Do you review your financial plans, pensions, savings and investments regularly? If you don’t, there are plenty of very good reasons why you should start doing so.
The idea of a financial review is quite simple: you make a list of all the financial products you’ve signed up to – such as your mortgage, life insurance or income protection and your investments, including any ISAs and pensions – and make sure that the choices you made at the time still fit in with your plans and objectives.
Your starting point should be to dig out the most recent annual statements you have and, if you don’t understand them, consider booking an appointment with an independent financial advisor who can make sense of it all.
If you’re considering seeking professional financial advice on the options available to you, we’ve partnered with nationwide independent advice firm Fidelius to offer Rest Less members a free initial consultation with a qualified financial advisor. There’s no obligation, however if the adviser feels you’d benefit from paid financial advice, they’ll talk you through how that works and the charges involved.
Fidelius are rated 4.7 out of 5 from over 1,500 reviews on VouchedFor, the review site for financial advisors.
Here, we look at how to make sure a financial review becomes something you do regularly, so that you can be certain that your money is working as hard as it possibly can for you.
Make a date with your money
Many of us tend to put off dealing with our finances for as long as we possibly can. So:
- Set a date in your diary for a financial review. You don’t have to plan it months in advance; it can be whenever it suits you. But make sure that you check all your finances every year; more frequently if you think you need it.
- Get organised in advance. Set aside half an hour or so to get together all the paperwork you need (bank statements, mortgage statements, ISA balances etc). If you don’t have this information before you start you may be tempted to give up.
DIY versus calling in the experts
It’s up to you whether you review your finances yourself or get the help of a professional such as an independent mortgage broker or an independent financial advisor.
With investments and certain insurance policies (such as stocks and shares ISAs, pensions and life insurance) professional help can prove invaluable as unless you’re a real expert you may not know whether your plans are performing well or not. Learn more in our article How financial advice could boost the value of your pension by £47k.
If you’re reviewing your mortgage, remember that it isn’t just about getting the lowest rate, as your needs change you may find you want to switch to a different type of mortgage. You may want to remortgage to an offset mortgage or a flexible deal, so you can pay off your loan as quickly as possible.
With an offset mortgage you keep your savings in a linked account with your mortgage. You only pay interest on the outstanding balance so it can be good way of cutting years off your mortgage term. You can also easily withdraw money in your offset account. You can find out more in our article What is an offset mortgage?
Want to speak to a mortgage advisor? Speaking to an experienced mortgage advisor can help you to understand your options and get a great deal on your mortgage.
If you’re looking for expert mortgage advice, you can get a free consultation with an independent mortgage adviser at Fidelius. Speak with a qualified, FCA-regulated, independent mortgage adviser you can trust. Rated 4.7/5 on VouchedFor from over 1,250 reviews.
When it comes to reviewing your life insurance, it’s not just an opportunity to see if you can save money but a chance to make sure that you have the right amount of life insurance cover and to see if you need a different type of policy (for example, one that lasts throughout your life or one that runs for a specific term). Read more about the different types of protection you might need in our guide Am I protected financially?
Why your pensions and investments need regular reviews
Pensions and investments are meant for the long term, but that doesn’t mean you should ignore them for years. Many of us make decisions without thinking of how they fit in with investment plans we’ve already got and policies we’ve already taken out.
You may have too much money in one type of investment which means you’re taking on more risk than you realise.
Even if your money was initially carefully split between shares, bonds and cash when you invested it so that you reduced the risk, one asset (such as shares) may have done better than others, which means they will need ‘rebalancing’.
Rebalancing simply means selling off some of those investments that have risen sharply and buying more of others that have remained stable. It may sound counter intuitive. Why would you want to get rid of investments that have done well? Firstly, you don’t know how long they’ll carry on doing well for and secondly you the whole idea of investing is to buy when prices are low and sell when they’re high. Take advice so you do it in a tax-efficient way.
You also need to regularly check the management team looking after your investments. If your fund is being managed by professionals (rather than just tracking a stock market index like the FTSE 100 or FTSE All-Share), the top-performing manager who was in charge when you took it out may have left, and there’s a chance their replacement may not be as good.
You may also want to think about whether you could – or should – consolidate any of your investments. Over the years, you may have accumulated many different accounts and policies. If the numbers start to get out of hand, think about streamlining what you have. Learn more in our guide Should I consolidate my pensions?
This is where professional advice could prove invaluable, as you don’t want to risk cashing in the wrong investments or accidentally incurring a large tax bill. Read more in our article When should I get pension advice?
A final thought…
Reviewing your finances doesn’t have to take long, or be complicated, and making sure you’re on top of your money matters can help reduce the risk of any nasty financial shocks later down the line.
If your biggest concern as you approach retirement is what to do with your pension savings, the Government’s Pension Wise service, run by the Pensions Advisory Service and Citizens Advice, provides people aged 50 and above with free guidance on their pension choices at retirement. You can give them a call on 0800 138 3944 to book a free appointment, or you can book one via their website.
It’s always worth taking advantage of a free appointment with Pension Wise, however if you want advice that’s tailored to you specifically, you’ll also need to speak to a financial advisor, as Pension Wise can only provide general guidance and not individual recommendations. In this case, our guides How to find the right financial advisor for you and How to get advice on your pension might be helpful.
If you’re considering seeking professional financial advice on the options available to you, we’ve partnered with nationwide independent advice firm Fidelius to offer Rest Less members a free initial consultation with a qualified financial advisor. There’s no obligation, however if the adviser feels you’d benefit from paid financial advice, they’ll talk you through how that works and the charges involved.
Fidelius are rated 4.7 out of 5 from over 1,500 reviews on VouchedFor, the review site for financial advisors.
* Links with an * by them are affiliate links which help Rest Less stay free to use as they can result in a payment or benefit to us. You can read more on how we make money here.
Get more for your money with Raisin UK
Raisin UK provides a free-to-use savings platform that allows savers to browse, open, and manage accounts with over 40 FSCS-protected banks and building societies.
Apply for savings accounts in just a few clicks, and they’ll handle the rest. Sit back, relax, and skip the paperwork as you watch your money grow.