Reasons to be cheerful in January: You could be richer than you think

Breathe out. And check for windfalls

Treasure hunt: savings from pensions to shares to Premium Bonds often slip under the radar (Getty/iStock)

It’s January, the month of diets, abstinence and credit card bills. If being broke had a taste it would be lime and soda.

It’s only just getting started and it’s already clear the next four weeks or so are not going to be pretty.

Various studies suggest we’ll still be paying for the festive blowout in March. Thousands of us will still be paying the money back when December rolls around again.

The good, though difficult to believe, news is that you may be better off than you realise.

Long-term planning

Almost 18 million working Britons are now participating in a workplace pension thanks to the automatic enrolment scheme. Today, 84 per cent of employed staff are setting money aside.

Up from less than 11 million, around 55 per cent, we now save more than £90.3bn a year; the savings totals are currently increasing by £4.3bn a year as the smallest companies become part of the scheme.

The average individual savings amounts may be low – at less than £3,900 per eligible saver in 2017, but the minimum contribution is due to rise from 5 to 8 per cent in April.

The scheme will particularly benefit the UK’s youngest workers, the demographic that has missed out on other financial benefits.

The Department for Work and Pensions has finally announced trials designed to help the self-employed improve their woefully low levels of retirement savings too.

The Money Advice Service workplace pension calculator can help you work out how much will be paid in between you and your employer.

Savings

If you’re lucky enough to be a baby boomer, you, as a generation, are sitting on half the nation’s wealth.

If you’re under 25 you aren’t. In fact, assumptions about the ways you fritter away your cash follow you around like a bad smell.

But faced with sky-high living and property costs, the truth is that today’s young adults are among the most responsible consumers in Britain. They know they won’t get many handouts and they’re prepared to put in the hard grafts for their financial security.

Historical research by Aldermore found that 74 per cent of 18-24 year olds are saving money compared with only 69 per cent of the population nationally.

Meanwhile, those living on less than £10,000 a year in income are saving the largest proportion of their money – a startling average of 15 per cent.

Easy money

It may not be immediately obvious but the average Brit could quite easily recoup a significant amount of cash very easily by cutting back on things they don’t use anyway.

A clearout of unnecessary direct debt and standing orders could save £360 a year for example, according to GoCompare.com.

The unknown windfall

There’s somewhere between £15bn and £77bn in unclaimed money sitting in forgotten investments, pensions, bank accounts and a whole range of other places in the UK. So, how can you go about finding out if any of it is yours?

If we have an average of 11 jobs during our working lives, move house eight times and throw the odd name or personal details change into the mix it’s no surprise that more than £5bn worth of forgotten pension schemes have gone astray.

If you think some of that cash could be yours The Pension Tracing Service or Pensions Advisory Service can offer help in tracking it down.

If it’s shares in a company you think you’ve mislaid, and can’t find the share certificates, check by applying direct to any of the three main company registrars – Capita, Computershare and Equinity, says Carl Drummond, senior wealth planner at Sanlam UK.

“They will search their records for free but will charge you a fee for issuing a replacement certificate. Alternatively, the Investment Association or the Association of Investment Companies might be able to help.

“According to the Money Advice Service there’s also £850m sitting unclaimed in British accounts. These days we tend to be less loyal to banks and building societies, increasing the likelihood of losing money as we switch.”

Check using a free online service called My Lost Account. It covers over 30 banks and all 44 UK building societies and it will help you trace any lost personal accounts, especially if the provider has closed or merged.

For lost Child Trust Funds for children born between 2002 and 2011, of which there are more than a million, worth as much as £1bn, submit a request via Gov.uk. And at the other end of life Unclaimed Assets UK, which helps to trace lost money, estimates there is £2bn languishing in unclaimed life insurance.

The big numbers

Even if you casually bought into a lottery, you’d expect to check your numbers. But huge swathes of us don’t.

From Premium Bonds (1.5 million unclaimed prizes are worth more than £60m) to lottery wins (in September there were almost £12m in unclaimed National Lottery prizes) there is cash sitting there waiting for its rightful owner.

The My Lost Account service can tell you if you hold any Premium Bonds and NS&I can tell you if it has won a prize. Go to the National Lottery website to check your numbers. But be warned, if they’ve been languishing for more than 180 days, the money is permanently reallocated to National Lottery Projects.