Spring clean your finances

The snowdrops are out, the daffodils are peaking their heads out, spring is finally on its way. Spring signifies the start of better (and hopefully warmer) times and new beginnings, making it the perfect time to give your finances a spring clean.

Set clear goals

I’ve said this many times, but make sure you have clear goals about what you want to achieve with your money. Do you want to pay your mortgage off within 10 years? Have you got a certain figure in mind to have saved by the time you’re 55? How big a pension pot do you want at retirement?

Spruce up your mortgage

It’s fair to say the last couple of years have seen mortgage rates rocket and whilst they appear to be settling down again (slowly) the rates are nowhere near the 1-2% we had all become so used to.

If you still have a few years left on a low fixed rate mortgage, it’s worth investigating what your potential new monthly cost will be. If possible, start making this extra payment now to reduce your overall mortgage balance before the inevitable rate hike. This will help reduce the actual increase you are likely to face.

Whatever your situation, if you think increased mortgage payments will be financially difficult you can look to extend your overall mortgage term. Most lenders will allow this up to (and maybe even beyond) retirement age.

Bear in mind, this should always be a last resort as you’ll end up paying more in the long term!

Check up on your pension

Even if retirement feels a million years off, it’s never too early start preparing.

Springtime is a great time to have a pension review. Using our “shortfall analysis” system we can provide a detailed picture of how the contributions you’re making measure up against the contributions you need to make to hit your target income. If it turns out you need to start contributing more to your pension, the sooner you start, the greater the return will be!

Diversify your investment portfolio

Diversification is key to protecting your investments. We use a mix of different asset classes to help protect your portfolio from any sharp downturns in the stock market which have been so common of late.

This system of portfolio diversification is further enhanced by Wealth Select, our model portfolio investment solution. Funds are regularly monitored and rebalanced to keep them in line with your appetite for risk, personal ethics and in response to the performance of the funds.

Look at legacy planning

Having a will in place ensures loved ones – particularly children, step-children and unmarried partners – are looked after when you are gone. If you don’t plan, the part of your estate which exceeds the inheritance tax threshold of £325,000 could be taxed at 40%. Bear in mind this threshold includes property, meaning you don’t have to be particularly wealthy to leave behind a large inheritance tax bill.

If you don’t yet have a will – or it’s now out of date – we can arrange this through our will writing partners.

Tidy up your records

It’s a really good idea to spend some time recording all your important documents, assets and instructions, and making sure your loved ones know where to find this list when the time comes.

We’ve devised a My Important Documents checklist that we can help our clients complete. This ‘master’ document lists where you keep your will, key contacts, bank account details, assets and even (if you want to include them) funeral wishes.

Ginkgo can keep a copy of the completed document for you and make any necessary updates alongside your annual financial review. It’s also a good idea to provide copies to key members of your family or friends – or at least tell them where to find it when they need to.

Regular reviews

I’ll always advocate an annual review but I also understand sometimes this isn’t possible. However, it’s worth noting

changes to your income, value of your assets (and liabilities), age, health and marital status are just some of the factors that can impact the best way to structure your investments.

If you’ve not had a review recently and there have been changes to any of the above, a full review is definitely worthwhile.

We’re more than happy to host family meetings or one-to-one review sessions, allowing you to spring clean your finances and help make sure you’re on track to achieve your future financials goals.

By Daren Wallbank

The value of pensions and the income they produce can fall as well as rise. You may get back less than you invested.
Tax treatment varies according to individual circumstances and is subject to change.
The value of investments and the income they produce can fall as well as rise. You may get back less than you invested.
Will writing is not part of the Quilter Financial Planning offering and is offered in our own right. Quilter Financial Planning accept no responsibility for this aspect of our business.
Your home may be repossessed if you do not keep up repayments on your mortgage./p>

Approver Quilter Financial Services Limited & Quilter Mortgage Planning Limited. 28/02/24