state pension record

People can check their state pension forecast at gov.uk.

It may be possible to fill gaps in your NI record by paying voluntary contributions.

Usually, people can only pay voluntary contributions for the past six tax years. But currently, people can potentially fill gaps going back to April 2006.

The deadline to make up contributions going this far back runs out on April 5 2025 – so time is running out.

Some people may be entitled to NI credits rather than needing to pay contributions, so they will need to weigh up what’s best.

More information about making voluntary contributions is available at gov.uk.