Welcome!

The basics of budgeting may be pretty obvious, but there’s no harm in scooting over them once again before we move on to the more practical stuff - like how to actually stick to your budget this time around!

Financial adviser Nicola Crosbie is on hand with some advice on how to start a budget and her top tips if you’re the type of person who finds it hard to stick to one.

Then, scroll down for our 4-step guide to setting up your own budget, our 3 easy budgeting methods, plus a handy app to help you follow each one!

Step 1: Build your budget

List your incomings and outgoings... You know the drill.

Be really honest about your incomings and outgoings. Try to knuckle down and use real numbers from last year - not just guestimates, which often err on the side of caution – and don’t forget inflation is pretty high at the moment, so factor in at least a 10% rise from last year for less regular but necessary things, such as your regular annual car service.

Top tip: Check your tax code! Check whether your tax code may have changed and work out if you need to amend any regular outgoings or payments. For example, might you want to change how much your pension contributions are this year?

When reviewing your spending, take an average month (i.e. not a school half-term or when you’re away on holiday) and split your spending into three categories: 

Essential spending:

• mortgage or rent
• utility bills
• credit card/loan bill
• mobile contracts
• groceries
• childcare
• travel to work

Non-essential spending:

• subscription services
• birthday presents for friends
• nights out
• holiday
• cinema trips
• clothes
• hobbies
• takeaways

And savings (if you’re indeed actually managing to do this at this stage).

Using a spreadsheet like the one below from Graham Wells, Financial Coach from GroWiser, and reviewing regularly is a really good discipline. It has all the categories of spend and income so you won’t miss anything.

Step 2: Identify your goals

You will have a pretty good picture of your finances by now, but what is it that you’re budgeting for? Maybe you’re saving up to help your children with a hobby, college/uni fees or driving lessons. Or you might be looking for ways to boost your pension or even just want to become more responsible with your day-to-day spending to avoid getting into credit card debt this year.

In any case, it might be helpful to think of your financial goals in one of two ways: short-term (max. 3 years goal) and long-term goals (retirement, etc). Knowing what you’re budgeting for gives you a specific, measurable goal, and should help you stay focused and committed to your budget in order to achieve it.

Step 3: Choose a budgeting plan

If you’re reading this, it’s not a wild stab in the dark to assume your budgeting skills need honing, but there are many budgeting plans out there to follow, so maybe you just haven’t found the right one yet. It comes down to what actually works for you. Here are 3 approaches that we think are simple and straightforward and we’ve even matched each one with a digital app you can use as well. Good luck – this time it can be different!

The jam jar approach

This tried-and-tested budgeting plan was popular when we all used cash a lot more than we do now. Traditionally, you would use your calculations for how much you need to spend on specific categories – e.g. rent, groceries, travel – and you would fill a glass jar with that specific amount of cash at the start of the month. All you’d have to do when it was time to pay that expense was to use the money from the jar. Simple.

Nowadays, most of our spending is done digitally, but you can still replicate the jam jar method by using mobile budgeting apps which allow you to allocate your money to savings “pots” or “jars” which function just like a good old-fashioned jam jar, only virtually.

Whether you use cash or manage your money online, the jam jar approach can help you to set individual, mini budgets for different types of expenses and can stop you from dipping into the money you intended for a particular category to spend on other things.

App for you: HyperJar

Those keen on the jam jar budgeting method may find this free-to-use app, designed to help you “budget like a boss” with a prepaid debit card, a handy solution.

Essentially, the clue’s in the name when it comes to how HyperJar works. You can set up digital “jars” in the app for certain types of spending – say, for example, groceries and utility bills – and then link them to your prepaid card to spend directly from your chosen jar at any time. To make matters easier, you can also auto-link specific shops to your jars, so that money will come out of your chosen jar automatically. You might want to link Lidl to your groceries jar, for example, or British Gas for your utilities.

HyperJar is free to use, has zero fees for overseas spending, and comes with the added bonus of discounts, freebies and rewards when you spend with certain brands – e.g. cashback and match-spend offers.

The 50:30:20 method

If the jam jar approach isn’t your style, then the 50:30:20 rule might be more suitable. This budgeting method revolves around one basic rule of thumb – 50% for needs, 30% for wants and 20% for savings.

As you’ve already calculated your after-tax income and your typical spending habits, following the 50:30:20 method should be quite straightforward. All you have to do is set aside 50% of your after-tax income for your “needs” - things like your rent/mortgage and groceries; 30% for your “wants” - such as clothes or a holiday; and 20% for “saving” - simply put, your savings account contributions.

Mobile apps such as Money Dashboard can help you follow the 50:30:20 method. You can split your regular transactions into “needs”, “wants” and “savings” to help you keep track of them all and make sure your spending is closely aligned to the right ratio.

App for you: Money Dashboard

Think the 50:30:20 budgeting method is the one for you? Money Dashboard pulls all your accounts into one place, so you can get a bird’s eye view of your spending, and allows you to create your own fully customised budgeting plan.

You can get started by linking to your accounts (current and savings, investments and even credit cards), reviewing your transaction history and then implementing the 50:30:20 rule with your own customised budget. Just look back over your spending and tag your transactions with the relevant category - “needs”, “wants” and “savings” - to find out if you’re on track. You can then set your own budgeting goals, like saving for retirement, and use the app to track your progress towards achieving it with helpful graphs and tables. Plus, there’s the option to set up push notifications if your account balance is getting low and you still have outstanding expenses, such as a chunky mortgage payment from your “needs” category.

Money Dashboard is free to use, fully customisable and a great all-in-one option for those with multiple accounts to keep track of. It’s especially apt if you’re adopting the 50:30:20 budgeting method and want full control of how you organise your money.

The pay yourself first system

Finally, the pay yourself first system is a popular way of making sure you achieve your financial goals while also keeping up with day-to-day outgoings. This one is pretty self-explanatory and involves putting money into your savings as soon as you get paid before you start paying the bills.

When you get your monthly payslip – or if you’re self-employed, whenever you get paid – you put aside a portion of the money you’ve earned into your savings first. The idea is that you’re able to keep working towards your financial goals, such as buying a house or retirement, rather than being left scrambling for cash to put in your savings at the end of the month after you’ve already spent most of it on other things.

The pay yourself first system, also called “reverse budgeting”, is a great way of making sure you stay on track to achieve your goals and don’t get tempted to spend the money you wanted to put towards them on lots of other little things over the course of the month. Budgeting apps such as Plum can be a handy way of automating your savings contributions too, so you don’t even have to think about it!

Remember that if you’re not sure which budgeting plan would work best for you, a financial adviser may be able to suggest the most suitable one for your unique situation and goals.

App for you: Plum

If the pay yourself first system is more up your street, then the Boring Money ‘Best for Beginners Award 2022’ winner Plum could be the budgeting app for you.

This handy app can be linked to your current account to analyse your spending patterns and suggest how much you can reasonably afford to tuck away for your savings. It uses artificial intelligence (AI) to review your outgoings, and depending on your saving “mood” - spanning from “shy” to “beast mode” - it will automatically set aside a proportion of your monthly income into a dedicated savings account on your chosen date. You can opt for a Primary Pocket, which allows you to withdraw your cash immediately, or the interest-paying Basic Easy Access Savings account, which currently pays 1.5% AER and requires about a day’s notice. There’s also the option of using “round-ups” to round up every transaction you make to the nearest £1 and tuck it into your chosen savings account automatically – so not a penny goes to waste.

Plum has a bright and simplified interface, and its automatic savings and round-up functions make it a great option for anyone trying to make the most of their savings.

Step 4: Track your progress and don’t give up

The last – and the most important – step in nailing the basics of budgeting is to check in regularly, work out where you can improve, and adjust if necessary. You may find using an app is making all the difference this time - it can be really rewarding to see the changes you’re making reflected on your screen on a weekly or monthly basis.

Once you've got your monthly budget routine sorted and you're able to turn your attention to saving for longer-term goals (1 year+), you may want to look at maximising the amount of interest you can earn on money you're putting aside for later. A good place to start is Starling Bank's Fixed Saver account, which offers a generous 3.25% interest rate for a fixed 12-month period (at the time of writing) - though you'll have to put in a minimum sum of £2000. You can set up multiple Fixed Savers at the same time and treat them like saving pots à la the jam jar method, only you'll have to commit to leaving them untouched for at least 12 months. But you may decide it's worth sitting tight for a bit in exchange for the interest you'll earn.

Starling also offers the option to set up instant-access 'Saving Spaces' to separate your money however you like, and though these don't pay any interest, you're free to take money in or out whenever you want instantly. So Starling could be suitable for you if you want to put your short-term savings in instant-access 'Saving Spaces' and also tuck your long-term savings away into an interest-paying Fixed Saver account - all in one place.

Above all, remember that if you do fall off the wagon, try not to be too discouraged - just start afresh the next time you’re paid and you’ll be back on track to your financial goals!

Interest rates shot up in 2022, leaving most of us with frankly frightening mortgage payments on the horizon. In recent years, we’ve become used to mortgage rates of 1% or 2%, but these now look like a thing of the past with the average 2-year fix hovering around 5.2%. So how best to plan for 2023? Our CEO Holly chatted to David Hollingworth from L&C Mortgages about his outlook for interest rates over the next year. Check out his thoughts in the videos below.

Read on to learn more about mortgage rates and how to make that all important decision – should you fix or go for a tracker?

Mortgages in 2023

Fixed rate mortgages

Fixed rate mortgages secure a fixed rate of interest for a fixed period of time. The good news is they offer certainty. The bad news is that these are much higher than we've become accustomed to. Why? In a word – high inflation means the Bank of England sets high interest rates to try and calm the economy down and bring inflation under control.

The days of 1-2% fixed rate deals seem well behind us now. Here's what David had to say about the outlook for fixed rate mortgages in 2023:

• Shorter-term rates are more expensive right now – e.g. a 2-year fix can be higher than a 5-year fix – this is not normal!
• 5-year fix rates are around 4.5% now.
• 2-year fixes are dipping below the 5% now after last year’s mini-budget hiatus.

Variable rate mortgages

Variable rate mortgages do not have guaranteed repayment levels – a common example of a variable rate is a base rate tracker. These are pegged to the Bank of England base rate so we're not protected from future increases. So rates go up – and so do your monthly payments. But you will typically get an offer at a lower interest rate than you would for a fixed rate mortgage today.

It's widely forecast that interest rates could start to fall back soon, so if you don't want to lock yourself in with a fixed rate, what can you expect from variable rate deals in 2023?

• If we're heading into recession, the Bank will eventually stop increasing rates and at some point they will probably reduce.
• Some variable rates will look lower than fixed rates today.
• But do work out how much any future rises would be – could you afford it if rates rose by another 2%, for example? Variable rates don’t typically tie you in – but they don’t protect you from increases in rates either.
• About 2 million households have base rate trackers. When rates rose to 3.5%, let’s imagine a tracker rose from 4% to 4.5%. This would cost an extra £50 per month on a £200,000 loan.

What to think about before getting or renewing a mortgage

The main things we need to pay attention to before we make a decision on this are:

• What do you think might happen to rates? This is a hard one by the way, which even the Bank of England’s Committee disagree on! But the general consensus is that they will rise a little further throughout 2023 before coming back down as recession bites, which is why some of us are feeling apprehensive about locking ourselves in with a fixed rate. If you fix today you get certainty, but you may lock yourself into a rate which feels very high in 12 months’ time. Remember you can always get a quote and an offer a few months before you take the offer up. So it doesn’t hurt to lock in an offer today if your mortgage is approaching expiry. Doesn’t mean you need to take it up.
• How long do you want to lock in a fixed rate for? This boils down to your preference on certainty today versus the hope of lower rates in future. If you're unsure but would still rather be on a fixed arrangement than deal with the uncertainty that comes with a variable rate, perhaps a shorter-term fixed rate mortgage would suit you better, such as a 2 or 3-year fix.
• Remember to find out about any early repayment charges (ERCs) if you're thinking about trading in an old mortgage early. These charges can be quite hefty and are typically between 1-5% of the value of what you have left to pay for your mortgage. Essentially, the closer you are to paying off your mortgage in its entirety, the lower your ERC will be.
• And make sure you agree terms and conditions which give you the flexibility you need, such as a potential house move, or indeed early repayment just in case! You don't want to find yourself boxed into a deal which is too difficult to manoeuvre out of if your circumstances change and you need to sell up.

David Hollingworth is Associate Director of Communications at L&C Mortgages - https://www.landc.co.uk.

There are seemingly endless choices when it comes to insurance. Aside from the more obvious things - such as holiday insurance or car insurance - it can be a bit trickier to know what to prioritise when it comes to our health and ability to provide. Our CEO Holly had a chat with financial adviser Tarnia Elsworth about what women between the ages of 40 and 60 should be thinking about when it comes to insurance. Here’s a quick summary to get you started:

• Life insurance – Protects your family if you die, for example, will cover mortgage payments, and pay out a single lump sum.
• Critical illness – Will pay a sum out in the event of a specified illness such as cancer; you can specify the amount you cover, which can be relatively small.
• Income protection – Will pay out a regular amount to replace lost income through accident, sickness and/or unemployment; particularly important to consider for the self-employed with no statutory sick pay.

As Tarnia explained above, the three main choices that are relevant to most of us are life insurance, critical illness insurance and income protection insurance. So let’s break them down further.

What is life insurance?

Life insurance is really something we do for other people. We can put it in place so that our families are provided for if we’re no longer around to provide for them. It can be used to pay off a mortgage, for example, or to cover dependents' needs. It was typically sold by banks alongside mortgages and so tends to be on our radar already, but it’s still worth checking if you’re covered for this, and for how much. Here’s 3 ways you can find out if you have an existing life insurance policy:

1. Bit of a no-brainer, but remember to thoroughly check where you usually keep your important documents! Most of us store these sorts of documents together so you may find life insurance documentation amongst those files. It’s also a good opportunity to sort through your paperwork and see if there’s any other important documentation that you’d forgotten about! 
2. If you still can’t find anything related to a life insurance policy, check your bank statements to see if you’re making any regular payments to an insurer. Sometimes life insurance premiums are paid annually, so remember to check the entirety of the last 12 months just in case.
3. And finally, contact your employer or dig out any employment contract – many companies offer this as a standard part of an employment contract.

The costs of life insurance vary dramatically depending on age, health history and things like whether you smoke or not.

Your main options will be around the term (how many years the policy lasts for) or whether you take out 'whole of life' insurance (this covers you forever). If you’re married, you may want joint cover – if anything happens, the policy pays out to your spouse. Or single life insurance, which goes to your estate, so make sure your will is up to date!

As a very rough guide – and it will differ for everyone – a 50 year old single woman, taking out Level Term life cover (the amount paid out stays the same) for 20 years for the sum of £250,000, would cost about £45 a month.

What is critical illness insurance?

Critical illness will pay out a lump sum in the event of something like a heart attack or cancer. It is quite specific and really relates to health issues, as the name suggests. Obviously, read any policy carefully to find out exactly what is covered. Financial adviser Rachel Efetha told us – with the benefit of hindsight after her treatment for breast cancer – she wishes that she’d had this in place beforehand. She also reminds us that we can take out cover for a relatively small, fixed amount. Even £10,000 could be an absolute blessing for those going through the trauma of chemotherapy, for example, with no way of paying the bills if they cannot work.

You can add critical illness cover to a life insurance policy. In the example above, for £250,000 life cover for a healthy 50 year old woman, adding £25,000 of critical illness cover would increase monthly payments to about £70 a month. This is a rough guide and it will differ for everyone. You can get an initial quote as food for thought from any comparison site.

You can read more about Rachel’s story here.

What is income protection insurance?

Income protection insurance will not pay out a single lump sum, but will pay out an amount to substitute loss of earnings if anything goes wrong. It can cover a broader range of issues than critical illness, such as mental health issues and depression. Financial adviser Tarnia Elsworth makes the point that this is particularly important for the self-employed who will not be eligible for any form of statutory sick pay if something goes wrong!

As a rough guide, monthly income protection insurance for a sum of £2,000 a month, for a healthy 50 year old woman earning £40,000 a year in a desk based job, to cover against accident, sickness or unemployment, would cost about £85 a month. If it’s just accident or sickness, this falls to about £35 a month.

Critical illness vs income protection insurance

How to pick the right insurance for you

To consider your options, the golden rule applies - shop around! Comparison sites are an OK starting point but make sure you get a few quotes to compare. Defaqto is a respected source of star ratings of insurance products, so look out for the providers with their 5-star ratings too. If you have specific needs or circumstances or concerns, do your research on which providers are most helpful for this, or if you have the funds then a professional financial adviser may be able to guide you towards the right cover for your needs. Lifesearch is also a credible life insurance broker if you want someone to help guide this decision.

An ISA sounds like another complicated financial piece of jargon, but it’s just an ‘Individual Savings Account’, which we use as a savings account for our cash, or for stocks and shares. And all the money we make in these remains tax free. Lovely! We asked financial adviser Jeannie Boyle to tell us more about these handy investment accounts. In this video, Jeannie explains:

• We can save from very small amounts up to £20,000 a year.
• This money will be held in tax-free accounts (that’s the ISA!).
• ‘Robo advisers’ are a good starting point for the less confident.
• Remind us that we can choose between ‘slow and steady’ or more volatile options.
• Suggest some good options and providers to consider.

Read on to learn more about cash versus Stocks & Shares ISAs, to understand which might be better for you, and to hear which providers we rate for both beginners and more confident investors.

What is a Cash ISA?

Cash ISAs are just savings accounts you never pay tax on. And the money in this account goes into cash, rather than the stock market. This will be a smoother ride and you’ll broadly know what to expect, but you will probably make less over a 5 year + period than you would with a Stocks and Shares ISA.

Everyone in the UK aged 16 or over gets an ISA allowance at the start of each tax year. In the 2022/23 tax year - which ends on 5 April 2023 - it's £20,000.

As with traditional savings accounts, there are a few choices for Cash ISAs. The most common are easy access (you can take your money out whenever you want), or fixed rate (where you set aside money for a fixed period of time, for a fixed interest rate). You can only pay into one Cash ISA in any one tax year.

The top-paying easy access Cash ISAs at the moment are paying about 2.5%. And the better fixed rate ISAs are paying about 3.5% for one year.

We all get a tax-free savings allowance – this is £1,000 of interest for basic rate taxpayers and £500 for higher rate tax payers. So if you find a much better rate in a bog standard cash account, the Cash ISA is of questionable value really. Because its job is to shield you from tax, but if you’re comfortably inside that tax-free allowance, you don’t need this shield.

You could argue that you can accumulate in a Cash ISA so locking your money into this tax-free world and growing it steadily every year is a sensible strategy, especially for those with lots of cash, exceeding that tax-free savings allowance. As a rule of thumb, those with smaller cash balances may be better off looking for the best rate in a standard cash account and bypassing the Cash ISA altogether.

More generally, a huge 2023 problem with Cash ISAs is back to that bogeyman – inflation! This is currently way higher than interest rates today. So your money is quite literally going backwards and being eaten by the inflation rat! One alternative is to consider a Stocks & Shares ISA.

What is a Stocks & Shares ISA?

Like a Cash ISA, you can pay in up to £20,000 a year into a Stocks & Shares ISA. But don’t panic – you can start from as little as £1, or more commonly, £100 a month. The key benefit is that you don’t have to pay any dividend, capital gains or income tax on any gains or income from investments held in your Stocks & Shares ISA. So basically any profits are tax-free.

These accounts are best for long-term savings – typically for at least 5 years or more – because shares are volatile and it’s no good if you need to sell up just when markets have tanked. But popular wisdom has it that shares will do better over the long-term – they’ll just jump around a bit on the way, so you have to be prepared for this.

You open an ISA – think of this like a metaphorical Tupperware container – and put stocks and shares inside it. Instead of cash. You can either open an account which lets you pick these shares, or if that makes your brain hurt or sends you into panic overload, you can look at a ‘robo adviser’ who will manage this all for you.

You can find out more in Visible!’s Investment 101 course about what to put into these accounts, and how to go about it. They really are the no-brainer way for most of us to start our investing journey, and to keep any returns tax-free!

Our top 4 Stocks & Shares ISA suggestions

We've reviewed over 30 leading providers, whittled these down to our favourites based on functionality and cost, and also tested our shortlist with women in our community to make sure you guys feel comfortable with the providers we rate.

We’ve split them into suggestions which beginners might like and some options for more confident investors. You can read more about each and see if any feel like a good fit for you by clicking on "Our Review".

ISAs for less confident investors

ISAs for more confident investors

Risk is the big four letter word when it comes to investing, and a fear of risk puts many of us off getting started in the first place. Investments can indeed go up and down, and returns are not guaranteed, but investment risk is more often than not just uncertainty, rather than the risk of outright losses - which we're faced with at the Grand National, for example. 

Firstly, we can minimise investment risk by not chasing crazy returns with the latest ‘hot’ thing promoted by someone enthusiastic with good teeth on TikTok! Bitcoin, film schemes, weird stuff – that is all risky. 

Mainstream investing is simply about using some of your money to back the world’s biggest companies. Now these guys might have bad years – think British Airways in Covid-stricken 2020 for example – but it doesn’t mean they will all go belly-up at the same time. If we think back to recent awful years or periods (2008 or 2020 when Covid hit), we saw main global markets fall by a hair-raising 25% - 30%. But they bounced back in following months/the next year.

The main thing we need to know in order to work out how much risk we can prudently take (and yes – investment risk can actually be very sensible!) is our timeframe. If it’s a year, then investing is risky and it’s a No No. If it's 10 years, then those dips and falls don’t matter – so the potential upside outweighs the hernias of short-term volatility.

6 things to know about investing risk

By way of summary, here are 5 things to consider:

1. Risk is often used to mean volatility – how likely is something to spike up and down dramatically?
2. Do remember there is upside in this volatility as well as downside – it's not all bad.
3. If you’re saving for longer-term things – maybe a pension when you’re in your 40s, or a Junior ISA for your baby – then you have time to ride out any volatility, so don't be afraid of things labelled ‘high risk’. This doesn't turn you into an Investment Evil Knievel or some high roller!
4. The flip-side of the risk coin is that we get greedy so be a bit suspicious of ‘get rich quick’ ideas or things like crypto. We cannot remove the risk of a volatile stock market and global economy, but we can remove the risk of things which ‘don’t smell right’.
5. ‘Cautious’ is often used to describe less volatile or ‘low risk’ investment portfolios, most suited to shorter periods such as 3-5 years. ‘Balanced’ is in the middle. And ‘Adventurous’ is at the more volatile end, best suited to those investing for 7 years + who can stomach ups and downs.
6. Key questions are: Am I in this for at least 5 years? Do I have a cash buffer? And actually – am I taking ENOUGH risk?
   

A key takeaway is that investing is not the same as gambling or going backwards down a black ski run. It’s uncertain, yes. And volatile, yes. But it can also be a very smart and prudent thing to do with your long-term savings.

Here’s a final idea: It’s not all or nothing. Why not start with something small like £50? Invest that. If you can afford it then just do it, as Nike would say. And just roll with it for a few months, get the updates, learn on the job, and see how it goes.

If you make it a huge decision, which becomes too big to actually ever press go on, you may well still be procrastinating in 10 years’ time!

The science of risk and our brains

This video with behavioural psychologist Paul Davies is well worth a listen. With his skull called Horatio, tales of plumbers talking about nipples and insights into how our brains try to sabotage what could be the best course of action for us, it will really set you up to think like an investor. Highly recommended listening!

Junior ISAs (also called ‘JISAs’) can be a great way to save for the kids in a tax-free account, and also to start to teach them about money! We asked financial adviser Carole Haswell to tell us more about what JISAs are and why they’re a great way to build good money habits with your kids.

What is a Junior ISA?

Junior ISAs are available to all children under 18. If your children are of the hairier, taller, driving variety (i.e. older!) then their needs will be different, and you can either suggest a normal ISA to them, or a Lifetime ISA if they’re saving up for when they leave the nest.

For younger kids, Junior ISAs are just as flexible as a normal ISA. You can invest in a range of underlying investments, including cash, the stock market, and government bonds. The temptation – because it’s for your children and we spend our lives trying to keep them away from risk – is to play it safe and to keep it all in cash.

However, if your kids are 13 or under - which by definition means that you are saving for at least 5 more years - you can afford to take a little more risk, because you have time to ride out the highs and lows of markets.

Risk doesn’t mean behaving like a gambling idiot: It’s how the industry describes having your money in volatile assets. Shares will of course be a much bumpier ride than cash, but over any 10-year period since stock markets began, they have done better than cash 9 times out of 10. Over 18 years, it’s 9.9 times out of 10!

Cash vs stocks & shares JISAs

CEO Holly’s children’s JISAs are in fairly spicy Stocks & Shares JISAs with exposure to things like emerging market shares – pretty hardcore stuff, but the children are still young so there’s a pretty long timeframe to play with. The thinking here is that it doesn’t matter if one year markets have a shocker, because they will recover at some point and then surge forward.

A very crude analogy could be that cash is like being in a car with someone driving at 20 miles an hour. Being in shares is like being with someone who goes from sitting still in traffic to driving along at 70 miles an hour. Sometimes you’ll be stationary or in reverse, but if the journey’s long enough, you’ll get there quicker.

So, ask yourself if your nervousness about markets is preventing your money from working as hard as it should be. A significant majority of the UK’s Junior ISAs are in cash. We think this is illogical and shows that fear of investing is leading to the equivalent of people not leaving the house in case they get run over. Stock market risk is real and important to understand, but we need to look at this in context of the timeframes involved.

What happens when my child turns 18?

JISAs can be a great way to give the wee ones a dollop of cash for a house deposit, a car, or to fund their education. However, you need to be aware that you can’t control what they do with it forever. All the money you put in is locked away until your child’s 18th birthday. At that point, it becomes their money and they’re free to do whatever they like with it.

If you’ve got a responsible child, you might be lucky and they’ll use it for their university fees. If you haven’t, maybe don’t tell them it’s there (did we just say that?). On their 18th birthday, the Junior ISA will roll over into a normal adult ISA.

Hargreaves Lansdown is the biggest provider of Stocks & Shares JISAs in the UK. Their data suggests our kids are pretty sensible – over 95% of their JISAs transfer to adult ISAs and see no withdrawals in the first 12 months. And almost a third pay in more! When did kids get so sensible?

An alternative is of course just to use your own ISA allowance to save for the kids and then you keep control of the money the whole time. It’s less compartmentalised though, and you lose the effect of showing them the account and getting them involved.

Get your kids involved with investing

One way to get your children learning is to set up a Junior ISA and give them the choice of what shares to buy. Got a mad keen gamer? Maybe Microsoft (as in Xbox). Tech head? Maybe Apple. A sports fan? Sony – they make PlayStation. A sugar fan? PepsiCo.

To be very clear, we are saying this as parents, not as investors. And these are not financial recommendations! Usually buying individual stocks is a riskier approach and not great with smaller amounts of money, as we lose about £10 in trading costs every time we buy. However, if the aim is to inform, engage and make it real, then opening a Junior ISA and asking for a share in an interesting company for Christmas isn’t a bad idea.

And then the main bulk of the money can go into something a lot simpler – multi-asset funds for example can be great in Junior ISAs!

Our top 3 Junior ISA picks

Our research team have test accounts with over 30 leading investment providers. We review the options based on functionality, cost and service. We create a shortlist of our favourite Junior ISA providers, and then test these with our community to make sure that you like them too, and that they make sense to you.

Have a look at our community’s favourite Junior ISA picks for options which we rate and our community thinks are clear and easy to use.

Pensions are the biggest brain-fry for so many of us. Years of complicated reports with lots of jargon and acronyms make people feel even less informed than when they opened the letter! But the basics don’t have to be that complicated.

What is a pension?

A pension is essentially a savings account with very specific terms and conditions to encourage us to save up for our retirement. The main rules are around access – we can’t get our hands on the money until we are at least 55. So if flexibility and access is your thing, go for an ISA instead.

BUT. And here’s the drumroll moment. Pensions are fabulous (really!) because they get you free top-ups from the Government. Basic rate taxpayers get 20p from the Government for every 80p you put in. And additional rate taxpayers can effectively get more – by reducing their tax bill when they complete their annual tax returns. Reducing this bill by another 20p for every 80p you paid in. Additional rate taxpayers get even more back.

So the main trade-off is lack of flexibility and locking money away VERSUS free money from the Government. The closer you get to 55, the more compelling the idea of using pensions as a saving vehicle becomes.

Things to check with a Workplace Pension

We asked financial adviser Chloe Phillips to tell us what three things she thinks women between the age of 40-60 need to think about when it comes to pensions.

1. Look at your workplace pension – do you understand the contributions you’re making?

• Does your employer match your contributions?
• Do you pay in using salary sacrifice? This saves your employer some National Insurance contributions so can be a win-win.
• If you're a higher rate taxpayer, you may need to complete a self assessment every year and claim back an additional 20% on contributions. If you don’t do this – you will lose this extra money.

2. Still in your workplace pension - do you understand your investment strategy?

If you’re in the default fund, this may not be the best option for you.

Check what your pension is invested in. If you're not planning to cash everything in and buy an annuity in your 60s for example, but you will stay invested in markets for longer, then you don’t want to be put into ‘safer’ cash and bonds too soon.

If this sounds complex, then read up more on drawdown (staying invested and drip-feeding an income from this regularly) versus annuities (cashing in for a fixed annual payment) as your retirement options.

3. Look at the underlying charges for your pension.

These will usually be the sum of the pension provider charges (for administration – usually a % fee on your total pension amount each year) and the investment charges (for all the investments sitting inside your pension).

State Pension

We should all check our State Pension entitlement. The amount we get depends on our National Insurance contributions (how many years we've worked for). The full new State Pension is currently £185.15 each week, but we won’t all qualify for that. You can check your state pension forecast here.

If you want to learn more about pensions, hop over to our Retirement Rocks course for some more detail on how to maximise your pension.

Final Thoughts

Here are some final thoughts to consider about when you may need guidance or advice on planning your pension.

Many people have lots of dribs and drabs from previous jobs and if this is you, then consolidation is worth considering. However, word of warning, if you have a defined benefit or a final salary scheme, these tend to be very good deals so the basic rule is not to mess with them in case you lose some valuable benefits! But it starts to get complicated and so this is one area where getting some financial advice can be a very sensible idea.

For more detailed information about pensions, you can take our Retirement Rocks course, or provider Fidelity has a useful content hub all about retirement income and pensions here.

Alternatively, if you’re over 55, you can book a free call with the Government-backed service PensionWise. They can’t give you financial advice, but they will talk you through your options and make some sensible suggestions. Well worth investigating.