I think many of us suspected that life after lockdown was not going to be easy, even before we knew that there was going to be a war in the Ukraine. We are now seeing the cost of energy on the increase, together with the Bank of England base rate being increased again this month to 1%, which is the highest level for 13 years.*1
With the price of many of our essentials on the increase, what would my advice be for approaching this period of time? My first piece of advice, as I have said many times before is to budget. None of us know how long this duration of increased prices will continue and I think it’s important to avoid getting into debt. Many of the people I have talked to during lockdown said that they enjoyed the simple life and I do think it can help to look back at this time.
It is very easy at times like this to think about stopping Pension and life insurance premiums. However, yet again COVID has taught many people that we don’t know what is round the corner, and therefore this is a reminder of the importance of insurance.
With Pension premiums it can often be hard to see the benefit of putting aside money for a period of time that we may not see for many years ahead, whilst at the same time we are struggling to put food on the table and pay for heating. Nevertheless my advice, yet again would be to think very carefully about this.
Time goes by very quickly and we can always find reasons for not reserving funds for our future. However, it is important to remember that retirement is a time that generally we will have little or no income coming in, and we will be totally reliant on the assets and savings we have accumulated. If you have not already done this exercise I would suggest looking at the income needed in retirement and then also looking at whether you are on target to be able to fund this level at your chosen retirement age.
We do offer a free without obligation consultation so if you do need help with budgeting why not pick up a phone today and book a free without obligation consultation.
*1bbc news 05.05.2022