As we hurtle towards a world of uncertainty after Brexit, now is a good time to check your finances are protected. Ask yourself the following questions right now:
1. Are you saving for a rainy day?
Let's face it, we have plenty of rainy days ahead, literally and metaphorically. If the economy shrinks, pay rises won't keep up with inflation, and the cost of living will increase. If you have savings, check they are they protected - 96% of UK savings accounts are protected by the FSCS (Financial Services Compensation Scheme). For the best protection, save no more than £83,000 per institution (the extra £2,000 allows room for interest as the upper compensation limit is £85,000 per institution). If you don't have savings, it's never too late to begin. You can start small with an app that rounds up your purchases to the next pound and deposits the difference in a savings account.
2. Are you repaying your debts in the best order?
Repay your highest interest debts first, with credit cards and loans always taking priority over student loans. This will save you money in the long run rather than paying higher interest on larger amounts. If your debts are interest-free or have similar interest rates, repay the smallest ones first so you have fewer separate debts (and see results more quickly). Also check when any promotional interest-free rates run out on credit cards or if there are any charges for repaying loans early.
3. Do you check your finances daily?
Getting into a daily habit of checking your account could reap rewards (especially if you replace your daily coffee habit with it). The sooner you spot any fraudulent transactions (e.g. if your debit card has been cloned and £500 blown on a designer watch), the more likely your bank will repay it. Most people have heard of credit scores; you can find out yours for free then work on improving it if it's not where you want it to be.
4. Could you have a mis-sold pension?
Hot on the heels of the PPI scandal is the mis-sold pension scandal with compensation payouts reaching £40m in 2018. Seek independent advice on your pension and get claims advice now, in case you are one of the growing number of people who were poorly advised by unscrupulous financial advisers.
5. Have you updated your budget lately?
Our lives can change very quickly. It pays to update your budget regularly and live by the 50-30-20 rule (50% of your income allocated to bills, groceries, commuting etc; 30% on fun and frivolities; 20% in savings, debt repayment or and investments). Also check your direct debits in case there are any that could be cancelled (cough *the gym* cough).
6. Are you about to buy a house?
If you're considering getting on the property ladder or remortgaging, consider a ten-year fixed rate mortgage. With the economy teetering on the brink of instability, spending a little more in terms of interest could reap rewards in terms of long-term security.
7. Have you consulted an independent financial advisor?
Although there are apps for this, it's still worthwhile seeking advice from an actual human being (preferably a certified independent financial advisor), especially if you have any big life changes on the horizon such as moving in together, buying property, marriage, children etc. They can conduct a financial health check and advise on protecting your assets and investments. You can also get claims advice and expertise on wills. Some workplaces offer this service for free; make sure you take advantage if they do.