News/Events

Moving your money around [31st July 08]

It does not surprise me that people are keen to examine their re-mortgage options as it is the largest debt that most will ever have, so managing this debt is, of course, of utmost importance. 

It does surprise me, however, that people who insist on finding the best Car Insurance deal every year appear to be happy to neglect all other policy holdings which could be suffering just because they’ve always held them and they do not expire annually!

My message is’ WAKE UP’! Keeping your head in the sand can surely only lead to suffocation!

Policies available, rates, charges and legislation are all subject to change and yet many continue to be blissfully unaware of possible detrimental changes to their plans, some even after they have been informed of such by statements and letters from the provider!

Why – I ask myself are we happy to continue to plod along like this? Fight off the inertia and arrange a full review with your IFA. Still not convinced? Perhaps the following will prompt you to re-consider.

A number of Pension Providers are still charging a monthly policy charge and this is normally inflation proofed so it goes up every year. It even gets collected if you stop paying contributions thus eroding your future pension fund value.

Many people now have pensions which are in closed funds eg those closed to new business, with providers such as Abbey Life, Royal Sun Alliance, Scottish Mutual, Phoenix, Equitable Life, London Life, AMP/NPI and Pearl. This money may still be safe, but, could be parked in a cul-de-sac as the investment managers have little incentive to perform, and the performance of their funds have suffered.

I find that many clients rank their pensions as a low priority as they cannot draw on the funds until retirement, but I can assure you, when they retire, the fund will be your highest priority. So, review your pension now to make sure you are not being adversely affected before it’s too late.

Also if you have had the same Individual Savings Account, ISA (nee PEP) for many years, is it time to move it on? Do you know how is the fund performing against others in the same investment sector? Also it may be of benefit for you to consider re-registering your plan onto a WRAP or investment supermarket platform to allow for the majority of your investments to be held in one place. Re-registration costs nothing and benefits include reduction in paperwork and mail, online access to your portfolio, values calculated at the press of a button whilst fund switch purchases and sales can be made on line. 

Can you potentially save money on your Life Insurance Policies? Life insurance rates have reduced as we are all living longer so you should review any older arrangement to ensure the premium is still competitive. 

Reviews are valuable – cost of living is rising and we are all trying to cut back on expenditure so you may be able to save money in other areas like premiums on life plans.  Also you may be able to increase returns from any savings invested by seeking better growth and minimising the sometimes high costs of management charges.

You should review all financial arrangements regularly, speak to your IFA. Langtons is offering all readers a free initial review without charge or obligation.

This article was written by Langtons - Published in the Western Morning News, Money, 31st July 2008