Five financial planning tips for 2019
1. Check your State Pension forecast
Do you want to know when you can retire and what the state pension is? The government’s website is a great place to start. At the moment you can claim the new state pension if you are:
- a man born on or after 6 April 1951
- a woman born on or after 6 April 1953
However, this is going to rise. By 2020 it will have risen to age 66 and again to age 67 between 2026 and 2028.
The amount you will receive from the state is dependent on your National Insurance Record. You’ll need to have at least 10 qualifying years to get any state pension and to receive the maximum you need 35 qualifying years.
This can get complicated, but if you get a state pension statement, you can work out whether there are gaps in your NI record and then you may be able to get NI credits or make voluntary NI contributions instead.
2. Dig out your old pensions and see what they’re worth
If you’ve had multiple jobs, it can be tough keeping track of all your different pension schemes. To kick off 2019 in a more positive way, you could surprise yourself with what’s floating about in old pension schemes. The easy way to get started is to use the free pension tracing service and contact your scheme administrators asking for an up to date pension statement.
Once you have the details, you may wish to consolidate your pensions into one manageable fund. Our article on pension consolidation has more information – or you could speak to a Wren Sterling adviser to make sure you’re doing the right thing.
3. Check whether your protection arrangements are still relevant
When was the last time you reviewed your protection arrangements? Since you last took out a life insurance, critical illness or income protection policy there are many factors that could mean it is time to get a fresh quote. These are some examples:
- You have a new job and your income is higher
- You have a new job and your benefits are not as comprehensive as your previous job, so you are down on cover
- You have unfortunately suffered a serious illness
- There’s been a reduction in your household income so your income is the sole income
The best way to arrange insurance is through your financial adviser as they will know how much cover you require to make sure your financial plan is on track
4. Write a Will – or update you current Will
If you don’t have a Will – get one written! Without one, you will have no say in how your estate will be passed on to beneficiaries.
Similarly to your insurance requirements, a change in your circumstances since you last wrote a Will means it is sensible to review it with the aid of a solicitor.
These might include:
- You want to change the main beneficiaries of your estate
- Your assets have increased / decreased since your last Will and may be subject to different taxation (particularly the value of your family home)
- Some of your chosen beneficiaries have married or had children and this changes the way you want to include them in your Will
- You’ve divorced or separated from your spouse
The Financial Conduct Authority does not regulate taxation advice and will writing.
5. Make the most of your tax-free allowances
There are many tax-free allowances to make the most of in 2019. Here are a few of them to get you started:
- £20,000 ISA allocation
- £40,000 pension contribution annual allowance
- £11,850 income tax personal allowance
- £2,390 blind person’s allowance
- £11,700 capital gains tax threshold
- The first £2,000 in dividends you receive from investments
Levels and bases of and reliefs from taxation are subject to change and their value depends on the individual circumstances of the investor.
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