Income protection insurance can provide a potentially vital financial safety net for families, yet it remains widely misunderstood or overlooked by many.

With rising living costs and economic uncertainty, safeguarding your income against unforeseen circumstances is more important than ever.

Let’s look at what income protection insurance is, why you might need it, when you might not, plus the key considerations when shopping for a policy.

Income protection explained

Income protection insurance is a policy designed to provide a regular income if you’re unable to work due to illness, injury, or disability.

Unlike other forms of ‘protection’ insurance, such as life insurance or critical illness cover, income protection focuses on replacing a portion of your earnings over an extended period, helping you maintain your lifestyle and meet financial commitments.

The way it works is straightforward. You pay a monthly premium to an insurer, and in return, the policy pays out a tax-free monthly sum – typically 50-70% of your pre-tax income – if you’re unable to work for a specified period.

Policies often have a waiting (or deferral) period, which can range from a few weeks to several months, during which you must be unable to work before payments begin. This waiting period can be tailored to your circumstances, with shorter periods generally leading to higher premiums.

Payments continue until you’re able to return to work, the policy term ends, or you reach retirement age, depending on the policy’s terms.

Some policies also offer additional benefits, such as rehabilitation support to help you return to work or cover for specific conditions like back injuries or mental health issues.

Income protection is particularly valuable for those whose financial stability depends on their ability to earn, offering peace of mind that bills, mortgages and daily expenses can still be covered during difficult times.

More from Edmund Greaves

Why you might need income protection

The primary reason to consider income protection is the risk of serious illness or injury that prevents you from earning an income.

In the UK, millions of people face long-term health challenges that disrupt their ability to work. Over 2.8 million people were economically inactive due to long-term sickness in 2024, according to the Office for National Statistics (ONS), a figure that highlights the vulnerability of relying solely on personal savings or statutory benefits.

Serious illnesses, such as cancer, heart disease, or mental health conditions, can strike unexpectedly, often requiring extended recovery periods.

Similarly, accidents – whether a car crash or a workplace injury – can lead to temporary or permanent disability, cutting off your income stream.

Statutory Sick Pay (SSP) in the UK provides only £118.75 per week (as of 2025) for up to 28 weeks, which is unlikely to cover most people’s living expenses, especially if you have a mortgage, rent, or dependents.

 Savings can quickly dwindle and benefits such as Universal Credit may not bridge the gap adequately. Income protection can provide a more substantial, reliable income, allowing you to focus on recovery without the added stress of financial hardship.

Self-employed individuals are particularly at risk, as they lack access to employer-provided sick pay. Freelancers, contractors, and small business owners often face immediate financial strain if they’re unable to work.

Even salaried employees may find their employer’s sick pay scheme, typically a few months at full or half pay, insufficient for prolonged absences.

Beyond health-related risks, income protection can also be a lifeline for those with significant financial commitments, such as young families or individuals with large mortgages. Losing your income could jeopardise family stability, making income protection an essential consideration for parents.

Reasons why you wouldn’t need it

While income protection is valuable for many, it’s not necessary for everyone. Certain circumstances may reduce or eliminate the need for a personal policy.

If you’re employed and benefit from a robust workplace protection scheme, you may already have adequate cover. Some employers offer generous sick pay packages, covering full or partial salary for extended periods, or provide group income protection schemes as part of their benefits package.

These policies, often cheaper due to collective bargaining, may make a personal policy redundant. However, it’s crucial to review the terms. Some schemes only cover specific conditions or have shorter payout periods.

Individuals with substantial savings or alternative income sources may also forgo income protection. For example, if you have enough in savings to cover living expenses for several years, or if you have passive income from investments, rental properties, or a pension, you may not need the additional security of a policy.

Similarly, those with a partner or family member who can fully support household finances during a period of illness might feel less urgency to purchase cover.

People nearing retirement or with no dependents may also find income protection less relevant. If you’re close to receiving a pension or have paid off major debts like a mortgage, the financial impact of losing your income may be minimal. Additionally, some policies don’t cover individuals over a certain age, typically 65, which aligns with retirement for many.

Finally, if you work in a low-risk profession and have excellent health, you might perceive the risk of needing income protection as low. However, this assumption itself carries risks, as unexpected illnesses or accidents can affect anyone, regardless of lifestyle or occupation.

Things to look out for when buying a policy

Choosing the right income protection policy requires careful consideration to ensure it meets your needs and offers value for money.

Here are key factors to keep in mind:

Shop around: Premiums and policy terms vary widely between insurers. Use comparison websites or work with a broker to explore options from multiple providers. Look at the percentage of income covered, the deferral period, and any additional benefits, such as rehabilitation support or premium waivers during unemployment.

Consider speaking to an adviser: An independent financial adviser can help you navigate the complexities of income protection options, ensuring the policy aligns with your financial situation and goals.

Understand exclusions and eligibility: Insurers may exclude pre-existing medical conditions, mental health issues, or high-risk occupations (e.g., construction or professional sports). Disclose your full medical history and job details to avoid having claims denied later. Some conditions, like chronic illnesses, may preclude you from getting cover or increase premiums.

Check policy flexibility: Ensure the policy allows adjustments, such as changing the deferral period or coverage amount, as your circumstances evolve. Also, check whether premiums are guaranteed (fixed) or reviewable (subject to change), as this can affect the long-term affordability of the policy.

Cost vs. coverage: While cheaper policies may seem appealing, they often come with shorter payout periods or stricter terms. Balance affordability with comprehensive cover and explore policies with back-to-work support to reduce long-term costs.

In conclusion, income protection insurance is a crucial consideration for many in the UK, particularly those with dependents, significant debts, or no alternative financial safety net.

By understanding how it works, assessing your need, and carefully selecting a policy, you can protect your financial future against the unpredictability of illness or injury.

Always consult with professionals if you’re in any doubt and compare options to find a policy that offers both security and peace of mind.

Photo credits: Pexels

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On 2 April 2025, US President Donald Trump unveiled his ‘Liberation Day’ tariffs, a sweeping set of import taxes aimed at reshaping global trade and boosting American manufacturing.

The UK has been hit with a blanket 10% tariff on all imports to the US, with varying tariffs on particular industries such as automotive and pharmaceuticals – both significant exports for the UK economy.

Other countries and regions have been slapped with much higher rates, such as 20% on the EU and 34% on China. Considering the heavily interwoven nature of the global economy and supply chains, this could have significant effects on the UK regardless.

Here’s how it could impact your wallet, from the global economy to your investments and everyday costs.

The global economy

Trump’s tariffs signal a retreat from decades of globalisation, targeting countries with trade surpluses and imposing costs on imports.

Economists warn this could slow global trade volumes, a key driver of economic growth. For the UK, an open economy reliant on international trade, this isn’t just a distant concern.

If major trading partners such as the US, EU, or China stumble into recessions – or retaliate with their own tariffs – demand for British exports could weaken, indirectly hitting jobs and growth here.

Much also depends on how the UK Government responds to the tariffs. If it chooses not to retaliate it could dampen the overall impact. Tariffs affect the buyer country – this means US consumers will end up footing the bill for their imports. UK consumers will only be hit upfront if the UK Government chooses to impose retaliatory tariffs.

If the UK maintains a low-tariff environment on its imports it could also prove a favourable alternative market for countries such as China, which could have a positive impact on prices as surplus goods come here instead.

Further, with the EU – a closely associated economic bloc – could see some companies look to base in the UK due to its more favourable tariff levels with the US. This could be good for UK growth and employment.

More from Edmund Greaves

Investments: uncertainty hits the markets

If you’ve got money in stocks or pensions, brace for turbulence.

Global markets shuddered after Trump’s announcement, with US stock futures dropping sharply and European indices like the FTSE 100 feeling the strain.

This is down to a mixture of effects. Tariffs could dent corporate profits, especially for firms reliant on international supply chains- think carmakers or manufacturers.

However, there’s a silver lining: if the UK dodges the worst of Trump’s wrath, some investors might see Britain as a relative safe haven, potentially boosting demand for UK assets.

Still, higher borrowing costs and trade war fears could weigh on your portfolio’s value in the short term. As ever, diversification is important, as is not panicking in the face of short-term turmoil.

Inflation and interest rates: a global price push

Across the Atlantic, Trump’s tariffs are set to hike prices for American consumers as importers pass on costs.

This matters for Brits because global inflation tends to spill over. If US interest rates stay high to combat this – thanks to the Federal Reserve’s mission to fight inflation – global borrowing costs could rise too.

Higher US rates often push up yields on UK Government bonds (gilts), increasing the cost of everything from mortgages to Government debt.

For Brits, this could mean pricier loans or credit card bills if the Bank of England is forced to follow suit.

UK economy, inflation, and interest rates: a mixed bag

The UK’s direct hit is a 10% tariff on exports to the US, our largest single-country market for goods such as cars. This could cost jobs and slow growth in these major sectors and lead to higher inflation levels thanks to a strong dollar.

Yet, there’s a twist: if US tariffs divert cheap goods (such as Chinese steel) to the UK, prices for some items could fall, easing inflation in some areas.

The picture here is very murky, which is why investment markets are responding very nervously. We won’t know the full effect of the Trump tariffs on the UK economy for some time.

It is clear though that the UK is facing major challenges already – this clearly isn’t going to help.

What can you do?

Trump’s tariffs are a gamble with global stakes, and our personal finances aren’t immune.

Keep an eye on your investments – ensure your risk is spread carefully across sectors or regions less exposed to trade wars.

If inflation creeps up, locking in fixed-rate deals on loans or savings could shield you from rising costs. And while the UK Government negotiates to soften the blow, staying informed will help you navigate the uncertainty.

Liberation Day may be Trump’s vision, but its fallout is everyone’s reality. Keep a cool head in the meantime.

This article is for informational purposes only and should not be considered financial advice. If in doubt, seek professional advice.

Photo credits: Pexels

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What do you want from your retirement? It’s a big question. The younger you are, the harder it might be to have a clear picture in your head.

There are plenty of stock responses we’re all probably conditioned to consider:

• “Take a cruise!”
• “Travel the world!”
• “Buy a house with a sea view!”
• “To the Lamborghini show room!”

But retiring plans don’t have to be ambitious. Having a plan, or at least a vague idea, is worthwhile though.

For my part, I have an image of a comfortable (and easy to maintain) country cottage, with a patch out back big enough for some chickens (and a labrador).

A nice study with a leather chair where I can read and write (and probably fall asleep in) with a cosy fireplace.

In short, I want somewhere quiet, self-sufficient and sustainable.

I love to travel, visit new places and learn about new cultures. But truly, I don’t think I want to have to do that when I’m 70.

I want to take my son to these places and open his eyes to the wide world out there while he’s still young. And I want to be able to do things while I’m still spritely enough to enjoy them too.

What does that mean in practice? It means I don’t have to be so hard on myself while I’ve still got something like youthful vigour. I have very little interest in living in penury in order to maximise my cash pile when I’m geriatric.

All too often, the message is rammed down our throats by financial services and Government alike that we need to plan for infinitesimal retirements where we could live to be 150 and need barrels of money to keep us going. But it’s not true.

What you need is a plan and a sustainable way to achieve that without making your life a total misery.

And once you reach some of those goals (or at least, the financial equivalents therein), you need not be so worried about using the resources you’ve built to actually go out and have the life you want to live.

Ask our experts your money questions

This was the subject of this week’s podcast with guest Dan Haylett. Dan has some very enlightening views on why people should actually set out to enjoy their hard-earned wealth instead of sitting on a pile of gold coins like old Tolkien’s Smaug.

But if for nothing else, the problem with sitting on all that money forever is financial firms love it because they can keep charging fees, while the Government loves it because you’re not their problem if you take care of yourself (despite the fact your taxes paid for others to enjoy those same benefits today).

I really loved Dan’s suggestion in our podcast catch up that you should break the journey down into much smaller steps. Where do you want to be in nine years? What about three? Keep pushing forward but don’t let the horizon be so far off that it seems like you’ll never get there.

Make a plan. It doesn’t have to be exact, but have one. Even if it’s just a general direction of travel, so to speak. Future you will thank you. My future chickens, Henrietta, Mildred and Prudence will thank me too.

Photo credits: Pexels

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Today I’m featuring a tax-saving opportunity that may potentially be of interest to many Mouthy Money readers.

The tax-free trading allowance is a benefit for UK residents looking to earn extra income from trading or side hustles without worrying about declaring that income to the taxman (initially at least). 

This allowance – sometimes referred to as the trading income allowance – provides a threshold below which individuals can earn a certain amount from trading activities without needing to report it to HMRC or pay tax on it. 

Let’s explore what the allowance is, how it works and how to maximize its benefits.

What is the tax-free trading allowance?

The tax-free trading allowance, introduced in 2017, allows individuals to earn up to £1,000 per tax year from trading activities before paying income tax on it or declaring it. 

This allowance is available to any UK resident engaged in casual trading or so-called side hustles. It can be claimed by hobbyists, self-employed individuals, and even those in formal employment.

Who can use the allowance?

The trading allowance is available to:

Self-employed traders: Those earning casual income from selling products or services. That might include small-scale eBay sellers, people running craft stalls, those hiring out power tools or other items, or anyone else offering goods and/or services for profit.

Casual workers: People who supplement their income providing services such as gardening, lawn-mowing, DIY and repairs, dog walking, babysitting, and so on.

Gig economy workers: This would include driving for ride-sharing companies and delivery services, market research, mystery shopping, and other types of gig work.

Hobby traders: People who trade primarily as a hobby (e.g. sellers of handmade crafts or collectibles) without it being their primary income source. Freelance writers and photographers who occasionally sell work would also fall into this category.

This allowance is not limited by age or employment status, so it’s open to anyone over 18 in the UK who meets the criteria.

How does the tax-free trading allowance work?

The allowance allows individuals to earn £1,000 in trading income without the need to declare it to HMRC. Here’s a quick breakdown of how it operates.

Income below £1,000: If you earn less than £1,000 from your trading activities, you don’t need to report this income to HMRC, nor do you have to pay any tax on it. For those with low-income side businesses, this is especially useful as it minimizes the burden of income tax and cuts the need for form-filling and bureaucracy.

Income above £1,000: If your trading income exceeds £1,000, you have two options:

• Deduct allowable business expenses from your trading income and pay tax (if due) on your net income.
• Use the £1,000 trading allowance as a flat deduction from your gross income and pay tax on the remainder.

It’s important to note that you cannot claim both the £1,000 allowance and business expenses. You must choose one or the other.

How to claim the tax-free trading allowance

If your total trading income is under £1,000, no action is required. You do not need to register as self-employed or complete a self-assessment tax return. If you already do this, you don’t need to record this income on the form.

However, if you earn over £1,000 and wish to claim the allowance, you will need to:

Register for self assessment: Register with HMRC as self-employed if you haven’t already. You can do this online, and it’s essential to complete this step if you’re earning above £1,000 a year from trading activities.

File your tax return: Report your income through a self-assessment tax return and select the trading allowance instead of claiming business expenses. An accountant will advise you about this if required.

Choose the better option: Decide between claiming the allowance and deducting expenses. If your expenses are relatively high, it may be more tax-efficient to deduct them from your gross income rather than the trading allowance.

Maximizing the benefits of the trading allowance

Here are some tips on how you can make the most of the tax-free trading allowance:

Test a new business idea: The allowance is ideal for experimenting with a new business idea or side gig, as it gives you a hassle-free buffer period while you test profitability. If it doesn’t work out, nobody need ever know.

Keep accurate records: Ensure you keep records of your income, even if below £1,000, to provide clarity if questioned by HMRC. Record your expenses as well, in case you end up earning more than expected and need to register as self-employed.

Deduct the allowance if beneficial: Calculate if it’s more advantageous to deduct business expenses or use the £1,000 allowance. Some people find that opting for the allowance saves them more in tax, while for others deducting expenses from their gross income works out more tax-efficient. Be aware that you cannot use the tax-free trading allowance to create a taxable loss to offset against other income sources.

What about property businesses?

If you also (or alternatively) make money from a property-related business, the good news is that alongside the tax-free trading allowance, the government also provides a separate £1,000 tax-free property allowance. 

This allowance applies specifically to people earning a small income from property-related activities. That includes such things as renting out a room, letting out your driveway or garage, or short-term letting via platforms like Airbnb.

This allowance operates similarly to the trading allowance, allowing individuals to earn up to £1,000 per year of property-related income without needing to declare it or pay tax on it. 

It’s possible for an individual to benefit from both allowances. For instance, if you earn £1,000 from a small sideline business and £1,000 renting out a spare room or parking space, you can use both allowances and keep up to £2,000 tax-free.

Common questions 

1. Can I claim the trading allowance (or property allowance) on top of my personal allowance?

Yes, the trading allowance is separate from your personal income tax allowance (for most people this is £12,570 as of the 2024/25 tax year), meaning you can still earn other types of income tax-free up to this threshold.

2. Can I claim the allowance if I’m employed full-time?

Absolutely. The trading allowance is available to everyone regardless of employment status. It’s a way to encourage side businesses and casual trading.

3. What if I have multiple income streams?

The allowance can cover different income streams, but each individual can only claim one £1,000 trading allowance and one £1,000 property allowance per year. 

So if you make £500 a year mowing lawns and £400 a year from online surveys, you can claim the total £900 tax-free under the trading allowance. But if you make over £1,000 in total that wouldn’t be the case and you would have to declare this as self-employed income.

4. What records do I need to keep?

While there are no strict rules about record-keeping, it’s important to track your earnings carefully to ensure you remain under the £1,000 threshold and accurately report any income over it. 

Even if you don’t exceed the £1,000 allowance, maintaining records of your income and business expenses is good practice and will make life much easier if your sideline business turns out to be more profitable than expected.

5. Where can I find more information?

If you’re unclear about any aspect of the tax-free trading or property allowances, the official government website should be your first port of call. If you’re still uncertain, I strongly recommend speaking to a qualified accountant. Tax can be complicated and everyone’s circumstances are different. A good accountant will be familiar with the rules and (just as important) how they are typically applied by HMRC.

Closing thoughts

The trading allowance is a flexible, tax-free cushion that can help you profit from casual trading or side gigs without added tax burdens. 

Whether you’re selling a few items online, earning from a hobby, or doing a few odd jobs for profit, it can help you keep more of what you earn and keep admin to a minimum. It can also be a great way to test out sideline money-making ideas, as regularly discussed in Mouthy Money.

By understanding how it applies to your activities, you can make the most of this valuable allowance and hopefully turn your side ventures into profitable additions to your income.

As always, if you have any comments or questions about this article, please do leave them below. But please note that I am not a qualified financial adviser and cannot answer specific queries about your personal tax circumstances.

Nick Daws writes for Pounds and Sense, a UK personal finance blog aimed especially (though not exclusively) at over-fifties.

Photo credits: Pexels

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Today I’m spotlighting a piece of official data about you that might seem dry and boring, but is actually crucial to ensuring you don’t pay more tax than you need to.

Your tax code is set by HM Revenue and Customs (HMRC). It determines how much income tax is deducted from your salary, wages or pension before you receive it. 

Understanding your tax code and ensuring its accuracy can prevent you from overpaying (or underpaying) tax.

What is a tax code?

A tax code is a combination of numbers and letters that helps your employer or pension provider calculate how much tax to deduct from your income. 

For example, a common tax code for the 2024/25 tax year is 1257L. This indicates that you are entitled to a tax-free personal allowance of £12,570, with tax due on any income you receive over this. 

The letter in your tax code provides additional information about your circumstances, such as whether you have more than one source of income or are being taxed on an emergency basis.

How to find your tax code

Your tax code can be found on any of the following:

• your payslip

• your P60 or P45 (for those who have changed jobs or retired recently)

• letters or emails from HMRC

• your personal tax account on the HMRC website

Deciphering your tax code

Here’s a breakdown of what the numbers and letters mean:

Numbers: Multiply the number in your tax code by 10 to calculate your tax-free allowance. For example, 1257 means you can earn up to £12,570 a year tax-free.

Letters: These Indicate specific circumstances. 

L: standard personal allowance

M: you’ve received a marriage allowance transfer

BR: all income is taxed at the basic rate (20%)

NT: no tax is deducted from your income

S: taxpayers living in Scotland

C: taxpayers living in Wales

More from Nick Daws on Mouthy Money

Common reasons for incorrect tax codes

Your tax code might be wrong if any of the following apply:

• you’ve started a new job

• you’ve received a pay rise or bonus

• you’re receiving income from multiple sources

• you’ve claimed or stopped claiming benefits like marriage allowance

• HMRC hasn’t been updated about changes in your circumstances, such as retirement or moving abroad

What to do if your tax code is incorrect

Check your tax code: Review your payslip and/or other relevant documents to confirm your tax code.

Use the HMRC tax code calculator: This tool is available on the HMRC website. It  can help you determine if your tax code is correct, based on your circumstances. It will also reveal your annual tax-free allowance.

Contact HMRC: If you suspect an error, contact HMRC directly. You can do this by any of the following means:

• call 0300 200 3300

• use the online chat service on the HMRC website

• update your details through your personal tax account

When contacting HMRC, have the following information ready:

• National Insurance number

• details of all income sources

• recent payslips or P60s

Of course, if you have an accountant, you may prefer to ask him or her to handle this for you. Accountants are well accustomed to dealing with these matters and will normally be happy to call HMRC on your behalf.

Adjustments and refunds

Once HMRC updates your tax code, your employer or pension provider will use the new code in your next payslip. If you’ve overpaid tax, HMRC will issue a refund automatically or else adjust your tax deductions in future months.

Preventing future errors

To avoid future tax code errors:

• inform HMRC promptly about changes in your income or circumstances

• regularly check your payslip and tax code notifications

• use your personal tax account to keep track of your tax records

By staying proactive and understanding your tax code, you can ensure your finances remain in order and avoid any unpleasant surprises when it comes to your taxes.

As always, if you have any comments or questions about this article, please do leave them below. 

Nick Daws writes for Pounds and Sense, a UK personal finance blog aimed especially (though not exclusively) at over-fifties.

Photo credits: Pexels

The post How to check your tax code and correct it if necessary appeared first on Mouthy Money.

Is your bank account feeling deflated? There are many small and painless ways to rein in your spending, so here’s how to be more frugal and save money in 2025.

1# Take time to write a budget

Writing down your monthly budget is a dull but essential step in taking control of your finances. Note your income and fixed outgoings, then set a budget for your variable spending. If you have never made a budget, start here.

2# Save for annual expenses

As part of your budget, create sinking funds for annual expenses such as your car breakdown cover, MOT costs, birthdays and Christmas. Everyone should have an emergency fund of at least £1000, so don’t forget to include this in your monthly budget. (Here is why you need one.)

3# Have a no-spend January

Aim to buy only essentials during January. A no-spend month means you can pay your bills and buy groceries, but you don’t allow yourself any extraneous spending. That means no new clothing, no nights out, no coffee on the way to work, no book buying, etc. It sounds grim, but it’s only for a month and your bank balance will look much healthier in February.

4# Use cash

If you struggle to stop impulse purchases, decide what you can afford to spend for the week and take out cash. Hide your debit cards and temporarily disable Apple Pay. 

It is much harder to part with cash than to flash your card or phone.

5# Keep track of your spending

Another way to curb impulse purchasing is to record all of your spending, either in a small notebook or on an app. Set a reminder to do this at a set time of day or as you go along. This exercise can reveal where your money goes and where you can save.

6# Unsubscribe from retailers’ newsletters & apps

At this time of year, your inbox will be full of offers and sales. But a bargain is only a bargain if you can afford it and need it, so unsubscribe from as many newsletters as possible to avoid temptation.

Food takeout apps are also worth deleting to save money.

7# Cancel subscriptions you don’t use

Look hard at your subscriptions, from streaming services to meal kits, from wine boxes to beauty collections. Do you use them frequently enough to make them worthwhile? Or do you end up with excess food or makeup you don’t use, or channels you rarely watch? Most importantly, can you afford them? Be honest and cancel any you can do without. This also applies to magazines, newspapers and other media.

8# Give up smoking or vaping

New year, new you? January is a great month to quit smoking or vaping to improve your health and your bank balance. 

9# Start meal planning

You can save a lot on your grocery bill, and avoid food waste, by carefully planning your meals, and then creating a shopping list so you buy only what you will eat.

Don’t forget to include a few snacks and treats as part of your regular grocery shop. This saves multiple trips to convenience shops in between when you fancy a bar of chocolate or a bottle of wine.

10# Eat seasonally

 Seasonal food is plentiful and therefore usually cheaper. Take advantage by planning your meals around supermarket specials and what’s cheapest now.

There is a guide to seasonal produce in the UK on the National Trust website.

11# Make the most of your freezer

Freezers are great money-savers, enabling you to store leftovers, do some batch cooking, buy larger packs of food more cheaply, and take advantage of yellow sticker items you won’t eat before the use-by date.

12# Do your grocery shop later

Go to the supermarket in the evening. Get to know when food is reduced and when to find the best reductions in each store.

13# Join Olio

Olio is a food-sharing app that allows you to access free food that would otherwise go to waste. It mainly comes from retailers, but individuals give things away too that they can’t use quickly enough.

It is excellent for bread, cakes and snacks, so useful if you have a hoard of hungry teenagers.

14# Learn to repair your clothing

Learn some basic sewing skills so that you can keep your clothing looking good for longer. This useful website will get you started.

15# Home hairdos

YouTube has tons of videos on home haircutting if you are feeling brave! Certainly, colouring your hair isn’t difficult and can save you a lot of money.

If this is too much of a challenge, find a hairdressing college for a super cheap (or potentially free) hairdo.

16# Get inspired

If you are feeling stuck looking for ways to be more frugal and save money in 2025, here are some brilliant books to inspire you. Get them from your library for free! 

The Complete Tightwad Gazette: Promoting Thrift as a Viable Alternative Lifestyle, Amy Dacyczyn

The Moneyless Man: A Year of Freeconomic Living, Mark Boyle

Your Money or Your Life: 9 Steps to Transforming Your Relationship with Money and Achieving Financial Independence, Vicki Robin & Joe Dominguez

And, a cheeky one from me to finish …

Extreme Frugality: Save Money Like Your Grandma, Jane Berry

Photo credits: Pexels

The post 16 ways to be more frugal and save money in 2025 appeared first on Mouthy Money.

Finally there appears to be a backlash against the hyperconsumerism we have seen in recent years.

People are being urged to use what they already have, to buy only what they need, to make do and mend and to live more sustainably.

This is a trend I have noticed gaining popularity across social media platforms. The hashtag #underconsumptioncore is everywhere, but what does this mean in practice?

Is it a movement that will grow or just a new bandwagon for influencers to jump on for views?

On Instagram and TikTok, people are proudly showing off their mugs and plates that don’t match, their thrifted decor, their small but functional homes, how they grow and preserve some of their own food and how they are using up their cosmetics and toiletries before they buy more. 

Young content creators are displaying their battered reusable water bottles, telling followers how long they have had their clothing and showing the items they have upcycled to extend their use.

They are talking about how embracing the underconsumption movement frees up money, alleviates the stress of keeping up with the Joneses and gives them a greater appreciation of life’s simple pleasures.

More from Shoestring Jane

How to be an anti-consumer

Rethinking your habits and embracing the underconsumption trend means trying to avoid single use plastics and other single use items, wasting less, buying quality over quantity, thrifting and shopping second-hand, and repairing items rather than throwing them out.

Becoming an anti-consumer will lead you to search for ways to curb your current spending habits, to simplify your lifestyle and to find ways to live more sustainably. You will become savvy to the tricks that companies use to constantly make you feel you need to spend money and get wise to their green-washing tactics.

It means being deliberate about what you buy and where you buy it from and making far fewer purchases.

For example, with Christmas approaching, you might choose to purchase hand-crafted gifts from a small Etsy seller rather than cheaply-made plastic items from a multinational conglomerate, to make some of your own presents, or to reduce the number of gifts you give altogether. 

Maybe you will pare down the contents of your makeup bag to the bare minimum. When you feel you need to make a purchase, you might decide to buy cosmetics from a small company with minimal glass packaging instead of one of the numerous products encased in plastic from big corporations such as L’oreal.

Or you might realise that items like face sheet masks, false eyelashes, cleansing wipes or lip exfoliators are entirely unnecessary and a waste of your hard-earned money.

You might choose to develop low-impact hobbies and pastimes such as hiking, crafting and upcycling, gardening or cycling, proving that you can have a good time without spending a load of money or creating lots of waste.

You will find yourself perusing the racks of used clothing in your local charity shop when you need something, instead of buying a new, mass-produced fast fashion item from Shien or Temu.

Normalising what should already be normal

Personally, I love this trend! It is, of course, what us frugal types have been doing for years to save money, but if the younger generation is being encouraged to embrace a more thrifty and sustainable way of life this must be a good thing, both for the planet and for their bank balances.

In reality, this lifestyle is what used to be normal. When I grew up in the 1970s, people bought what they needed and made things last because they had to. Not many people had the means or opportunity to buy to excess.

I think the underconsumption core trend could be a huge catalyst for change. By mindfully consuming you may be able to pay off debt, save for a home, invest or quit a high-paying but stressful job for an occupation that pays less but gives you more enjoyment.

Once you stop overspending and comfort buying, you probably won’t want to go back to constantly purchasing new stuff. You may completely shift your perspective on how you spend your money and how you spend your time.

I don’t know for sure if the rise of the anti-consumer stems from the state of the economy or from the realisation that we live on a small planet with finite resources. Maybe it is a reaction to social media influencers with their constant hauls and conspicuous overconsumption. Whatever the drivers are, let’s hop on the trend and hope it continues.

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The festive season is fast approaching and it might appear that the whole world has gone into a spending frenzy.

But at a time when many of us don’t have endless resources, the idea of spending our hard-earned cash on presents recipients don’t appreciate feels like anathema. So, how can we buy Christmas gifts people actually want?

According to a poll by the Post Office in 2023, almost a third of consumers planned to return some of their Christmas gifts. This was partly down to financial pressures caused by the cost-of-living crisis, but many of those polled said the items were not wanted or wouldn’t be used.

The most common items being returned, sold, regifted or donated were clothes and shoes, beauty items, books and stationery.

I like to think I take a more mindful and well-considered approach to gift buying than I used to. No more rushing around at the last minute chucking gift sets into my basket. I would rather buy nothing than give a present likely to be donated to a raffle in a few months.

On the flip side, wouldn’t we all like to receive gifts with thought and love behind them? A small, well-thought-out present will be more welcome than something expensive but unsuitable. But how can we get our gift-giving right?

What NOT to buy

I asked members of my Facebook Group, My Second Hand & Frugal Life, what their least welcome gifts have been.

They disliked being given items for the home or last-minute petrol station panic buys (and – take note – most of these seemed to come from EX-partners!).

Someone received a vacuum cleaner from her husband for their first Christmas together who was bewildered when she cried. Another received knickers and Tampax, and Paula had replacement foot mats for her car …

Seren dislikes ‘tat’: “Any ornaments, uplifting quotes on plaques, cheap boxed sets of toiletries … scented candles that smell of food (coffee, cranberries, cinnamon, etc).”  Candles came up several times as an unwelcome gift, as did “pointless, sentimental ornaments.”

Buying toiletries is a minefield, as many people have sensitivities and allergies, or only use particular brands. As well as the afore-mentioned gift sets, bubble bath, shower gel and hand cream got the thumbs down. However, these can work if you know what people like. Diane, for example, loves to receive body butter and bath bombs.

Catherine doesn’t appreciate being given clothes that don’t fit her or aren’t her style, and Kerry dislikes festive clothing that she only has a few days to wear. Jilly especially does not like gimmicky socks. “They are always poor quality and can cut your feet.” Joke slippers were another gift seen as a waste of money.

Be careful with edible gifts, too. Christine doesn’t want to receive “Edible gifts, because I’m a coeliac and also intensely dislike coffee and nuts.”

Rachel is not a fan of “anything that is sold ready-packaged as a gift (as there has been) no thought put into it at all.”

The group was split on receiving alcoholic drinks like bottles of wine. Some said they would love them, but others didn’t drink or didn’t enjoy the taste of certain products.

If you are considering alcohol, make sure you know what your recipient likes drinking. Michelle says the only drink she enjoys is a dry white wine, so she doesn’t appreciate receiving “mulled wine or liqueurs such as that famous Irish cream…”

Sami says that because she has a cat she receives things like “cat playing cards, a make your own cat food recipe book and a ‘how to speak cat’ book. Please just get me a bottle of wine!”

So…which Christmas gifts do people actually want?

The thread on my group was revealing. Some presents I thought would be fail-safe, like gift vouchers, were disliked by as many members who said they would appreciate them. 

Many people said they would welcome experience gifts. However, my partner once received a zorbing experience (where you get bounced down a hill in a huge bubble) when he had a herniated disc, so approach with caution!

Rachel prefers people asking what she would like: “I hate spending money on myself, and the thought of spending £50 on a Dermalogica cleanser and moisturiser pains me, but it’s so lovely to get it from someone else.”

Susan has written a list for her family which consists only of gardening or sewing gifts.

Research is key to buying successful Christmas gifts. Take some time to find out what people really want. If you prefer to surprise your recipient, ask their nearest and dearest for some ideas. Otherwise, ask them directly for a list of suggestions. 

You could also use an app such as the Giftster app, which allows you and your group to create wish lists, or Elfster, which is great for a Secret Santa draw.

Do you need to buy gifts at all?

Carolyn says, “I cannot see the sense of buying gifts … just because it is Christmas. As one gets older we have mostly what we need so our present at Christmas is your presence.”

Natalie agrees: “ I would prefer to go out for the day and make memories. They are more precious than any gift.”

Yvonne says she detests “the whole thing of ‘I have to buy/make a gift for xyz. So many are not required or appreciated and the whole gift-giving process is completely out of hand.”

Susan has a different approach: “I started a trend years back with my two boys that we could only spend £5 and it had to be from a charity shop. Always fun to see what we get.”

If you dislike the massive commercialisation of the season, or if you simply cannot afford to join in the gift-giving, then perhaps it is time to take a step back and either reduce your gift purchases to the bare minimum or stop participating altogether.

I would love to know your thoughts on this, and on how to buy Christmas gifts people actually want. What’s your approach to festive present giving?

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Inflation is a financial concept that describes the overall increase in the prices of goods and services within the economy over a specific period. When inflation occurs, the purchasing power of money declines, meaning that the same amount of money can buy fewer goods and services compared to a previous time period. 

In the UK, inflation is typically measured as an annual percentage change in the Consumer Prices Index (CPI), Consumer Prices including Housing (CPIH) or the Retail Prices Index (RPI). These indices track the average price changes for a basket of goods and services commonly purchased by households. 

Inflation is influenced by a variety of factors, including changes in consumer demand, fluctuations in supply chain costs, government fiscal policies, and global economic conditions. Central banks, such as the Bank of England, play a crucial role in managing inflation. They often set interest rates and employ other monetary policy tools to control inflation and promote economic stability. 

A moderate level of inflation is generally considered normal and can be conducive to a healthy economy. It encourages spending and investment while preventing deflation, which is a sustained decrease in the general price level. However, excessive inflation can erode the value of money, disrupt economic planning, and lead to uncertainties in financial markets. 

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Q Is there any point in buying pet insurance for my eight-year old cat? 

A Cats can live for 20+ years so we would recommend buying pet insurance for your eight-year-old cat if you can.

In fact, regardless of their age, we would generally recommend owners buy pet insurance if possible as unexpected veterinary bills can be costly and understandably many owners would not be able to find several thousand pounds should their pet become seriously unwell or injured – which is the reality if you don’t have insurance.  

Pet insurance gives you peace of mind that you don’t need to compromise on vital vet treatment for your pet. 

As pet insurance prices increase with age the premium will be more expensive, this is because as your cat gets older the risk of them developing a health condition increases.  

You are also likely to have to pay a percentage of any claim as well as the excess when insuring an older pet. It is important to think if this is something you will be able to afford before you buy a policy. 

It is also important to do some research to find out what different providers cover as there are many different policies with different levels and lengths of cover. Some may have upper age limits on new policies too – for cats, this is generally from eight weeks of age up to their 10th birthday but each policy provider may differ.  

If your eight-year-old cat has a pre-existing condition, for example kidney disease, which can be common in older cats, then it is important to understand that most insurance will not cover pre-existing conditions so you will need to cover those costs yourself. This is why we recommend thinking carefully before changing a policy for an older pet with pre-existing health issues.  

Always be honest about your pet’s previous health issues and make sure you understand the exclusions on the policy before committing to anything.   

If you’re struggling to find a policy which will cover your old cat with any pre-existing conditions, it’s worth chatting to your vet as some practices will offer payment plans so that you can pay vet bills in instalments rather than one lump sum.   

Like all payment services this is subject to strict financial services, so not all practices will be able to offer this service and it will only be suitable in some situations. Some charities such as the PDSA and Blue Cross also offer financial assistance for veterinary care for those who are eligible.  

If your cat requires on-going medication and you’re struggling to pay the costs, vets can write a prescription to use online or take to a pharmacy where the price may be lower. Your vet will need to charge for writing the prescription, which goes to help the running cost of the clinic, but buying some medication this way can still reduce overall costs. 

Another option is to put some money into a separate savings account in case of unexpected health issues with your cat.  

Veterinary treatments have advanced so much in recent years, which mean that previously untreatable conditions are now more manageable. However, as there is no NHS for pets all these advances come with a cost.

Sometimes there are less costly options available, but these may not be as effective, for example. It is really important to be open with your vet about any cost limitations and accept that the treatment available may be more limited.

It is important not to feel guilty about this, but to focus on the best outcome for your cat’s wellbeing that is available within the funds you have.  

Caroline Allen is the Chief Veterinary Officer at the RSPCA where she has worked for over eight years. Caroline spent nearly twenty years as a GP vet in London before she joined the RSPCA. She is a trustee of the BVA- Animal Welfare Foundation. She studied veterinary medicine at the University of Cambridge and has a one year old rescue dog, a lurcher called Jess. 

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