To say that the economy is not looking so hot at the moment is something of an understatement. Even if you're not in dire straits, challenging economic times mean it's more important than ever to keep a close eye on your personal finances and get the best possible financial advice.
Here are just a few of the points you should be considering:
Your Mortgage
If you have an existing mortgage, the most obvious change that you will have noticed is the rapid fall in interest rates. As the base rate falls, these changes can have a dramatic impact on the amount that you pay. If you have a tracker mortgage, then this is great news as your monthly payments will be falling. If that's the case then you might consider the option of overpaying your mortgage - saving yourself thousands in interest and protecting the equity in your home as house prices continue to fall.
If you have a standard variable rate mortgage, then chances are you will not have seen such a huge change in your monthly mortgage payments as most banks have not passed on the entire fall in interest rates. If you have a fixed rate mortgage deal then you're out of luck.
If by chance you are looking for a mortgage, or a re-mortgage, then it's a good idea to take professional advice as to what type might be the most suitable for you. As interest rates can't really go much lower, a fixed rate might be a sound idea. Of course, that assumes you can get one. As the banks are much more hesitant to lend, having access to the whole of the market through an independent financial
adviser is key.
Your Pension
Pension funds have been hit by falls in the stock markets - affecting the amount of money that you will have in retirement. Depending on how far away from retirement you are, you might consider moving your pension fund or investing in other kinds of investments. Again, professional advice and sound retirement planning is key.
Your Savings and Investments
If you are a saver rather than a borrower, falling interest rates are obviously bad news. It may be worth looking at alternatives to simple savings accounts as a way of maintaining the value of your savings. Investments in gilts, bonds or even stocks and shares could potentially provide you with better returns - although again, your individual circumstances will have a big part to play.
It is also important that you make the most of any ISA allowances you may have, as even though returns may be low, there's no reason to pay more tax than you have to.
ASU Insurance
Hard economic times can often lead to unexpected company closures or redundancies. Accident, sickness and unemployment insurance (ASU cover) can help ensure that the bills still get paid even if you are made redundant. It's certainly something worth considering.
Whatever your own personal situation, the more challenging the economy becomes the more attention you need to be paying to your personal finances. You cannot afford to sit back and assume that your pension fund is on track or that your investment ISA is giving you the best possible returns.
However, provided you get the best advice and have access to the whole of the market, you can make simple changes to ensure that your personal finances weather this economic storm.
Author Resource:-
Gareth Flanagan is an independent financial adviserwith Principle First Financial Services one of the UK's few firms of Chartered Financial Planners. To discuss your options, or receive
financial advice visit us on-line.
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