Do you know your finances?

Annual percentage rate

APR can be used to compare different credit and loan offers. APR takes into account not just the interest on the loan but also other charges you have to pay - for example, any arrangement fees or annual usage fees.

£740

While APR is a useful way to compare the costs of similar products with different providers, it can confuse matters when it comes to working out the total cost of credit borrowed over less than a year. Most short-term lenders, as well as their APR, will show you an example in pounds and pence, to help make the cost of borrowing from them clearer.

£31

Even a seemingly small percentage rate rise can have a big impact on your finances over the long term. If you’re looking for a mortgage, it’s worth exploring both fixed rate interest and base rate tracker mortgages to work out which is right for you. And, don’t be afraid to change mortgage provider later if you find you’re no longer getting the best deal.

Registering on the electoral roll, Numerous applications for credit & The number of credit accounts you have open

The correct answers were registering on the electoral roll, numerous credit requests and the number of accounts you have open.

Registering on the electoral roll improves your score as it allows lenders to verify who you are, and where you’re living, and helps to rule out the possibility of fraud.

Having a number of applications for credit in a short period of time on your credit report can have a negative impact on your score. This can signal to lenders that you are in sudden need of credit or maybe struggling with debts.

The number of credit accounts you have open is also a popular credit scoring measure. Credit scoring models also consider how many accounts have balances. Generally, it’s better to have more zero-balance accounts than ones on which you’re carrying a balance.

32%

According to think-tank the Royal Society of Arts, 32% of UK workers have less than £500 in their savings. In July 2018 the Treasury Select Committee released a report that called for action to be taken to help hard-pressed households take control of their finances and save for a rainy day. With economic uncertainty ahead, the committee believes that Brits are facing a series of challenges that put “the health and sustainability of their finances under pressure”. However, it’s not all doom and gloom, and there are plenty of ways to squirrel away a little money here and there to kick-start a rainy day fund.

Dipping into an unauthorised overdraft

According to consumer association Which?, unauthorised overdraft fees were costing customers hundreds of pounds, with fees which were comparably higher than any other financial product on the market. The Competition and Markets Authority (CMA) has now ordered banks to set a maximum monthly charge (MMC) for unauthorised overdraft fees, in a move to cap the cost of this kind of borrowing.

P60

A P60 is a certificate issued to taxpayers at the end of the tax year. It details taxable income and deductions made by PAYE that year. You should receive one P60 form from each source of employment. You’ll need your P60 to prove how much tax you’ve paid on your salary in order to claim back overpaid tax, to apply for tax credits and as proof of your income if you apply for a loan or a mortgage.

You can find out more about PAYE forms on the .gov website - https://www.gov.uk/paye-forms-p45-p60-p11d