Could your finances do with a spring clean?

A new tax year is here - so now's a great time to take a fresh look at your finances.

The start of the new tax year on April 6 has certainly given us plenty to consider, with a new personal savings allowance meaning that many people will no longer pay any tax on their savings interest.

Meanwhile, savers have another potential cash boost as investments with peer-to-peer (P2P) lenders can now be brought into ISA saving, with the launch of new Innovative Finance ISAs.

While the returns on offer from P2P lenders may be higher than what is on offer through a traditional bank or building society, unlike these providers, the cash invested through a P2P lender does not have the protection of the Financial Services Compensation Scheme (FSCS) if something goes wrong, so these investments will need careful consideration.

The new tax year has also brought the launch of the new state pension.

While you're mulling over the impact of these changes on your longer-term finances, you may also want to do some financial tidying now.

Charlotte Nelson, a finance expert at Moneyfacts.co.uk, says: "Regularly taking stock of your finances and highlighting any areas that need to be tackled is great for your financial health."

Here are some suggestions from Moneyfacts.co.uk on how to spring clean your finances:

:: Opt for a balance transfer deal

Nelson says, based on average card interest rates, it would take a borrower making fixed repayments of £100 per month three and-a-half years to pay off a credit card debt of £3,000. It would also cost them £1,183 in interest.

She says: "However, if you have an outstanding balance on your credit card, there's no need to pay expensive interest on the debt. Instead, consider getting a balance transfer credit card."

But if a transfer is made, borrowers must ensure the balance is repaid in full before the introductory deal ends to prevent interest adding to the bill.

:: Switch your current account

The seven-day switching service means customers no longer have to put up with poor service or expensive fees. Some current accounts pay up to 5% in interest - a rate that beats many savings accounts.

:: Don't let savings languish in poor accounts

Even though savings returns are generally poor, switching can still make a difference.

Nelson says: "Your cash can always work harder for you, particularly if you're sitting in one of the 131 accounts that currently pay 0.50% or less."

:: Saving for your first home? Opt for a Help to Buy ISA

Recently launched by the UK Government, these accounts offer a Government bonus of up to £3,000. To receive that, someone will need to have saved £12,000. Interest rates on these accounts are also relatively attractive, with some as high as 4%.

:: Going somewhere nice this summer?

When abroad, spending on your regular debit card can be a costly mistake. To avoid unnecessary charges and fees, consumers may want to consider opting for a credit card designed for use abroad to cover any extra spending.

:: Fix your mortgage rate

If you're sitting on your standard variable rate (SVR) or are coming to the end of a fixed rate deal, now's a perfect time to look for a better offer.

Borrowers can benefit from some of the lowest deals on record - and potentially save significant sums.

Nelson says that for someone with a £200,000 mortgage and a 25-year repayment term: "By opting for the average two-year fixed rate of 2.56% instead of staying on the average SVR of 4.81%, you would be £2,926.32 better off after just one year.

"By using the extra saved to overpay your mortgage you could also significantly reduce the length of your mortgage term."

WHAT... IMPACT HAVE THE NEW PENSION FREEDOMS HAD?

The first anniversary of the new pension freedoms for people aged 55 and over has just been reached.

Launched on April 6, 2015, the reforms mean people no longer have to use their pension savings to buy an annuity when they come to retire. Instead, they have more opportunities to take their pension pot how they wish. Generally, the first 25% of the pot is tax-free and the remainder is subject to tax.

So what impact have the changes had on people's plans? Well, new research from Prudential has found that 34% of people retiring this year say the reforms have boosted their retirement confidence.

There are also signs that the changes have had an impact for future generations of retirees. Research by Aegon UK found 15% of the working population are saving more into their pension as a direct result of pension freedoms - equating to 6.2 million people across the UK contributing more to their pension than they were in April 2015.

POUNDNOTES

Financial fact: Nearly two million UK adults do not have a bank account according to the Financial Inclusion Commission.

FIRST-TIME BUYERS' FURNITURE BLUNDERS REVEALED

Nearly one in three first-time house buyers purchase furniture before measuring up, according to research revealing common blunders made by people taking their first step on the property ladder.

The research from Co-Operative Insurance among 1,500 first-time buyers found 31% bought furniture before measuring the rooms in their new home properly.

Of these, one in four (25%) agreed it was a "nightmare" to get their furnishings into the property and one in 14 (7%) damaged their new home during the struggle to wedge the furniture in.

BUYING A HOME CHEAPER THAN RENTING 'IN NEARLY HALF OF CITIES'

Buying a home is more cost-effective than renting in nearly half of British cities, according to a property website.

Zoopla analysed the asking prices and rents of two-bedroom properties currently on the market in Britain's biggest cities.

It found that in 48% of cities, buying works out cheaper than renting, with Glasgow, Coventry, Birmingham and Bradford the top cities where buying is most cost-effective.

COULD THREE BE THE MAGIC NUMBER FOR MORTGAGE BORROWERS?

The choice of three-year fixed-rate mortgages has surged - and the average rate on offer has also reached a record low - according to a financial website.

Moneyfacts.co.uk said three-year fixes can offer "the perfect mix of security and a great rate".

It said there are 82 more three-year fixed rate mortgages on the market than there were two years ago, with 524 deals now available.

The average rate on a three-year fix across all the deals available is now 2.9%, compared with a typical rate of 3.97% in April 2014.

HIGH FIVE SAVERS

Provider, Contact, Gross, Min Inv, Account, Notice/Term, Interest Paid, Access,

Al Rayan Bank, 0845 6060 786, 2.78%, £1,000, Fixed Term Deposit, 24 month Bond, Quarterly, BOPT

Union Bank of India (UK) Ltd, 0207 332 4250, 2.35%, £1,000, Term Deposit, 2 Year Bond, On maturity, BPT

Fidor Bank, www.fidorbank.uk, 2.20%, £100, Savings Bond, 24 Month Bond, On maturity, O

Ikano Bank, www.ikano.co.uk, 2.15%, £1,000, Fixed 2 Year Saver, 2 Year Bond, Anniversary, O

Paragon Bank, www.paragonbank.co.uk, 2.00%, £1,000, Two Year Fixed Rate, 2 Year Bond, Anniversary, O

Access notes: B = Branch, P = Post, T = Telephone, O = Online

Source: Moneyfacts, www.moneyfacts.co.uk. (01603) 476 204 (all rates subject to change without notice) 7.4.16

TOP FIVE MORTGAGE RATES

Provider, Phone number, Rate, Fixed until, Max LTV, Min Fee, Incentive

Yorkshire BS, 0345 120 0874, 1.89% to 30.4.19, 65%, £975, No

Hanley Economic BS, 01782 255000, 2.29% to 31.3.19, 80%, £250, Yes

Saffron BS, 0800 072 1100, 3.97% to 31.5.19, 95%, Nil, No

First Direct, 0800 482448, 2.19% for five years, 75%, £1450, Yes

Leek United BS, 0845 219 0250, 2.95% to 30.6.21, £995, No

Source: Moneyfacts, www.moneyfacts.co.uk. (01603) 476 204 (all rates subject to change without notice) 7.4.16

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