The beginning of a New Year is traditionally the time for new resolutions. Unfortunately, few of us have time to keep them all. Things that can be done to improve family finances need not be time consuming with help from LEBC’s bionic advice zone.
This includes: -
1. Keeping better track of your spending can identify which items you no longer value such as clubs and subscriptions hardly used. Understanding utility and insurance costs can make switching to other providers easier.
2. If your resolution is to pay off your mortgage early, our bionic mortgage comparison calculator can help you see other offers available. If owning your own home, or helping a family member do so, is one of your goals, the mortgage calculator can provide guidance on how much might be borrowed and monthly costs.
3. Review your rainy-day account. This should cover a minimum of 3 to 6 months outgoings. Depending upon what other savings and insurance you have, you may need to set aside more in easy access accounts. The Hummingbird app will help you see current balances, budget for big ticket items and check for unauthorised transactions.
4. Review your preparedness for the unwelcome. Life and ill health insurance. As a minimum, cover any debts and mortgages and provide for ongoing income replacement. The bionic protection calculator will help you work out the level of life cover needed, get an indication of cost and apply online. Reviewing and topping up personal cover could leave you less reliant on access to savings, so they could be invested with longer term aims in mind, knowing that the "what if" scenarios are provided for.
5. Make a will. Without this, you cannot be sure that your loved ones will be adequately provided for. Wills should be reviewed every few years to ensure that they still meet your wishes and the needs of your family. They automatically lapse on marriage, civil partnership and divorce.The bionic will service enables you to give instructions to a solicitor who will draw up your will in accordance with your wishes.
6. If your pension plans are not part of your estate and are not covered by your will, you may wish to update the nomination forms which state who you want to benefit from your private pensions and lump sum death benefit payments. Life policies may need to be put in trust or owned by a spouse/civil partner to avoid Inheritance tax on any pay out.
7. If you are employed, aged 22-65, and earn more than £ 10,000, your employer should by law offer a pension scheme. If you have not done so already, you may wish to join it depending on your individual circumstances. If you have already joined, consideration could be given to increasing your contributions if this is affordable. Some employers will match your extra contributions. If self -employed put some funds aside for your retirement savings. You will usually get tax relief on the amount saved up to £40,000 pa or 100% of taxable profits, if lower.
8. Keep a record of all your savings, investments and pensions. An easy and secure way to do this is via LEBC’s Hummingbird app which lets you view everything in one place. This can cut the cost of regulated advice by updating your adviser quickly and easily. It avoids losing track of accounts. Pensions from previous employments can be traced via www.gov.uk/find-pension-contact-details.
9. Review your pensions. Since 2015 pension plans can be accessed more flexibly and left on death tax efficiently. If yours are older than this, they may need updating to take advantage of the new rules. But some older plans may include valuable guarantees which could outweigh the benefits of pension flexibility.Charges for managing funds could also be lower under new plans, as generally charges have reduced. Saving money on charges will help improve the value of your retirement fund.Is the investment fund still right for you? This will depend upon your objectives and time frame before retirement and whether you have other guaranteed sources of retirement income.
10. Is your tax code correct? Unless nothing has changed, it may not be. Use the tax efficient savings schemes available and claim all the allowances and reliefs, to which you are entitled.
To learn more about bionic advice visit https://www.lebc-group.com/bionic-advice/ or talk to your usual LEBC adviser.
Director of Public Policy, LEBC Group
Please remember, no news or research item is a recommendation or advice to buy. LEBC Group Ltd is not responsible for accuracy and may not share the author’s views. The contents of this blog are for information purposes only and do not constitute individual advice. All information is based on our current understanding of taxation legislation and regulations. The Financial Conduct Authority does not regulate estate planning, tax advice, wills or trusts.Back to News & Views
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