Guest article from unbiased.co.uk, the UK’s number one site for people seeking professional advisers.
You should never ignore those little aches and pains – they can quickly turn into something more serious. And what’s true of your physical health is just as true for your money. Here are the best reasons to visit the money doctor.
Being in good financial health simply means that your money is working as hard for you as it could, and isn’t wasting away through laziness or a poor diet of low-interest savings accounts. Look out for the following warning signs that tell you a check-up is overdue:
You’ve lost track of one or more pension schemes
Up to one in ten pension saver have actually lost track of at least one pension, according to research from Friends Life. You can track down a lost pension using the Pension Tracing Service (call 0845 6002 537).
As for the rest, ask a financial adviser about whether you should consolidate them (sometimes a good idea, sometimes not).
A financial provider keeps sending you letters and you keep binning them
Did you used to be a customer?
Do you still have savings with this bank that you’ve forgotten about?
Do you still have a credit card with that provider which you no longer use? (This can adversely affect your credit rating and put mortgage applications at risk).
Investigate these mysteries – they could end up being significant.
Someone asks how much interest your ISA pays and you can’t tell them
Many people don’t realise that the interest rate they start upon may only be a temporary special offer.
So your initially generous rate may plunge to almost nothing after a couple of years. Keep checking, and switch if necessary.
The balance of your current account goes up every month
No, it’s not.
Money sitting in your interest-free current account is losing value all the time, thanks to inflation. You should aim to keep your monthly balance as static as you can, with just a few hundred pounds as a cushion against unexpected costs.
Any obvious excess should be regularly siphoned off into savings (e.g. an ISA).
Your mortgage repayments seem to have increased
But these generally last only for between two and five years (depending on the deal), after which the rate reverts to the lender’s standard variable rate (SVR).
You should always set a reminder to remortgage once your deal expires, but planning several years ahead catches many people out.
Play it safe and review your mortgage annually, and get a better deal if you can escape without a penalty.
Your home has risen in value
Well, not exactly bad.
But it could mean that you’re now paying more than you need to on your mortgage.
If the value of your home has risen, then you could be eligible for more competitive mortgage deals – e.g. lowering the rate of interest that you have to pay.
So you can remortgage to arrange lower monthly payments, or even better, a shorter mortgage term.
Your stocks & shares ISA provider writes to you about changes you don’t understand
Don’t just assume that everything is all right, and do read the regular reports that they send you. Actively monitor what is going on, and discuss any issues with your financial adviser if you’re unsure.
You need to know when to leave your funds where they are, and when you need to start checking out the competition.
You’ve had a major life change
Getting married, moving house, starting a family, a major career change or starting a business are all what might be called ‘advice moments’ – pivotal points in life where you need to rethink your financial affairs, ideally with professional help.
Bereavement features on this list too, with the potential issues of inheritance and/or loss of family income to consider.
Something out there has changed
Prime examples include stock market movements, house prices, interest rate changes or – most recently – the introduction of pension freedoms.
The old pension rule book has been thrown out of the window, and how the retirement landscape will develop in years to come is still being hotly debated.
This means that if you have any retirement plans currently in place, you will need to go back to the drawing board and reconsider your new range of options – even if you end up making the same decision.
You’re ten years or less from retirement
The final run-up to pensionable age is a critical time – actions taken during this period can greatly increase the amount of spending power you have in retirement (or decrease it, if you make the wrong choices).
Similarly, if you’re almost at the point of retirement then seeking advice is vital if you’re to make the most of pension freedom.
Remember, your financial affairs are like a living, breathing thing, constantly changing. So it’s only prudent to check their health regularly, by checking in with a financial adviser.