Martin Lewis, Britain's money saving expert on how to shrink your bills - now!

Honey, I shrunk the bills

By Martin Lewis, Britain's money saving expert, 17/05/2009

WE'RE all struggling, aren't we? Well as it happens, NO.

Despite dire economic news, it's not ALL bad. It's a buyer's market so there's never been a better time to flex your consumer muscles and bag top products.

After all, those in stable jobs with variable-rate mortgages have probably never had it so good.

Don't get me wrong, much of the financial world REEKS: Income's shattered by unemployment and pay cuts, plus wealth's shrinking due to house and share price falls.

Let's stop the nasty niff overpowering every bit of good news. After all, deflation may be a symptom of a weak economy but it means some prices ARE dropping. Take advantage . . .

FREE BT LINE INSTALLATION

Normally you can hear the growl miles away, people move into a house that had a BT line but face £122.50 for reconnection.

Yet until June 30 a promo means free installation even for just a second line.

Call 0800 800150 and request the "new line free connection offer".

To get it you must sign up for 18 months and make a minimum ten phone calls monthly, though inclusive BT package calls are fine.

Then opt for paperless billing, pay by direct debit, and use no-frills over-ride providers like 18185.co.uk.

OUTSTANDING STUDENT LOANS TO SHRINK FROM SEPTEMBER

Currently, if you began uni pre-1998, interest is at 3.8 per cent. The rate is set annually each September, based on RPI inflation the prior March.

For those starting college since 1998 the rate should also be the same as inflation-but those loans have an "exceptional circumstances" clause. It means when the bank base rate is low (now 0.5 per cent) they pay that plus one per cent-so they're now paying just 1.5 per cent interest.

The reason it's set at inflation, the rate prices rise, is so you don't pay any REAL interest. Thus, borrow £1,000 which would buy ten shopping trolleys worth of goods, and you'll only pay back whatever the same ten shopping trolleys cost in the future, so your purchasing power isn't diminished.

So why the potential loan SHRINKAGE? Well this March's inflation rate was NEGATIVE, minus 0.4 per cent, meaning loans should shrink from September.

RISING ISA LIMITS

With savers earning pitiful interest, the Government's upping the amount saved tax-free in cash ISAs from £3,600 to £5,100.

For most people it jumps next tax year, April 2010. Yet for over 50s it's from this Oct and those reaching 50 just after that get the increase on their BIRTHDAY. But don't hold off, open it now, then top-up when eligible. Current top-payer is Barclays Golden ISA at 3.61 per cent including a 12-month 1 per cent bonus. More at moneysavingexpert.com/cashisas

GET PAID TO CHECK YOUR CREDIT FILE

Sign up to free one-month "credit- monitoring" trials from agencies Equifax and Experian and check your file.

Then cancel it at no cost, before the direct debit you set up kicks in after a month. Do it via specialist cashback sites topcashback.co.uk and quidco.com and they give you up to £7.

LOWER ENERGY PRICES

Finally this year we've seen energy prices drop, with all suppliers announcing cuts between January and April.

Then a week ago British Gas announced a 10 per cent electricity price cut, following its earlier 10 per cent gas reduction.

For many though, it's still worth switching, see moneysavingexpert.com/energy .

CHEAPER STANDARD MORTGAGES

With base rates slithering to just above 0 per cent, variable-rate mortgage holders are reaping rewards.

Shockingly, lenders' standard variable rate, which you revert to when special discount/fixed-rate deals end, are competitive.

This is a MASSIVE turnaround - they used to be so expensive everyone crossed the street to avoid them. Yet political pressure has seen lenders like LloydsTSB and Nationwide drop rates to just 2.5 per cent.

It means many with fixed rates about to end will see their repayments DROP, not rise.

Send your questions for publication to notw@moneysavingexpert.com .

TV Money Guru Martin Lewis is the creator of the Consumer Revenge website www.MoneySavingExpert.com which is packed with info on how to get more money in your pocket.

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