Lockdown has changed our spending habits - but it's still wise to be careful. Vicky Shaw seeks some expert tips.

Spending habits have changed radically since the start of the lockdown, with many people now having to get by on a reduced income - not to mention our usual routines and access to shops and restaurants having altered significantly.

According to figures from trade association UK Finance, credit card spending across the UK shrunk back by more than 12% in the year to March. Meanwhile, the amounts of cash being held in savings deposits have gone up.

While this is an indication that households are behaving cautiously, it may still be tempting for people to make some money mistakes, particularly if they're feeling bored or in need of cheering up, which they may later come to regret.

Here, Anthony Morrow, chief executive of digital finance advice service OpenMoney, highlights five money mistakes to watch out for...

1. Splurging on 'big ticket' items

With only a limited array of our usual entertainment outlets available, succumbing to the effects of boredom and splurging on a new home TV system or state-of-the-art speakers, for example, is both tempting and understandable.

Emotionally, it's easy to fall into using spending as a crutch and distraction, but with some self-monitoring and patience it's possible to separate out the sensible purchases from the impulse splurges.

Rather than clicking on the checkout button immediately, try to limit impulse buying by sticking to a 'one week' rule and waiting at least seven days before you make a big purchase. Be sure to explore alternatives and see if it might be better to hold off and make do with what you have at home.

2. Being attracted by holiday deals without checking the small print

It's understandable people want something to look forward to and will be dreaming of a time in the future when they may be able to get away. But if you're considering splashing out on a trip for some time in the future, don't lose sight of the need to focus on your financial security right now and build up savings.

Trying to predict what may happen in the future is very tricky and could lead to you losing out - so make sure you understand what would happen to any money you're thinking of putting towards a trip if it did not go ahead and check all the latest Government advice. Check the terms and conditions on refunds and cancellations and make sure to read the fine print.

Up-to-date Foreign Office travel advice can be found at www.gov.uk/foreign-travel-advice.

3. Gambling away money which could lead to problem debt or make debts worse

Whether it's to pass the time, have some sort of distraction, or in the hope for a big win, the temptation to gamble may be particularly strong. But if you are finding it's becoming a problem, you might want to consider speaking to organisations such as GamCare and the National Gambling Helpline or StepChange Debt Charity.

Many free games are available online, which can provide entertainment without the financial burden or risk.

4. Getting caught in a subscription trap

Many people have signed up to subscriptions to treat themselves or loved ones during the lockdown, but be mindful of what happens when a 'free trial' period comes to an end. Use calendar notes and reminders on your phone so you remember to cancel before money starts coming out on a monthly or weekly basis.

5. Being tricked by Covid-19 scams

According to figures from Action Fraud, reported losses from coronavirus-related scams across the UK have now passed the £5 million mark. Always remember when spending time online, you need to be extra alert of those who may be taking advantage of the current situation to scam people out of their money.

'Twishing' and 'smishing' are both types of phishing scams - using Twitter or text messages to pose as bank staff or friends and scam unassuming people out of their money. These scams can be convincing and elaborate. Be extra vigilant about sharing any details about yourself online, over the phone or in person.

DON'T... FORGET TO MAKE SURE YOUR BIKE IS COVERED

The warmer weather and desire to keep fit and healthy have prompted many people to get out on their bikes recently.

The good news is, insurance cover available for cyclists also appears to have improved compared with a year ago. In 2019, analysis of the market by financial information business Defaqto found levels of cover available in the market were very low. But it says that over the past year, several insurers have made significant changes to their products, or launched new ones.

This, in turn, gives customers access to a much better range of bike insurance policies for 2020. There are now 27 bicycle insurance policies on the market from 17 different providers. At present, six policies from five separate insurers receive a 5 Star Rating.

As top-end bikes grow in popularity, insurers have also increased the maximum amount that bikes can be insured for (from £14,000 on average in 2019 to £14,550), Defaqto says.

It's not just bikes that can be expensive - cycling helmets and clothing can also cost a lot to replace if a bag is lost or stolen. But this year, Defaqto has found more policies now include cover for helmets and clothing. The amount of cover for helmets and clothing has also increased from an average of £1,200 to £1,550.

Brian Brown, consumer finance expert at Defaqto, says: "It is heartening to see bike insurers have taken on board our comments last year and made much needed improvements to their policies to give cycling enthusiasts the cover they really need. And at the present time, when going out cycling is one of the few outdoor pursuits still left to those who want to keep fit, it's important to ensure your bike is properly insured."

For further information on cycle insurance policies and star ratings from Defaqto, see

www.defaqto.com/star-ratings/bicycle-insurance1/bicycle-insurance.

POUNDNOTES

Financial fact: Reported losses from coronavirus-related fraud have passed the £5 million mark according to Action Fraud.

TSB, which has a fraud refund guarantee, says one if its customers, from Scotland, was tricked by a scam involving a bike advertised on an online marketplace. The fraudster claimed to be an NHS worker who was self-isolating, which led to the customer paying £200 via bank transfer. TSB reimbursed the victim and the listing was removed from the website.

FIRM SEES SURGE IN DIVORCE INQUIRIES

Divorce inquiries have jumped by more than 40% during lockdown, according to lawyers Co-op Legal Services, which saw a 42% increase in divorce inquiries between March 23 and mid-May, compared with the same period in 2019.

Co-op Legal Services said that during some weeks of the lockdown, it saw inquiries jump by 75% compared with a year earlier. It said Friday is the most common day for people to inquire about divorce, followed by Tuesday.

BORROWERS WARNED NOT TO USE LOAN SHARKS

Struggling borrowers are being urged to steer clear of illegal loan sharks offering 'quick cash fixes' which will make their problems worse.

The Local Government Association (LGA) said money lenders operating outside the law may charge sky-high interest rates, rely on extortion, rarely issue paperwork and are likely to plunge people into deeper debt for longer.

It said that in the most extreme cases, loan sharks have been prosecuted for blackmail, violence and kidnap offences.

JUMP IN SEARCHES FOR PROPERTIES OVERSEAS

Searches on Rightmove Overseas were up by a third (33%) in May compared with May 2019.

In April, earlier on in the lockdown period, searches for overseas homes were also up compared with a year earlier, by 18%, Rightmove said.

Spain, France and Portugal have been leading the uplift in overseas property searches made from the UK.