08 April, 2010
With the first signs of Spring in the air it is the perfect season to tidy up your finances.
Now could be a good time to start to save or increase your savings. The New Tax Year has just begun and the new £10,200 ISA allowances are available. Savers should beware of when any ISA Bonus Rate disappears. This could change a market leading ISA Rate into a rate that is less than attractive.
Existing ISA holders should also check their existing rates because if they are on a variable rate they could find that this rate is quite different to the rate they took out a few years ago. ISA transfers are available to those savers whose rates are no longer competitive.
One quarter of all homeowners are reportedly currently grabbing the opportunity to make overpayments on their mortgage while interest rates are low. Most lenders allow overpayments of up to 10% of capital each year but policies do vary.
Homeowners need to review their payments and evaluate if their lender calculates mortgage interest daily or annually and what penalties apply to their particular mortgage deal, if any. On a 25 year repayment mortgage of £100,000 at a rate of 3.5%, Overpaying by just £50 a month would reduce the mortgage term by 3 years and 6 months. This would save more than £14,000 in interest payments. It also makes sense to check if your current mortgage deal is competitive or if a shorter home loan term would be more appropriate.
Most People don't pay enough into their pension funds to fund a realistic retirement income. Pension payments need to be realistic but the tax relief available should not be ignored.
Existing investments may need to be reviewed or rebalanced in light of lower interest rates and changes in the equity, bond and property markets.
It is a good idea to sit down with an Independent Financial Adviser at least once a year and review what you are doing with your money. Spring Cleaning your finances this year could be so much more important than ever especially if you haven't looked at things since before the Credit Crunch.