Ellis Bates Financial Advisers
Lasting Powers of Attorney allow a friend or family member you trust to make decisions on your behalf if you are no longer able to do so yourself, or are incapacitated.
In these uncertain times, it’s more important than ever to make sure your finances are in order. We have 10 practical steps to ensure your money is working hard for you.
10 practical steps to ensure your money is working hard for youIn these uncertain times, it’s more important than ever to make sure your finances are in order. The Bank of England believes that a painful squeeze on our living standards, driven primarily by soaring energy prices, is set to intensify and will push the UK economy into recession later this year.[1]
Making your finances recession-proof is all about taking practical steps to ensure your money is working hard for you. It is vital to be completely honest with yourself about your financial situation.
By conducting a thorough audit of your finances and gaining a comprehensive understanding of all your incomes and outgoings, this will show you exactly where your cash is going and, most importantly, help you identify problematic spending behaviour.
This will help you keep track of your spending and ensure that you’re not overspending.
Try to put away as much money as you can into a savings account so that you have a cushion in case of tough times.
Take the time to learn new skills or improve upon existing ones. This will make you more valuable in the job market if you need to make a job or career change.
Look at your bank account and remove any pain-free direct debits. Consider if you’re currently paying for things you don’t really need, for example, subscriptions.
Look at energy tariffs, home insurance, car insurance, broadband, TV package, mobile tariff – now might be a good time to switch.
Make sure you’re making all of your payments on time and in full. This will help you avoid costly late fees and keep your credit in good shape.
Prioritise any high-interest debt, such as credit card debt, freeing up more money in your budget to cover other expenses if your income decreases.
This is a must in case you lose your job or have any unexpected expenses. Try to save up at least between three to six months’ worth of living expenses so that your expenditure is covered.
Don’t put all your eggs in one basket. Having multiple streams of income can really help. If one income source starts to dwindle – or gets eliminated completely – this will provide other sources to fall back on.
In addition to diversifying your income, it’s also important to diversify your investments. Review your investment portfolio and make sure your investments are spread across different industries and even different types of asset classes.
Following these tips will help you secure your financial future and protect yourself from the effects of rising inflation and the cost of living crisis. If you would like to find out more or to discuss your situation, please contact us.
Source data: [1] https://www.bankofengland.co.uk/monetarypolicy-report/2022/may-2022
With Policy changes, volatility and unpredictability the new norm it appears at times, a different approach is needed towards your finances and investment strategy.
Ellis Bates continue to emphasise the foundations for dealing with the current conditions lie in a well-diversified, global approach to assets that have long term potential to weather the immediate storms and deliver returns over the longer term.
For more information please visit our latest market insights “Growing Pains?”
Bank of England tries to rein in inflation, which has reached its highest value since 1981, almost five times the central bank’s target. (1)
The pound has fallen to a record low against the dollar as markets react to the UK’s biggest tax cuts in 50 years. (2)
It’s hard to find much good news in relation to Global Markets, with investors remaining worried about high inflation and low growth. (3)
Sources
[1] https://www.bloomberg.com/news/articles/2022-09-26/understanding-the-british-pound-s-sudden-crash-quicktake
[2] www.bbc.co.uk
[3] https://russellinvestments.com/uk/blog/inflation-recession-earnings-mwir
This session looks at how the strategy of diversification among investments can be used to reduce risk when investing.
The UK’s new Chancellor Kwasi Kwarteng unveiled “The Growth Plan 2022” which marks a step change in government policy, both financially and ideologically. The view of the new government is summarised by the assertion that “Economic growth is the government’s central mission” and to achieve this “the government must cut taxes, streamline the public sector, and liberate the private sector.”
As always, we disregard the political or social biases with our comments and focus on the reality of facts, or importantly, the facts so far. As the chancellor noted when challenged on the financial prudence of their plan, the new regime had been in place 19 days when it was issued and there will be additional measures in the future. Those doubting the priorities of the government and where these measures will be implemented, however, need only to focus on the highlighted quotes from the mini-budget and then consider the likely economic implications.
Currency markets have been in focus as sterling initially reacted negatively to the news, with fears that the higher-than-expected levels of borrowing would cause sustained higher inflation and, in turn, higher interest rates from the Bank of England which would have significant implications on the cost of government financing at a time when this already stands at historical highs.
However, part of the uncertainty may be due to lack of detail on how the stimulus package would be financed which provides additional risk in market pricing – back to the relevance of the facts so far, and the likelihood of further communications within the theme of the government’s chosen central mission. A Conservative government that has just taken a very open and public step to the right will be acutely aware of the financial markets’ need for information and aversion to uncertainty, so we must assume a pro-business regime will adopt an operating framework to match.
What next? Initially, more uncertainty, particularly as the government and Bank of England (BoE) establish an equilibrium on fiscal stimulus and monetary restraint to break the cycle of higher inflation and higher interest rates. For growth to reach the government’s stated objective of 2.5% that will need to happen sooner rather than later, and more than likely after an almost inevitable initial recessionary period. The focus on the private sector should, in theory, be positive for businesses as the government has identified them as the solution to remedying the current economic problems. However, this is clearly a significant risk at a time when government finances are already stretched, and the macroeconomic environment is as uncertain at any point since the global financial crisis in 2007-08.
At our client webinars we have emphasised the likelihood of heightened volatility for a number of years and the implications for financial markets over the short, medium and long term. The short-term risks for UK-based investments have certainly increased with the announcements on Friday and what may be perceived as bold in some quarters has equally been dismissed as reckless in others. While clearly our portfolios are not immune to the prevailing negative market environment, we continue to emphasise the foundations for dealing with the current conditions lie in a well-diversified, global approach to assets that have long-term potential to weather the immediate storms and deliver returns over the longer term. Risks are clearly elevated at the moment and the government will need to provide more clarity on how the stimulus will be accounted for to soothe the nerves of investors.
Whether you are just starting out on your financial journey or an experienced investor, taking professional financial advice is an important step to ensure your plans are on track.
We look at how to work out the amount of income you could need in retirement and why it is important to have a plan in place to ensure you have the retirement you want.
With a flexible pension drawdown, if you’ve passed away and your partners passed away the funds can actually pass down to your children and their children, so the family always benefits from your pension planning.
A property protection will trust is a type of life interest trust incorporated into a will for couples living in England and Wales who jointly own the family home. With this type of trust, you can protect at least half the value of the property to pass on to your children or chosen beneficiaries.