13:04 15 March 2013
But quitting smoking is no mean feat - it takes motivation, determination and willpower. And if the thought of a healthier heart and lungs isn't enough to persuade you to break the habit, perhaps discovering just how much heavier your wallet will be if you succeed will help to seal the deal.
Here's 10 ways you will be richer as a non-smoker...
1. You'll have extra cash in your bank account
Ditching the cigarettes will not only benefit your own health but it will also lead to a healthier bank balance. For the first time in a long time you could have surplus cash sitting in your account at the end of the month.
To put it into perspective, the Tobacco Manufacturers' Association puts the recommended retail price (RRP) of a pack of 20 cigarettes at £7.47 - and the price will go up again in the forthcoming Budget.
If you smoke 20 cigarettes a day, quitting would put an extra £52.29 a week in your pocket, which equates to £224.10 a month - or £2,726.55 a year!
2. ... so you can save more for a rainy day
Savings rates may be poor but that shouldn't give you an excuse not to put a little aside for a rainy day. Your first port of call should be a cash ISA as you won't pay tax on the interest you earn. In the current tax year you can pay up to £5,640 into a cash ISA, rising to £5,760 on April 6.
If you put the £2,726 you'll save from not smoking into the Cheshire Building Society ISA Saver paying an annual tax-free rate of 2.50%, you would have earned £68.15 in interest in a year's time. If you paid in the full allowance of £5,640, this would rise to £141 interest.
However, if you've already used up your ISA allowance, or you simply need help getting into the savings habit in the first place, you could opt for a regular savings account which requires you to save a certain amount each month.
With First Direct's Regular Saver account, for example, you'll need to pay in between £25 and £300 a month and in return, you'll receive an AER of 6.00% for 12 months. This account has recently been re-launched - its previous incarnation paid 8.00% AER.
It's a taxable account, so if you paid the £225 a month you'll save from not smoking into the account, you'd have £69.70 interest after basic rate tax at the end of the year.
Be aware you'll have to have a 1st Account current account from First Direct to qualify.
3. You can become debt-free faster
If you are feeling utterly depressed about savings rates - and really, who could blame you? - you might prefer to throw your extra money towards your debt, whether that's a credit card or personal loan.
Providing you have a savings cushion to fall back on in an emergency, clearing your debt makes great financial sense. You could also save yourself hundreds - if not thousands - of pounds in interest.
Be aware though, personal loans are a little less flexible than credit cards and can come with hefty early repayment charges, so check first.
4. You can pay more towards your mortgage
If your mortgage provider permits overpayments you could also pay a little extra towards your mortgage each month. How much you can overpay by will depend on the lender. Nationwide, for example, allows you to overpay by £500 a month.
So let's say you have a £140,000 mortgage with Nationwide at a rate of 4% and you have 23 years left on it. If you overpaid by £225 a month, you would save £24,037 in interest and pay off your mortgage six years and 11 months earlier.
If you upped your overpayments to the maximum of £500 a month, you would save £37,243 in interest and pay off your mortgage 10 years and 11 months earlier.
5. You'll pay less for life insurance
Quitting smoking will also cut the cost of life insurance. In fact, our research found that a 30-year old non-smoker could save up to £1,779 with Aviva on a single life insurance policy over a 25-year term.
Note that, to be considered a non-smoker by insurers, you need to have given up smoking (and nicotine products) for at least 12 months.
6. You'll pay less for critical illness cover
You'll benefit even further if you're taking out a combined critical illness and life insurance policy. According to our research, a 30-year old wanting £150,000 of cover over 25 years could save £6,207 with Scottish Provident over the term, or £20.69 a month, if they went smoke-free.
7. You can pay more into your pension
Even if your retirement seems light years away, putting more towards your pension now can really pay off later. Let's say, for example, you are 30-years-old and currently have £1,000 in your pension pot. According to advisers Hargreaves Lansdown, by saving £100 a month, you'd have a pension fund of £79,636.57* if you were lucky enough to retire at 65, giving you an annual income of £3,482.09.
But if you increased your contributions by £225 a month (to £335 a month), you'd have £251,839.76 in your pension pot at retirement, giving you an annual income of £11,011.63.
8. You'll get a better price for your property
If you're selling up, nicotine-stained walls and lingering tobacco smells can act as a big deterrent for potential buyers - particularly if they are non-smokers. Even those who aren't put off completely are likely to go in below the asking price and may refuse to budge, given they'll need to fork out on redecorating and new carpets.
Quitting smoking and giving your home a fresh lick of paint could therefore help to ensure you get the best possible price for your property.
9. You'll no longer have to pay for special dental treatment
Nicotine not only stains walls, it also stains teeth. If you have been smoking for a number of years, you may need to undergo teeth whitening treatment to get rid of the yellow stains. But this is a costly treatment and you'll have to pay between £300 and £400 a pop. Throwing out the cigarettes means you'll no longer need to throw this money away.
10. You'll have a richer quality of life
Giving up the smokes for good will see you visit the doctor less, your lungs will function better, helping you to be more active, and you'll be less likely to die from lung cancer, coronary heart disease or stroke. According to Smoke Free, quitting will typically mean 16 more family Christmases, birthday celebrations, wedding anniversaries and FA cup finals - no amount of extra cash can beat that.
There is one advantage to smoking, but you won't be able to make the most of it until you retire. Because smokers typically have shorter life expectancies, they get higher pension incomes because they can buy an 'enhanced' or 'impaired life' annuity that offers higher rates than a normal plan.
According to LV=, those who qualify for an enhanced annuity could see the rate they receive increase by as much as 30%.
However, while this will give you a bigger income in retirement, remember that it's because you are likely to die earlier, so you'll probably have less time in which to actually enjoy it!
*Note that these calculations assume a growth rate of 7% per year, with contributions increasing by 2.5% a year. An annual management charge of 1% has been deducted from the growth rate. The calculations also reflect the impact of inflation at 2.5%.
Please note: Any rates or deals mentioned in this article were available at the time of writing. Click on a highlighted product and apply direct.
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