Another year has begun, but for residents across the UK this means facing new challenges as the year unfolds.
In addition to rising inflation, energy bills are expected to rise by 1% this January, while Council Tax will increase by up to 5% in April, and water bills are set to rise by 20% in the same month.
Aatif Malik, director at Tax Accountant, comments on the situation: “The increase in the price of several bills, as well as rising inflation, will undoubtedly present many challenges for the British in 2025. Financial education has never been more important, as individuals and families will need to proactively assess their financial situations and implement new strategies to make ends meet every month.”
The financial expert has put together four practical tips to help Britons save money and avoid a financial strain throughout 2025.
Map out your expenses and sources of income
The first step towards a healthy financial situation is mapping out your monthly expenses and all your sources of income.
Malik suggests putting it all on a spreadsheet, such as Excel or Google Sheets, and categorising your expenses into essentials like housing, utilities, and food, and non-essentials like entertainment and subscriptions.
Look for better deals everywhere
With energy and water bills set to rise no matter the provider, you can still find more competitive rates for electricity, gas, water, and even broadband services, as many suppliers offer discounts for new customers or bundled services.
“This can also be applied to subscription plans you currently have, as competing companies could be offering better deals. Consider cancelling your current plan and setting up new shared accounts in your friends’ or family members’ names, as many of these companies offer a free trial or promotional price for new users,” suggests Malik. “Another option is cancelling and then resuming your own subscription. Spotify, for instance, is currently offering an £11.99 deal for three months as a welcome-back offer for individuals wanting to resume their premium account by 31 December. It may not be much, but any saved penny counts.”
Be efficient with your household spending
“We are not talking about turning off your heating and freezing during the winter,” explains Malik. “Simple actions, like replacing incandescent bulbs with LEDs, unplugging devices when not in use, and using energy-efficient appliances can make a big difference at the end of the month.”
This also applies to water expenses, as bills are set to rise in April. The expert suggests installing water-saving devices, such as a greywater diversion system to reuse washing machine water for toilet flushing and a low-flow showerhead, and being mindful of water usage in general.
Maximise your sources of income
There are many ways you can increase your sources of income, but some of the most practical ones are taking on some freelance projects or part-time opportunities.
You can also consider monetising your hobbies. Do you like knitting or crocheting? Why not start selling some handmade jumpers or amigurumis online? Or if you’re good at doing small household repairs, you can offer to help those who need the service in exchange for a small fee.
“Another way of making some extra cash is renting out rooms or parking spaces you are not currently using,” adds Malik.
Extra tip: set up an emergency savings account
It’s not always possible to have some leftover cash at the end of the month, but if you do manage to save some after paying your bills and living expenses, you should consider putting it in an emergency fund.
You never know when some major life-changing event might happen, like being involved in an accident, having a household appliance break down, or losing your job.
“You should aim to have at least three to six months’ worth of living expenses saved, but start small. Whenever you have some disposable income by the end of the month, put it in the account. These small contributions will eventually grow and help you achieve greater financial stability,” advises Malik.