Jeremy Gates looks at the nation's money issues and reveals ways to spring clean your finances for the new year.

DO you really need that gym membership that lifts a lump sum out of your bank account each month? And why struggle with private healthcare premiums when they soar once you’re on the wrong side of 50?

Many of us will need to look closely at where our money goes in 2012.

The Family and Parenting Institute has warned that the average income of households with children will fall by 4.2% between now and 2016 – equivalent to £1,250 per year.

Andrew Hagger, savings expert at Moneynet.co.uk, says: “Many people promise to sort out their finances – and do nothing about it. This time, set some time aside and look at everything going out on your bank account and credit card statement.

“You have to pay council tax, but other things – mortgages, insurances, utility bills – invariably cost less elsewhere. And always look to switch a credit card balance to a 0% introductory rate.”

Kevin Mountford, head of banking at MoneySupermarket.com, reckons a family can save as much as £3,200 a year from a smart financial review.

He says: “As Christmas bills kick in, many households could hit a financial tipping point, as research suggests a fifth of Britons were pushed deeper into debt by the cost of festive celebrations.

“Consumers must tighten up their finances. Despite the tough economic climate, too many Britons still make the mistake of sitting on average products that provide a low return or cost more than they need to.

“Often, savings don’t even require a change of lifestyle, merely a few minutes of research to check your current deal. Then compare it to other products and change to a more competitive deal if necessary.”

Here’s an essential checklist of potential savings:

Get debts down – as fast as possible

“Aim to become debt-free as soon as possible,” says Ray Black, financial adviser and founder of Money Minder.

“In this climate, it’s foolish to have savings earning a relatively low rate of interest and debts on which you are almost certainly paying a much higher rate.

“If you have credit card debt where the interest rate is around the average 16.5% APR, any savings have to earn more than that to make it worthwhile keeping them. Look to pay off your most expensive debts first and consider consolidating debts to cut interest charges.

“Get independent advice from organisations such as the Citizens Advice Bureau, Credit Action or the Debt Advisory Service.”

Mortgages

“The market is much better than 12 to 18 months ago, particularly for those with a slice of equity in the home, or a decent deposit as first timers,” says Andrew Hagger at Moneynet. “There are some good five-year fixes: for borrowers with 25% equity, The Co-operative Bank offers 3.59% with no fee, while borrowers with a 15% deposit can get a Yorkshire Building Society deal at 4.29% with a £495 fee.”

According to MoneySupermarket.com, switching a £150,000 mortgage from an average standard variable rate of 4.83% to a market-leading two-year tracker rate from First Direct (2.08%) would save £1,207.84 annually.

Coventry Building Society deals launched this week include five-year fixes from 3.58% for those with a 65% loan-to-value ratio.

Consider an offset mortgage

“They are an incredibly useful tool in the current market as they enable borrowers to earn tax-free interest on savings at the same rate as they are paying on their mortgage,” says David Black, insight analyst at Defaqto.

“Savings interest is offset against mortgage interest, so this option works particularly well for higher-rate taxpayers. However, you need a reasonable level of savings to make an offset mortgage worthwhile.”

Of 329 offset mortgages available, Black tips two: First Direct’s lifetime base rate tracker costing an initial 2.48% (Bank base rate plus 1.98%), with maximum loan to value 65% and a £1,499 arrangement fee; and a five-year fix from Yorkshire Building Society at 3.59% until February 28, 2017, with maximum 75% loan to value and £995 fee.

Maximise your savings power

Savers lost out in 2011 as interest rates lagged way behind inflation. According to MoneySupermarket.com, switching from an easy account paying an average 1.08% to Nationwide Building Society’s MySave Issue 4 easy access account (3.12%) generates an extra £102 a year on a £5,000 savings pot.

Cheshire, Dunfermline and Derbyshire building societies – all Nationwide subsidiaries – have launched a Platinum Monthly Saver, to encourage regular saving. This fixed-term, branch-based account pays a competitive variable rate of 5% gross pa/AER (variable) until January 31, 2013, or the first anniversary of the account.

Customers pay in £100 to £500 a month over the term. Savers who make no more than one withdrawal and miss no more than one monthly deposit in the year earn 5% gross pa/AER.

West Bromwich Building Society also has a regular savings account, paying a fixed 4.25% on maturity, on a maximum £3,250 saved, with a minimum £10 deposit.

Get a cheaper loan

M&S Money has trimmed the rate from 6.4% to 6.0% APR on personal loans of £7,500 to £15,000 over 12 to 60 months. M&S Money offers £1,000 to £25,000 loans, with flexible repayment terms and an option of making no payments for the first three months, subject to criteria.

Colin Kersley, M&S Money chief executive says: “Our lowest loan rate for more than five years gives customers an opportunity to cut borrowing costs.”

So far, seven lenders have dropped their loan rates since the start of 2012. Customers are urged to shop around as loan rates continue to fall.

Get the right current account

Most of us are loathe to switch, but banks are really chasing new customers. Santander’s Preferred current account pays 5% interest on credit balances, so anybody keeping a £1,500 balance in this account for a year earns £65.25 in interest. However, if you use an overdraft every month, you could save £292.50 by switching from an account with an average overdraft rate of 19.5% to Santander’s account at 0% for 12 months.

Choose the right credit card

Provided their credit score is satisfactory, somebody switching a £2,000 debt on a card with an average APR of 18.4% to the market-leading Barclaycard Platinum charging 0% for 22 months avoids interest in the first year.

Get the right deal on your car and home insurance

MoneySupermarket.com reckons too many people overestimate the level of cover they need, and pay too much as a result. Paying annually for home cover is cheaper than paying monthly. On average, consumers who use MoneySupermarket.com to switch insurance providers can save £383.22 on car insurance and £125.59 on home insurance, a combined saving of £508.81.

Get utility bills down

For starters, check that you are on the right tariff for your consumption level. The easiest way to save is by moving to a dual fuel online direct debit deal. By switching to the best online tariff instead of staying on the average standard tariff, customers save on average £256.25 over 12 months with First Utility iSave 9.

Other ways to cut energy bills include: turning down the thermostat by one degree can cut annual bills by 10%; beefing up loft and cavity wall insulation to avoid up to 35% of heat loss; and turning appliances off at the wall.

TV, phone and internet charges

A packaged bundle – including TV, landline and broadband – can deliver big savings. For example, Sky provides a TV Variety Pack which includes broadband, line rental and a basic TV package, with unlimited evening and weekend calls.