If we heard it once as youngsters, we heard it a thousand times! “Look after your pennies and the pounds will take care of themselves.” But how have variations on this theme impacted our views on money? Have we been encouraged into living frugally or living cheaply through the years? And what impact is the inflation rate now having on our money?

We probably all mocked our grandparents and older generations for drumming it into us at some point. Especially as we catch ourselves mimicking them now to our children and grandchildren.

Yet many of us have never experienced the situation we are faced with today.

As inflation hits 9%, overtaking wage growth, it has never been more important to remember to look after your pennies, keep a watchful eye on your savings, and seek the best financial advice.

There is no one-size-fits-all when it comes to your finances. However, nor are you facing this on your own. Even the most educated and experienced financial gurus are thinking twice about where their income is going.

It doesn’t have to be too daunting for you, as we share some tips to ensure you continue to look after your pennies and keep your money in the right place, as we face one of the toughest financial periods in decades.


1. Do you have the right tax code?

Having turned the page on the last tax year, if you haven’t already done so, now is the perfect time to check your tax code.

Paying too much or too little tax can cause all sorts of implications, and HMRC does not always get it right!

It is actually down to you to make sure your tax code is correct, so that the right amount of tax is taken from your earnings or pension under PAYE.

Unless you complete a tax return, you could find yourself paying tax that you are unable to reclaim. There is a deadline to reclaim backdated tax overpayments. If you think you might have overpaid tax, the oldest tax year you can reclaim is for the 2018/2019 financial year.

Making sure you look after your pennies encompasses all areas of your financial circumstances. Such as using your tax position efficiently, which can be quite complex.

We would strongly recommend speaking to a specialist financial adviser, such as one of the team here at Simpson Financial Services, who are in the best position to independently assess your specific financial circumstances, review your budget and financial position, and ensure you are neither paying too little, nor too much, tax.


2. Look after your pennies by decluttering your bank account regularly

One of the changes many of us made during the pandemic was to set up new subscriptions, sign up for new memberships, and direct debits. Anything from online shopping - food, drink, and diet memberships, to virtual fitness and yoga classes, and TV bundles, to name just a few, simply to relieve some of the boredom!

Now it is time to look after your pennies once again though, as we start to get back on an even keel and some sense of normality. Added to this we are now experiencing rising inflation, increasing energy and fuel costs, and a higher cost of living on the whole.

Is your money going to the right places, or are you wasting money without realising it?

How often do you check your bank account? Have you checked it since the delivery guys became our best buddies, and our recycling bins were bursting with all the additional packaging?!

Seriously, have you calculated how much of your hard-earned cash is still going on treats? Is it still leaving your bank account on a regular basis, even now we’ve started socialising in person once again, and heading out from our homes more frequently?

Check your bank statement and make a list of your direct debits, standing orders, and subscriptions. How many of those are still necessary, and which ones can you now cancel?

Yes, it is always good to have direct debits coming out of your account in terms of your credit rating. But you might be surprised at how the smaller regular monthly payments soon add up to bigger savings over the long-term if they no longer serve you.

The money you are wasting on random bits and pieces could be better placed in savings, or being put towards your family’s financial planning.

Perhaps we have gone full circle and are coming back to the ‘look after your pennies’ mindset. And perhaps, it will serve us well.

What else can you do to look after your pennies now, so you benefit in the future?


3. Have you considered a salary sacrifice pension?

If you are part of a workplace pension scheme, you and your employer make the monthly pension contributions.

However, you may have the opportunity to make your pension contributions through a salary sacrifice scheme, which might be more beneficial (not in all cases). It means your employer contributions increase, at the same time your gross salary is proportionately reduced, and therefore your tax and National Insurance payments also reduce accordingly.

There are pros and cons when considering a salary sacrifice pension.

We would advise seeking expert financial advice before making the decision, as it can affect your future finances, pension planning, maternity or paternity pay, and possibly insurance cover provided through your employment, for instance.

Our team of independent financial advisors can assist in reviewing your current financial circumstances. We can explain in greater detail whether a salary sacrifice pension scheme would be beneficial for you, at the same time as assessing your overall family financial planning.

And our final tip on how to look after your pennies is to make sure you are claiming all the allowances and benefits you may be entitled to.

‘A pension is a long-term investment, the value of an investment can go down as well as up, which would have an impact on the level of pension benefits available’.


4. Look into claiming Universal Credit

In the October 2021 Budget, the Chancellor announced two changes to Universal Credit (UC), which, combined meant a significant increase to the income limit from which UC can be claimed. 

One of these changes introduced an increase of £500 per year in all work allowances. The other, of more significant note, is a reduction in the rate at which Universal Credit is withdrawn, from 63% to 55%.

You may find you are eligible this year, where you were previously above the Universal Credit threshold. This is something worth investigating if you truly want to look after your pennies, and ensure your family is living as comfortably as possible in light of the changes in the economic position.


Why contacting Simpson Financial Services can ease your financial strain

Whether you are currently wanting to review your individual financial status, planning for a secure financial future for your family, or wanting to set a great example for your children on how to look after your pennies, now is the time to seek the best independent financial advice.

Our specialists know how important it is to provide professional financial guidance and expertise tailored to your specific circumstances, and many of our clients stay with us from setting up their first savings accounts, buying their first home, to planning their pensions.

Being independent, we have access to rates and products which are not available through all channels, so you know you are always guaranteed the best for you.

With everything from school fees and mortgage advice, to estate planning and making a will, the team at Simpson Financial Services has everything covered.

If you have any questions about how inflation is impacting your financial plans, and want to make sure you always look after your pennies, contact us here at Simpson Financial Services today.


The value of tax reliefs depends on your individual circumstances. Tax laws can change. The Financial Conduct Authority does not regulate tax and benefit advice.