How to give your finances a lockdown spring clean

The UK lockdown has affected us all differently. Whether you’ve been working remotely, been furloughed, or found yourself homeschooling, your daily life will probably have changed a lot in only a few short months.

The impact of coronavirus on the economy has also been well documented. The FTSE suffered its largest single-day drop in 30 years, followed by a climb that marked its second-highest one-day rise in history.

The message from the financial planning profession has been clear: keep calm and carry on.

But, if you want to be proactive, now is a great time for a financial spring clean. And HDA is here to help. We might be working remotely at the moment but we’re only a phone call away. If you have any questions you’ve always wanted to ask but never found the time, get in touch now.

In the meantime, here are some financial housekeeping jobs to put on your lockdown to-do list:

Find lost pensions

You might know exactly where all your pensions are held and have a firm grip on their approximate values.

On the other hand, with many people holding multiple pensions – from previous employers or forgotten private schemes – if you’ve lost track, now is a great time to get your pensions in order.

Request up-to-date valuations from your pension providers and find out what funds you’re invested in too. Do the funds match your attitude to risk? Has this changed since your last check-in?

A 2018 report by the Association of Business Insurers (ABI) estimated that the value of ‘lost’ pensions in the UK could amount to as much as £20 billion. It cited ‘more frequent job changes and home moves’ as the biggest contributing factors in causing people to lose track.

If you think you have an old pension that you no longer have details for, you can use the government’s Pension Tracing Service to help locate the scheme’s contact details.

Review your insurance policies

If you have insurance policies collecting monthly direct debits that you’ve long since forgotten about, now is a great time to get the paperwork out and check what you’re covered for.

Life insurance, critical illness cover, income protection – you might have different forms of cover but are they right for you? Are they aligned to your stage in life, your current financial position, and your financial goals for the future?

Whether you find you’re sufficiently covered or not, remember that insurance policies need to be updated following certain big life events so now might be a great time to let your providers know if you have:

• Changed job or become self-employed
• Got married or divorced
• Moved house
• Paid off your mortgage
• Sold your business or retired

We can help you sort through the policies you have, checking which ones match your financial plan and whether you need more protection.

You might also want to consider putting your policies into trust. Insurance policies written in trust will usually fall outside of your estate for Inheritance Tax (IHT) purposes and we can help with this too.

Write a will

Another of those financial housekeeping jobs that can be easily forgotten, now is a great time to either write or review your will.

Having a will in place gives you control over what happens to your estate when you die. Conversely, dying without a will leaves your wealth subject to the rules of intestacy, meaning you and your loved ones have no say over what will happen to your estate.

Yet over half of UK adults don’t have a will in place.

If you want to leave an inheritance to your loved ones, writing – or revisiting – your will should be a priority. Remember that important life events might mean you need to review your will so check if it’s up to date and in line with your wishes.

Speak to us if you are unsure about any aspect of writing a will. We can talk you through the issues and introduce you to a solicitor who can help you put yours in place.

HDA has the tools to help

We might be working remotely, but here at HDA, it’s very much business as usual.

If you’d like help with any aspect of your financial spring clean get in touch. We can speak over the phone or via video call and answer any questions you have. We might be able to help you better understand your current finances as well as your long-term plan.

We have tools that help us get to grips with your finances and cash flow and use these to consider your future retirement plans. We can use these tools to help you make up any pension shortfall you have, or maybe even show you how to retire early.

Get in touch

If you’d like to discuss any aspect of your financial spring clean, get in touch. Please email enquiries@hda-ifa.co.uk or call 01242 514563.

Please note

The Financial Conduct Authority does not regulate estate planning, tax planning or will writing.