Protect your finances

Back to News & Views

How to maintain your financial wellbeing

As interest rates continue to rise, there are a few things that you can do to make sure your personal finances remain in good standing. It is always important to remain on top of your finances, but especially during times of rising interest rates, as many people start to feel the squeeze.

Here are some points to consider to protect your finances and maintain your financial wellbeing against rising interest rates.

1. Mortgages

Tracker mortgages will be the first mortgage products to feel the effect of interest rate rises. If you are on a variable rate tracker mortgage, your monthly repayments will immediately increase. This is because the amount of interest you are charged on your debt with this type of borrowing varies, depending on the rate set by the Bank of England.

If you’re on a standard variable rate mortgage, you might also want to consider switching to a fixed rate deal as you’re likely to find more competitive rates. This will protect you from any future rate rises for the duration of the deal. However, you might need to act quickly as mortgage rates have been creeping up for months and are likely to continue doing so.

2. Credit cards

The rate of interest on your credit card can increase with rising interest rates, and you may find the cost of alternative credit cards has gone up too. If you have a good credit rating and have outstanding credit card debt, it may be appropriate to consider looking to move your debt to a cheaper rate or to a 0% deal.

0% balance transfer credit card deals are still currently available, as well as 0% purchase deals, meaning that you could cut the cost of your debt if your are paying high rates of interest. However, the best deals are only available to those with good credit ratings and those who have poorer scores may find themselves trapped on higher cost debt.

3. Pensions and investments 

As many people across the country are feeling the squeeze of rising interest rates and a cost of living crisis, it’s more important than ever to make sure your finances are in good shape. One way to do this is by making sure you don’t touch your pension or investments. While it may be tempting to dip into these savings to help make ends meet in the short term, it’s important to think about the long-term impact this could have on your retirement plans.

Drawing down on your pension or selling investments could leave you worse off in the long run, so it’s important to consider all of your options before making any decisions. Consolidating your old pensions into one could help you cut down on management fees and give you a better picture of how your finances are looking. But before transferring your pensions it is essential to discuss this with your Succession Wealth Planner.

4. Review spending

Rising interest rates can also be a real problem and push up the cost of items you are buying. Going through your spending with the finest tooth comb can help you find areas where you may be able to cut back, and save money in the long run. Keep an eye on your budget and make adjustments as necessary to ensure that you are aware of your outgoing costs and can adapt your spending accordingly. Being able to see exactly where your money’s going will help you to pin down where you can make savings and cuts.

Ask yourself: What’s coming in and going out? Can I get something for cheaper? And (often the hardest of all): Do I really need that? Look at the money you have coming into your home – whether that’s just you or with someone else. You want to look at every single thing that’s going out (there may be a lot more than you think).

5. Emergency savings

When it comes to financial security, one of the most important things you can do as we start to feel a squeeze on personal fiancees, is to keep emergency savings aside for when you may need them. Having a nest egg that you can tap into in times of need can help you weather a rising interest rates storm. One method is to create a dedicated savings account that you only use for this purpose. This way, you can easily access the funds when you need them but they remain out of reach for everyday spending.

Aim to build up enough to cover between three to six months’ expenses, or as much as you can afford. The best thing to do is make room for your savings in your budget as one of your outgoings. By doing so, it’ll help you see your savings as a must, rather than a must-do-later. And if you can, set up an automated payment from your normal bank account straight into your savings account – that way you don’t even need to think about it.

Don’t forget your long-term financial security

It’s important to think about the long term during times of rising interest rates when it comes to your finances. Making short-term decisions could jeopardise your long-term financial security. To discuss your situation or plans or for further information, please contact us.

INFORMATION IS BASED ON OUR CURRENT UNDERSTANDING OF TAXATION LEGISLATION AND REGULATIONS. ANY LEVELS AND BASES OF, AND RELIEFS FROM, TAXATION ARE SUBJECT TO CHANGE.

THE VALUE OF INVESTMENTS AND INCOME FROM THEM MAY GO DOWN. YOU MAY NOT GET BACK THE ORIGINAL AMOUNT INVESTED. PAST PERFORMANCE IS NOT A RELIABLE INDICATOR OF FUTURE PERFORMANCE.

 
 

Book your FREE, no obligation discussion today. Schedule Appointment

Sign Up to our mailing list - Receive regular news, tips and financial commentary from the Gemini Team.

Latest News

  • Cost-of-living crisis delays homeownership, having children and retirement Rising living costs have been so significant in recent months that most UK households will have noticed a squeeze on their monthly budgets. Not only does this have a direct impact on people’s lifestyles, even though they are making every effort to cut back, but it has a knock-on effect on their lifelong goals such as owning a home or retiring comfortably. [...]

  • One in six over-55s have no pension savings yet Despite the fact that the government has been trying to encourage people to save for their retirement through initiatives such as auto-enrolment, there are still too many Britons who have no pension savings at all. Research reveals that a fifth (20%) of people still have no pension savings at all, and people nearing retirement aren’t doing much better. [...]

  • What to consider if you have multiple pension pots The employment landscape has evolved significantly over the last few decades and changing jobs multiple times before retirement is now very much the norm. But did you know, there is an estimated £9.7 billion of unclaimed UK defined contribution pension funds? [...]

  • Minimising the impact on your personal finances If you’re a higher rate taxpayer, the freeze on the Income Tax threshold will have meant an increase in your tax bill. The reason for the increase stems from the Chancellor’s decision in April 2021 to freeze the higher rate tax threshold rather than increase it in line with inflation. [...]

  • Preparing both ‘the family’ and ‘the money’ for the transition of wealth to the next generation If you want to pass wealth on to your children and grandchildren, it’s wise to contemplate when it might be best to make that gift. Should you transfer wealth during your lifetime — or after? [...]

  • Deciding whether to withdraw cash from your pension pot Choosing what to do with your pension is a big decision. If you’ve been saving into a defined contribution pension (sometimes called ‘money purchase’) during your working life, from age 55 (age 57 in 2028) you need to decide what to do with the money you’ve saved towards your pension when you eventually decide to retire. [...]

  • How to protect and grow your wealth over time Inflation is one of the most important factors that savers and investors must take into account when making decisions about their money. Although inflation can eat away at the purchasing power of your savings, it can also create opportunities for profit if you invest in assets that are expected to increase in value faster than prices overall. [...]

  • No one-size-fits-all answer to this question When is the right time to retire? There’s no one-size-fits-all answer to this question – it depends on your personal circumstances. However, there are a few things to consider that may help you decide when the right time for you is. [...]

  • Millions of savers think inflation will leave them better off Despite inflation reaching its highest rate for many decades, some people in the UK are not aware of its impact on their finances. More than half of all cash savers (52%) don’t know what impact inflation will have on the real value of their cash savings over time [...]

  • Just two out of five have planned for inflation in retirement Retirement planning can be complex at the best of times, so it is easy to understand how some people can find it daunting to take into account factors like inflation. The reality is that inflation hurts everyone, but it can be especially harmful to retirees. [...]

  • What’s the right emergency fund amount for you? An emergency fund is money you put aside to cover a financial shock. This could be losing your job, or a large, unexpected expense. Building an emergency fund can help prevent your needing to borrow money or make difficult financial decisions in those moments, by giving you savings to fall back on. [...]

  • 3 tips to maintain your financial wellbeing The rising cost of living is one of the most pressing issues facing many families today. The price of food, energy, fuel and other necessities has risen significantly in recent months. This has made it difficult to make ends meet and has put a strain on many household budgets. [...]

Gemini Wealth Management Ltd is Authorised and regulated by The Financial Conduct Authority Registered in England & Wales No. 5919877 Registered Office: Gemini House, 71 Park Road, Sutton Coldfield, West Midlands B73 6BT The Financial Conduct Authority does not regulate tax and trust advice, will writing and some forms of buy to let mortgages. The guidance and/or advice contained in this website is subject to regulatory regime and is therefore restricted to those based in the UK.

Website by Mellow Marsh Software
© Gemini Wealth Management Ltd
Privacy Notice | Cookie Policy