Financial matters

No one likes to think about it, but we are all getting older.  The times when we knew a pension would be waiting for us has have all but gone, and it is vital to start thinking about our financial standing in the future.  With State pensions a thing of the past for most people, it is now our own responsibility to take matters into our hands in regards to our finances when we retire.

We work our whole lives and as the retirement age approaches, it would be nice to think that we could look forward to our “golden years”, without the dread of wondering how we are going to live on very little money.  That is why it is never to early to start thinking about our retirement.  By starting to save a little towards our future each month now, when the time does eventually come, we can live our lives comfortably and do all the things we dreamed of doing when we were younger.

Stakeholder Pensions are a relatively new idea, consisting of a low cost pension that can be taken out to enhance our incomes in retirement.  The Stakeholder pension was made available to practically everyone since April 2001.
The Stakeholder Pension is a tax efficient method to allow you to buy a lifetime income when you do finally retire.  Meeting all Government standards, the Stakeholder pension has very low charges which the Inland Revenue contributes to after each payment you make.  For example, for every 78p you pay, this will actually be worth £1, regardless if you pay tax or not.
For those people who fall into the higher band of tax rates, you can apply to claim back more tax through your tax return.

There are several reputable banks which are offering Stakeholder pensions.  Contact your own branch to see if they have this on offer.  Quite often your own bank will offer you better rates for your Stakeholder pension.

One bank which has built quite a solid reputation as supplying the public with a quality Stakeholder pension is Halifax.  By starting a Halifax Stakeholder pension, you are rewarded by no initial charges and 0.9% annual charge which reduces as your entire contributions exceed £49,999.  You are also allowed to choose your own combination of investment funds and have a no minimum contribution level.

One of the key features of the Halifax Stakeholder pension is the fact that you can stop and start your contributions whenever you like.  So should your money be tight one month, you can always hold off for a while, then make up the difference later.  Like wise, should you suddenly find yourself with some extra funds, then you can put it to your Stakeholder pension.

The Stakeholder pension is an investment made by you and is based on the performance of the stock market or other investments.  By investing your money this way, you do run the risk that your money may fluctuate somewhat and not always in the direction you would hope.  Sometimes your money may go down and the money is not guaranteed.  These factors should always be taken into consideration before you make any decisions.

Credit card debt is a very big problem that is being faced by a lot of people who have been irresponsible and undisciplined in the use of their credit card. Though some might have landed up with credit card debt due to some unfortunate event/emergency in their life, most people carry a credit card debt due to their own wrong doings (i.e. wrong usage of their credit card debt). There are a lot of ways to pay off credit card debt and a lot of people do achieve this feat (i.e. are able to pay off credit card debt). Surely, to be able to pay off credit card debt is really a great achievement in itself for not everyone is able to pay off credit card debt. It takes a lot of discipline, restraint, planning and perseverance to finally pay off credit card debt. However, there is more to paying off credit card debt then just being able to pay off credit card debt.

Here we are talking about the life after you pay off credit card debt successfully. As mentioned before, of all the people that try to pay off credit card debt not everyone is able to pay off credit card debt i.e. there are some failures too. However, some people fail after they have succeeded in paying off credit card debt. These are those people who let themselves loose and go on a spending spree as soon as they pay off credit card debt. Soon, these people again land up with a credit card debt and are again trying to pay off credit card debt. So, its not enough to just pay off credit card debt, its equally important to maintain a debt-free status even after you pay off credit card debt; only then can you enjoy a stress-free life in the world of credit cards. So learn your lessons well and do not let yourself loose on the path to another credit card debt. Most of the rules that you followed when you were trying to pay off credit card debt, will also hold good after you have paid off your credit card debt. Here is a quick synopsis of things that you should take care of even after you pay off credit card debt:

1)    Do not overspend. Yielding to the sale offers for something that you dont really need, is a big mistake that leads to overspending

2)    Always remain within 70% of your credit limit.

3)    Make credit card bill payments in time and in full.

4)    Dont hold more than 2 credit card accounts (two are enough for anyone)

These are just very basic points to note about credit card debt recovery; you can add more based on your own experience and knowledge.

Protecting you and your loved ones in the event of your death or being diagnosed as suffering from a critical illness can provide financial stability and reassurance. Although this is a fact of life most people do not want to spend too much time considering, it is vital to take at least the time required to set in place sound mortgage protection. After which, you can be comforted with the fact that should the worse happen, your family will be taken care of financially.

Mortgage protection can provide you with either a life insurance only policy, a critical illness only policy or a combination of both.

If you were too choose a life insurance cover only policy, this would effectively mean that a cash sum will be paid out if you are to die, or if you are diagnosed as suffering a terminal illness, before the end of your insurance plan. For example, should your mortgage protection be in the amount of £120,000, this sum will reduce each month until the plan ends. The reducing amount is always in line with your outstanding mortgage.

If you were to choose critical illness cover only, this would mean that a cash sum would be paid out only if you are diagnosed as suffering from a range of illnesses specified in your document. A list of the illnesses can be requested before you agree to any terms and should be read in full. The cash sum will only be paid out in the event that after a diagnosis has been made, you are still alive 21 days later, before the end of the plan. Again, the cash amount reduces each month in line with your mortgage.

Or, you can choose to combine life insurance with critical illness for a fully comprehensive mortgage protection insurance. By taking out both life insurance cover and critical illness cover, a cash amount will be paid out in the event of your death or if you are diagnosed as having a terminal illness or one of the specified illnesses, whichever happens first, before the end of your insurance plan. Just like the separate critical illness and the life insurance policy, the combined option lump sum also reduces in line with your mortgage.

When applying for mortgage protection, a simple application form is required to be filled out in order to make an assessment. General questions in regards to your health, age and lifestyle will be made to obtain a current and relevant profile.

As with most types of insurance, exclusions will apply. For example, all illnesses must be declared when completing your application, as most policies do not allow current illnesses to be included in the cover. That means that only new illnesses can be claimed against.

There are several reputable mortgage insurance providers available. Companies such as Scottish Widows, Norwich Union and Standard life all have good reputations for supplying quality mortgage cover. Although it is always advisable to look into all other options to make sure you are getting the best possible deal for your requirements.

It comes as no surprise that the average household would like to save some money on their utility bills.  By taking the time to make sure you are with the best supplier, you can potentially save yourself up to £140 per year.

When asked if you are happy with the level of service or the amount of money paid towards electricity each year is acceptable, the majority of people would answer no.  It is simply not knowing enough about switching supplier which can sometimes keep us with our current supplier and hinder us from switching to a better, more cost effective electricity supplier.

An easy way around this dilemma is to get in touch with an independent financial adviser.  From doing this you can be sure to get impartial and confident advice.  Your independent financial adviser can take you through the process of assessing how much you are currently paying your electricity provider and look into alternatives to see if you would be better off switching supplier.
Although an independent financial adviser seems like the ideal solution, we are not all fortunate enough to have one.

Another option available is to research the information ourselves.  This is a less appealing solution and can be both boring and extremely time consuming.  A practical and efficient answer is to try an internet site which can do all the hard work for you.  Companies such as uSwitch and Find One can easily find the right supplier for you in no time at all.

Find One and uSwitch simply require your average yearly expenditure on your current electricity supplier.  By providing this information, Find One or uSwitch will search all other electricity suppliers to make sure you are getting good value for money.  You will then be given a list of other suppliers and how much you could save by switching.

The uSwitch service is completely free and you are under no obligation to change supplier at any time.  All it takes is a few minutes of your time and the rewards can be plenty.  The electricity suppliers are large firms which have good reputations and are regulated to make certain excellent standards of service.  So you can be sure that the company you do switch to, if at all, is trustworthy and will have high standards of service.

Many of the internet sites looking to find you an alternative and cheaper electricity supplier can also help you to save money on other aspects of your day to day life including gas, telephone an digital TV tariffs.  Maybe doing more than one search might be another way to save you even more money and at no extra hassle.

As electricity is such a huge part of our lives, we should never just take it for granted.  Electricity keeps our food refrigerated, then cooks it, keep us warm and provides light in our homes.  For something that important, it is worth taking 5 minutes out of our day to make sure we are getting the best service.

Each individual has a risk tolerance that should not be ignored. Any good stock broker or financial planner knows this, and they should make the effort to help you determine what your risk tolerance is. Then, they should work with you to find investments that do not exceed your risk tolerance.

Determining oneís risk tolerance involves several different things. First, you need to know how much money you have to invest, and what your investment and financial goals are.

For instance, if you plan to retire in ten years, and you’ve not saved a single penny towards that end, you need to have a high risk tolerance  because you will need to do some aggressive and risky investing in order to reach your financial goal.

On the other side of the coin, if you are in your early twenties and you want to start investing for your retirement, your risk tolerance will be low. You can afford to watch your money grow slowly over time.

Realize of course, that your need for a high risk tolerance or your need for a low risk tolerance really has no bearing on how you feel about risk. Again, there is a lot in determining your tolerance.

For instance, if you invested in the stock market and you watched the movement of that stock daily and saw that it was dropping slightly, what would you do?

Would you sell out or would you let your money ride? If you have a low tolerance for risk, you would want to sell out if you have a high tolerance, you would let your money ride and see what happens. This is not based on what your financial goals are. This tolerance is based on how you feel about your money!

Again, a good financial planner or stock broker should help you determine the level of risk that you are comfortable with, and help you choose your investments accordingly.

Your risk tolerance should be based on what your financial goals are and how you feel about the possibility of losing your money. It’s all tied in together.