With the new year in its infancy, this time provides an ideal opportunity to get finances in order. In light of record low interest rates, soaring inflation and increasing costs for essentials, it is more important now than ever for people to make the most of their money.
So to that end, our social enterprise, Age Scotland Enterprises, have put together some top tips to get in the best possible financial shape for the new year:
• Get to know your finances. Ensure that you are aware of when items such as car insurance need renewing so that you can budget accordingly.
• Before renewing or buying any financial products, shop around and fully review all the options available so that you buy the best product for your individual needs.
• Read the small print when buying insurance or other financial products. The cheapest offer might not always provide best value. Look out for cancellation fees and take advantage of companies offering interest free direct debit payments – it helps you budget monthly and doesn’t cost a penny more.
• Seek impartial advice and clarify complex financial information before making any decisions.
• Consider all your financial options. If you’re a homeowner and faced with less income than expected, equity release may be an option to boost your income. While not right for everyone, it is one way of ending a scenario where you are asset rich but cash poor in your later years.
• Maximise your retirement income. About four million older people are entitled to pension credit, yet about one in three of those eligible are still not claiming it. If you’re one of them, you could be missing out on hundreds or even thousands of pounds a year. Even if you are only entitled to a small amount it’s still worth claiming pension credit, as it can help you qualify for other benefits.
• Don’t put off important decisions. Do you have an up to date will? Not having a will means you have no control over your possessions when you’re gone, which can cause additional distress for your loved ones during a difficult time.
• Think ahead. Have you ever thought of purchasing a funeral plan? A good funeral plan enables people in later life to fix the cost of their funeral at today’s prices and remove the worry about future price increases and rising inflation, offering peace of mind to family and friends.
• Keep your family informed of any changes you make to your financial affairs. Make sure you keep a complete record of your finances which can be accessed by family members or relatives in case of an emergency. Our sister charity, Age UK, offers a free LifeBook which can help you organise important financial and personal information. If you would like to order a free LifeBook call 0845 685 1061.
We hope these points will help you with your financial planning in 2012. Do you have any more top tips for helping out with finances over the course of the year? If so, we’d love to hear them. Just pop your ideas in the comments section below.