Personal Finance

Do you fancy getting ‘financially fit’ for Spring?

Tax-free interest on your savings is always a bonus, even when savings rates have seen better years.
Tax-free interest on your savings is always a bonus, even when savings rates have seen better years. Tax-free interest on your savings is always a bonus, even when savings rates have seen better years.

IT'S the perfect time, because, in terms of our personal finances, we have just celebrated a happy new year.

The financial year, of course, does not begin on the first of January, but on the sixth of April, and of course for many of us, we have a little more time on our hands this year to think about the opportunities this presents.

That’s why the coming weeks are a good time for an annual spring review of our finances, a time when we can see what we’ve got, what we still need, and what new allowances the Spring has brought our way. Otherwise, we run the risk of letting this slip, and in years to come, we might look back and see how we missed out.

Think about ISAs (individual savings accounts). For example, if you have one or several, your annual allowance just renewed and you can save up to a £20,000 this year (by April 2021). The main types are the cash ISA, the stocks and shares ISA, and the lifetime ISA - or a mixture of all of them.

The lifetime ISA is for either helping you to buy your first home or save for later life. To open one, you must be 18 or over but under 40, and you can save up to £4,000 each year, until you’re 50. That comes out of your £20,000 annual allowance.

The tax aspect of the lifetime ISA is attractive: the taxman will add a 25 per cent bonus to your savings, up to a maximum of £1,000 per year. Great way to claw back some of last year’s tax.

Of course there’s a different question about ISAs, for those who haven’t got one yet. Could this be the year to put that right? Tax-free interest on your savings is always a bonus, even when savings rates have seen better years.

Let’s touch quickly on insurance, or as I prefer to say, ‘family protection’ products, because they are really as much to protect the financial security of your family, and keep a roof over everybody’s head, should your income be lost through a tragic event.

The two main types (there are many) are life insurance and critical illness insurance, both with several variations and types, making advice on these, and on all the products we’ve mentioned, very, well, advISAble.

Life cover is the well-known insurance that pays out to your family when you die.

Critical illness insurance (CI) pays out if you have to stop work when hit by a serious health setback. It covers the main conditions of cancer, heart attack, stroke, MS, and major surgery, but covers many other conditions as well, depending on the policy. Again, it’s well worth asking for financial advice on the various types.

And last for today, we get to your pension. This is definitely one where forward planning is of great benefit.

It’s a great time to check up on how your retirement plan is going, or if you don’t have one yet, to think about setting one up.

Your existing pension savings are invested, mainly in stocks and shares, but the various investment funds where they put your money vary in terms of performance.

However, you can ask an adviser to switch your money into the top-performing funds at any given time, to ensure that your pension is growing as quickly as those spring dandelions that have been popping up all over the garden this week.

When the flowers are out, it’s a great time to get yourself financially fit for Spring!

Michael Kennedy and Shaun Doherty are independent financial advisers and pensions specialists, and can be contacted on 028 71886005. Further information on Facebook at ‘Kennedy Independent Financial Advice Ltd’ or via www.mkennedyfinancial.com