Many of us it seems aren’t great at managing our finances; according to a recent survey1, putting away money for the future never quite makes it to the top of the ‘to-do’ list for one in ten of us. Researchers polled 2,000 UK adults and, despite the age of austerity, found many were “blindly” spending without first considering the potential consequences.
And that’s not all; many never find the time to plan pensions, review their mortgage or make sure loved ones would be provided for financially if an accident or illness were to strike. So how can you put this right?
AIM TO SAVE MORE
The research found 9% prefer to spend their income and enjoy it now rather than build a nest egg. Of those who save rather than spend, 44% have done so in case they need the money for an emergency. Other saving targets include buying a house, a car and home renovations.
At some stage in our lives we are all going to need savings to fall back on. ISAs are a great way to save tax-efficiently, and the annual allowance for 2018-19 is a generous £20,000. Even small amounts saved regularly will mount up over time.
REVIEW YOUR MORTGAGE REGULARLY
With the continuing uncertainty about the future level of interest rates, it’s easy to overlook the need to review your mortgage. Those on standard variable rate mortgages often end up paying this rate by default once their fixed or tracker deal ends. If your current deal is about to end, or you’ve had the same deal for a while, ask an independent mortgage adviser to review your options.
PLAN FOR YOUR FAMILY’S FUTURE
It’s worth keeping life and income protection policies under review, as over the years your needs change. Check you have enough cover for your current situation and liabilities.
Should you be thinking about inheritance tax planning? With the rise in property prices, more families are finding themselves drawn into the tax net.
START YOUR PENSION PLANNING AS EARLY AS POSSIBLE
It seems unlikely that the state pension will ever represent more than a basic safety net, and this should be a strong incentive for all of us to make adequate pension provision. Yet the survey found, one third have never considered cutting back on their outgoings and putting more money into saving for their future.
It makes sense to review your pension regularly, and aim to contribute as much as you can comfortably afford and are allowed to under current legislation.
MAKE A WILL
Anyone with a family should have a valid Will in place in order to make sure your wishes are followed. If you die without having made one, your wealth will be distributed under the rules of intestacy. This can mean that those you might have wanted to inherit could receive nothing. If you already have a Will, it’s worth considering if it needs updating.