Understandably, a large amount of the focus of financial measures going forward will be geared towards helping businesses and the self-employed, but this may leave those saving and investing their personal wealth feeling stranded. Here are a number of things to consider this winter.
This might seem to be an odd place to start but, sadly, the criminal elements in society think no less of capitalising on people’s hopes and fears during a recession than at any other time. Most likely there will also be many phone and email scams, likely to centre on:
- Individuals posing as HMRC, either demanding money with threats of court action or offering refunds if bank details are given
- Boiler room scams, with investment ‘safe havens’ or guaranteed returns promised
- Pensions access, either encouraging encashment to prevent imminent value loss or phishing for details whilst posing as a provider
- Calls ‘from your bank’, regarding suspicious activity on your account.
The golden rule when online is “pause before you press”. Take that extra minute to check the details and cynically assess the credibility of what is being presented. If in any doubt, do not do what is being asked.
The same premise can be applied on the phone. Any genuine caller will be happy for you to ring back, on a different phone and using a number from (for example) the back of your bank card rather than one they give to you.
Scams aside, there are a number of areas in which pensions should be considered during the current crisis and most of these may merit input from an independent financial adviser.
It may seem counterintuitive to be thinking about putting money into your pension but, for those with the financial resources to do so, there could be rewards to be had. The value of your contribution could be substantially enhanced if it coincides with market recovery from the current lows.
If you are nearing retirement age in the next few years you should urgently look to speak to an Independent Financial Adviser about your pension arrangements to assess your options.
Final salary schemes and annuities
Final salary schemes offer certainty of income, but often also provide for a transfer value should the pensioner wish to ‘cash out’ and control their own pot of funds. Annuities are basically the opposite, allowing a pot of pension funds to be given up in return for an insurance company backed guaranteed income. The rates and terms applying to both are likely to be impacted to some extent by the current situation, and again we would recommend you take financial advice before you act.
The next step
To continue this article and find out about the benefits of things like gifting and ISA's, read the full piece in our magazine, Prosper, here. If you have any questions please contact Neela Chauhan, or your usual UHY adviser.