5 things the Money Advice Service can teach savers

The Money Advice Service exists – in its words – to help people get to grips with their money.

Completely independent and paid for by the financial services industry, it has a budget of £46.3 million, in addition to a separate £40.5 million budget to co-ordinate the provision of debt advice across the UK.

Given its substantial budget – plus a chief executive earning an astonishing £350,000 salary – you’d certainly hope they have a handle on money matters. But what's especially useful about this website are the snazzy tools and calculators.

Here are five of our favourite:

1. The health check

The health check has had over 400,000 hits since it launched in June last year so it must be doing something right, but how exactly does it work?

This tool is extremely useful first step for anyone who hasn’t got a clue where to start when it comes to their finances as it will give you a broad overview of where you stand financially and point out which areas you need to focus on first.

It only takes about five minutes to complete, asking you simple questions such as what would you do if the cost of living suddenly went up and when you want to retire. It will then create an action plan for you based on your answers.

When I tested out the service, for example, it advised me that I need to concentrate on building up some emergency savings, consider taking out insurance to protect myself against unexpected bills and work out exactly how I’d cope with less money – a pretty accurate assessment. It then went into more detail on how I should go about achieving these goals.

2. The budget calculator

This is brilliant. You simply spend a few minutes detailing your income, bills, expenses, and then out pops a breakdown of your spending highlighting how much you have left over each month to save – complete with a coloured pie-chart.

After creating my own budget, I can say it is certainly illuminating and might be the kick up the behind you need to get saving.

Once you're done you can then save your budget and access it any time you like using your ID number. It would probably be useful to have information like payslips and utility bills on hand to help you get the details accurate but I managed just fine without. And you needn’t worry about your figures being passed onto a third party as they are kept confidential.

3. The cutback calculator

If after the budget calculator you need a little more guilt tripping into putting some cash aside each month, may I suggest the cutback calculator.