We all know that managing money can feel like navigating a maze, but what if some of the obstacles are lurking just out of sight? Whether it's small fees buried in the fine print or taxes you don’t realise you’re paying, they can slowly chip away at your finances.
The ban on hidden online fees
In recent years, the UK government has taken steps to crack down on the sneaky fees some companies have tried to hide in their online transactions. For example, before new regulations came in, it wasn’t uncommon for retailers to tack on unexpected charges during checkout, such as booking fees or hidden delivery charges. You might have thought you were getting a good deal, but by the time you went to pay, your total was higher than expected.
Thankfully, these days you’ll generally see the total price upfront, including taxes and any extra charges, so you can make a fully informed decision before clicking “buy.” Always check what’s included in the price before committing to a purchase, especially for larger expenses like holidays or concert tickets.
Taxes you don’t always notice
You probably already know about VAT, but did you realise that there are other taxes that could be draining your wallet without you even realising? Some taxes are built into the price of products and services you buy, so they can go unnoticed. For example, insurance policies and even some loans can carry additional tax-like charges that aren’t always obvious at first glance.
Everyday convenience that costs more
We all appreciate the convenience of modern payments, from grabbing a takeaway coffee to subscribing to services that make life easier. However, some of these conveniences can come with unexpected costs.
Credit cards can come with high interest rates and hidden fees, which can add up over time. But, used properly they can be a useful tool to improve your finances. For example, a credit card for bad credit could help rebuild your score if used properly and might mean you get access to lower rates in future. If you decide to apply for a product like this, use a price comparison website to compare your options and choose the right provider for you.
When pay rises don’t feel like it
Getting a pay rise feels great at first, but soon enough, you might notice that it doesn’t have the impact you were expecting. This happens when more of your wage gets swallowed up by higher income taxes, National Insurance contributions or other deductions. For example, if your salary increase pushes you into a higher tax band, you could end up with a larger gross income, but a smaller increase in what you take home.
If you’re unsure about how much extra you should be taking home after a raise, sit down and work it out. You might find that smaller, more frequent savings or adjusting your tax code can help mitigate some of the extra deductions.