3 helpful things that you can do with your loose change

In recent years, many people have moved towards using contactless card payments for most of their day-to-day purchases. This trend increased during the coronavirus pandemic, as many businesses stopped accepting cash payments altogether.

As a result of this, a recent study published by the BBC has found that around three in five people are holding loose change around their house. The survey estimates that Brits are accidentally hoarding as much as £50 million, just in coins.

If you’ve got some loose change laying around the house, you may want to put it to good use. Here are three helpful things that you could do with it.

1. Use it to teach your children the value of saving

If you have a large amount of spare change, one useful thing that you can do with it is to teach your children the importance of saving.

If you want your loved ones to be responsible with money when they grow up, it’s important to give them a helping hand in establishing a solid base of financial knowledge. According to the National Student Money Survey, 74% of people surveyed stated that they wished they’d had a better financial education when they were younger.

While piggy banks are a tried and tested method of teaching children about money, one fun thing you can try is the “penny saving challenge”. Essentially, this involves saving 1p on the first day, 2p on the second day, 3p on the third day, and so on for a full year.

While the savings start small, by the end of that year, the pot should contain an impressive £667.95, (or £671.61 if it’s a leap year!).

This can be a great way to demonstrate to a child how even small savings can quickly add up if they are dedicated.

2. Donate it to charity

Each year, UK charities help thousands of people in a variety of ways, but the coronavirus pandemic has disrupted this. Many have struggled with the double whammy of reduced donations and an increased demand for their services.

One of the main issues that charities face is that a significant portion of the public are now more hesitant than usual to attend fundraising events. A survey of 260 charities, published in the Guardian, stated that fewer than half expect to reach their pre-pandemic level of fundraising events by the end of 2021.

For example, the cancer charity Macmillan are expecting a £38 million shortfall in donations, largely due to the lack of in-person events.

At the same time as this fall in donations, a study published by Third Sector shows that two-thirds of charities have experienced increased demand for their services since July. That’s why, if you’ve got some spare change, there has never been a better time to do your bit and donate it to a charity.

3. Use it to build your wealth

Another good use of that money is to put it aside for your financial future as even if you only have a small amount, every little helps.

If you want to do this, one option you may want to consider is an Individual Savings Account (ISA). This is a tax-efficient way to build your wealth, as all growth is paid free from Income Tax and Capital Gains Tax.

Due to these valuable tax benefits, ISAs are a popular way to save. According to FTAdviser, Brits deposited £75 billion into them in the 2019/20 tax year. There are also a variety of ISA products that you can choose from, such as:

Cash ISAs

This is one of the most popular types of ISA available as they tend to offer a high degree of flexibility. Since any interest on your money is paid free from Income Tax, this is a tax-efficient way to save.

However, it’s important to bear in mind that the interest rates on these types of accounts are currently low. If they are below the rate of inflation, you may lose money in real terms.

Stocks and Shares ISAs

A Stocks and Shares ISA allows you to invest your money, rather than holding it in cash. The returns on this type of ISA may be higher, but it’s important to bear in mind that since you are investing, there is a chance that you’ll lose money.

All returns on a Stocks and Shares ISA are paid free from Capital Gains Tax, making them a tax-efficient way to invest.

Whichever type of ISA you choose, redirecting your loose savings into such an account can help you to grow your wealth.

Get in touch

If you want to find out more about how to build your wealth in the most effective way possible, we can help. Email enquiries@prosserknowles.co.uk or request a call back from one of our advisers.

Please note

The value of your investment can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. Levels, bases of and reliefs from taxation may be subject to change and their value depends on the individual circumstances of the investor.

This article is no substitute for financial advice and should not be treated as such. To determine the best course of action for your individual circumstances, please contact us.