Quitting the evil weed may become easier from tomorrow when smoking in public places will be banned in England. The health benefits of giving up are well documented, but smokers who need further inspiration should consider their bank balance.

The average smoker – 15 a day for men, 13 for women – spends more than £100 a month on cigarettes. A smoker with a 20-a-day habit spends about £180 a month. By giving up and using the savings wisely, smokers can seriously improve their financial health. Here we explain how.

Shave years off your mortgage

If your lungs don’t inspire you to stub out that last cigarette, perhaps becoming mortgage-free will. A 20-a-day smoker with a 25-year repayment mortgage of £150,000 at 5.5 per cent could be debt-free seven years early and save £38,738 in interest by giving up cigarettes and ploughing the savings into the mortgage.

Drew Wotherspoon, of Charcol.co.uk, the online broker, says: “Many standard mortgages allow some degree of overpayment. For example, Halifax’s two-year fix at 5.49 per cent allows you to overpay by 10 per cent a year.”

Save thousands on life insurance

Premiums for nonsmokers are half the size of those for smokers. Emma Walker, of insuresupermarket.com, the comparison website, says: “If you are a smoker, you are a higher risk to the insurer because you are more prone to illness and premature death.” Quitting could save you up to £3,000 over the life of a policy. For example, cover of £100,000 with Norwich Union for a 35-year-old smoker over the next 25 years would cost £17.90 a month, but the same deal for a nonsmoker would cost only £10 a month, a saving of £2,730 over the term.

To qualify for the cheaper premiums as a nonsmoker, you must have given up for a full year. Your insurer may ask you to take a “cotinine test”, which can detect nicotine in saliva, blood and urine.

Pay less for health and critical-illness insurance

Insurers are scrambling to find more ways to encourage smokers to quit. PruHealth, the insurer, is giving its members hefty discounts on antismoking courses. The courses are designed by Allen Carr, the author of a succesful antismoking book, and cost only £49 for PruHealth members, rather than the normal retail price of £220.

Critical illness can cost smokers twice as much as it does for nonsmokers. A policy with AXA costs almost £960 a year more for smokers than nonsmokers.

Invest it

Fund managers have been quick to suggest potential investment opportunities for the cash being saved by reformed smokers. Justin Modray, of Bestinvest, the independent financial adviser (IFA), says: “Quitting a 20-a-day habit can save more than £2,000 a year. If you put this into a tax-free cash Isa you could expect to have about £11,500 after five years in today’s terms. This could buy a new car, kitchen or the holiday of a lifetime. After ten years that sum would have grown to £24,000.”

Feather your retirement nest

Smokers who quit can use the extra cash to boost their pension pots. Tom McPhail, of Hargreaves Lansdown, another IFA, says: “Four fifths of the price of a packet of cigarettes is tax. So rather than giving to the Government, why not claim tax relief on your savings instead? A pension remains the most tax-efficient way to save for retirement.”

The Government contributes 22p for every pound invested in your pension. A smoker who has spent £78 a month on cigarettes and redirects that money into a pension will receive £22 from the Government. Higher-rate taxpayers can claim a further £18 from the Government.

Unfortunately, Insurers pay better annuity rates at retirement to long-term smokers because they have a shorter life expectancy. Insurers will class you as a smoker if you have smoked at least ten cigarettes a day for ten years.

For advice and guidance on how to quit, visit timesonline.co.uk/smokingban

CASE STUDY: Wedding is getting cheaper by the day

Daniel Lloyd has decided to quit smoking for reasons close to his heart. Not only does the 29-year-old want to put the money he will save towards paying for his wedding next year, but he is also concerned about his health, as his father recently had treatment for heart problems.

“I have been a smoker on and off for the past ten years, having 20 cigarettes a day at most. I enjoy smoking at the pub,” he says. His habit costs him, on average, £30 a week, or £1,560 a year.

Mr Lloyd, who lives on the border of England and Wales, has no plans to buy patches or dummy cigarettes, preferring more old-fashioned methods. “Willpower and chewing gum doesn’t go that badly with beer,” he says.

He has started putting the money he would normally spend on cigarettes into a tin and has already saved enough to pay off the wedding rings earlier than expected.