You may not review your finances regularly and I realise you may have other priorities right now. However, if you and your family are safe and well, you may have more time on your hands to have a look at things.
It’s not just the fact you may have extra time. With what has happened and the changes that are coming, now is an essential time to review your finances.
Failure to take action now could mean huge differences in your wealth over the next few years and worst, delaying retirement.
Review your finances now
#1 – Coronavirus support packages
There are lots of support packages out there like the Job Retention Scheme and the Bounce Back Loan Scheme. The fact these schemes were launched quickly to protect the economy and that some have already changed means it can all be confusing.
Particularly for business owners and the self-employed. There are some great opportunities out there to not only secure your business’s future but also to ensure it thrives.
These schemes won’t be around forever so it’s important you take the opportunity now and don’t miss out.
#2 – Cash interest rates
Cash interest rates are at rock bottom. Holding money in cash is going to earn you nothing over the next few years.
In fact you are likely going to be losing money in real terms. Inflation will eat away at the spending power of your money. For example, according to the Bank of England’s inflation calculator, something that cost £10 in the year 2000 will now cost you £16.96. Going back further, something that cost £10 in 1990 will now cost you £22.90.
You seriously need to consider investing the cash you don’t need for emergencies or for the short term.
#3 – Low stock market prices
Speaking of investing. Now is a great time to be investing in the stock market providing you can afford it and are aware of the risks.
The great companies of the world are on sale at massive discounts.
The pandemic has caused a ‘Covid Crash’ to world stock markets. Some have recovered quicker than others so it’s important to pick the right markets.
If you were buying a business would you wait for it to go up in price or would you buy now whilst it was discounted?
#4 – Higher taxes could be coming
The pandemic has led to huge financial packages of support from governments around the world. In a worst case scenario, the UK government may have to borrow £516 billion this year alone!
In order to keep borrowing rates low, the markets will demand that the UK has a plan for getting on top of its debt.
This could mean tax rises for us all, particularly businesses.
So now is the time to make sure you are investing in a way that uses all available tax allowances. These allowances might not be around for much longer.
#5 – Defined benefit (final salary pensions)
If you have a private defined benefit pension now is definitely the time to review it.
Transferring a defined benefit pension is not appropriate for most people however, if it is right for you there has probably never been a better time to look at it.
The transfer value you will be offered will be higher as a result of very low interest rates (values are higher the lower the interest rate) and once transferred you would be invested in cheaper investments (see point 3 above).
Help is available to review your finances
Like many businesses most Financial Advisers are now working from home but with all the technology they need to ensure they can serve you.
It’s business as normal for us including our RTS Investment Strategy which is built to ensure you are investing in the right assets at the right time. This in turn leads to better performance over the long term and reduced risk.
In fact we can offer:
- Online video conferences.
- Screen sharing of documents and presentations.
- Meetings 24/7 at a date and time that suits you.
- No cost for an initial consultation.
If you would like help to review your finances to ensure your future is secured then why not start with our free 15-minute call. You can speak to a Chartered Financial Planner who will listen to your situation, give you an outline of what you need to consider and guide you in the right direction.
Stock market linked investments and any income from them, can fall as well as rise and is not guaranteed. Any figures quoted are for illustrative purposes and should not be taken as a forecast or guarantee. Past performance should not be seen as an indication of future returns and clients may get back less than they have invested.