For most, this has been the hardest, loneliest Christmas, filled with nothing but the same 4 walls and for many NHS medics long hours at work. Finally, we have a Brexit deal but now with the new Covid variant and another national lockdown, it is no wonder our anxiety levels in the UK have reached new heights. Now, could be a good time to focus on your finances in preparation for the year ahead.
So, are you ready to face 2021 with renewed financial focus?
Having helped clients through bereavements, family illness and divorce in the past, I am aware of the calming effect bringing order and structure to your finances can offer. Whilst catching up with old friends (via zoom) over Christmas, many were asking for help to organise their finances – almost without exception! It’s time to lean on your financial adviser and see what calm and money magic we can bring to your savings, protection or mortgages, to name just a few…
6 financial areas to address this January
Some you can tackle by yourself if you have 10 minutes. Others will need our input but even if you just pick one, I promise your financial self will thank you.
1. Check your NHS annual allowance statement and take any necessary actions regarding scheme pays and the compensation arrangements for 2019/20.
See our article: Are you eligible for the NHS pension annual allowance charge compensation? for details. If you haven’t requested your annual allowance statement for 2019/20 you should make this your priority! If you don’t have your annual allowance statements for the last 3-5 years either, I suggest getting those at the same time so you are fully equipped to know where you stand.
2. Review your credit card deals and manage your budget
It may be time to look for a better deal – look at bank fees and your home loan interest rate and consider increasing payments or frequency to save interest.
If you have credit card debt or personal loans, it could be time to review exactly what you are paying. They can be easy to lose track of so this should take precedence when you get paid.
It’s always wise to work out an affordable repayment schedule which repays your most expensive debt first. There are comparison websites abound – so spend a little time looking at your options.
3. Use all of your annual tax allowances
We should all be setting an affordable amount of savings aside on a regular basis. Ideally, the money should go out on the same day that you get paid; what you don’t see, you don’t miss, so to speak! Every time you get a pay increase, remember to increase the amount you are saving.
Don’t forget you can save into ISAs on a monthly basis as well as with lump sums; it all helps towards making full use of your tax-free ISA allowances. Seeking capital gains tax and inheritance tax advice will also leave you more in control of your money to spend on the things you enjoy. Speak to your financial adviser to see how they can help you.
4. Protect those you love the most from things you hope will never happen
Are you one of the 60% of Britons who doesn’t have life assurance*? Have you always opted to not take income protection? What about if you had a Critical Illness? Do you have a back-up plan if there was a financial disaster?
No-one likes paying for insurance until they need to make a claim.
If you already have life cover, make sure you have taken out enough to protect your family’s lifestyle. This should also include critical illness protection and adequate income protection which will pay you a tax-free replacement income if you fall ill and cannot continue to work. It’s best to ask your financial adviser what you need based on your own individual circumstances.
Also, make sure that your home buildings and contents cover is adequate, and that the sum assured reflects the true rebuilding and contents replacement. Save money by insuring the rebuilding cost, not the current value of the building.
5. Review your risk profile
In light of the global pandemic, Brexit and a change of guard in the Whitehouse you could well be questioning yourself and how you have invested up until now. Are your current arrangements still appropriate? Should you be rethinking your attitude to risk?
There’s never a wrong time to check your financial plan. Never hesitate to contact your financial adviser about this, or if you don’t have one maybe now’s the time to start that conversation. Specialist financial advice can help you strike the right balance in your portfolio.
6. Review your mortgage rate
Are you still on a standard variable rate? Are you coming to the end of your existing fixed rate? What should you do next? The rates charged for mortgages are on the up but there are still plenty of great competitive remortgage deals available, with fees such as valuations and legal fees paid.
We can help by comparing the whole mortgage market independently so you have the full picture and give you guidance to find the right deal to suit you now, and in the coming years.
Or maybe the Christmas holidays have made you feel you really need to get your skates on and try to catch the stamp duty holiday window and move before the March deadline. Whatever your objective, we can help!
Don’t forget, if you do not keep up repayments on your mortgage then you are at risk of losing your home.
With so much uncertainty right now this may seem a daunting time, but you will feel so much better once you have a clear idea of where you are now and how to get to where you want to be financially! You don’t have to tackle this alone. Just call us to arrange a meeting and we’ll get you on the right path in no time.