How financially fit are you? Boring Money regular Cherry takes our 6 Point Financial Fitness Plan.
16/07/2018
We can’t claim this is as good as your very own financial adviser, but it will walk you through some basic financial planning and set you on the right path. If you have an adviser, it will help you use their time more productively on important stuff; if you don’t, it will get your finances to a point where you can, mostly, put your feet up knowing that the basics are done.
At Boring Money, we like to ‘eat our own lunch’, so I gave it a try. It asks six straightforward questions on the basics of financial planning.
The first is on debt. Here, I felt quite saintly. I have debt, of course, but it’s generally not expensive and I’ve usually got a plan as to how I’m going to pay it off. Women my age usually have over £2,000 on their credit cards, apparently. Paying that off should always be the number one priority – the quiz results page will give some advice on this.
Do I have three months expenses in cash? Hmmm, here I’m not so saintly. 22% of women in their 40s have over £5,000 in cash savings. I’m not one of them. I either spend what I earn or it goes into a stocks and shares ISA. I realise the limitations of this, particularly if I were to lose my job. Point noted. 3 months in cash can feel insurmountable – so I’m going to aim for one, to start with.
On wills and life insurance, I can reclaim my halo. I’ve done both; they’re checked regularly. No flies on me. I was a little surprised that only around a third of women have life insurance, and about the same have a will. Both are really, really easy to set up – the results page gives clear instructions if you haven’t already done this.
Workplace pension provision has improved exponentially with the advent of auto-enrolment. 51% of British women in their 40s now have a workplace pension and provision is expanding all the time. It’s difficult to see this as anything other than very good news. For a small contribution, you basically get free money from your employer and the State. Sadly, I am self-employed so don’t have a workplace pension, but I do have a personal pension, and the results give me some options for this.
I’m shocked to learn that just 12% of British women in their 40s have a Stocks and Shares ISA. I love my ISA, but that may be because it’s been a great time to be a stock market investor. That’s partly why I have nothing in cash. I’m always thinking my money could be working harder so it ends up in my ISA. This prejudice, I realise, may need to be examined. I’ve now got a few ideas about how I could rearrange where my money sits and which ISA provider I could look at next.
What did I learn? Unlike most people who tend to be too cautious, I’m a bit too gung-ho with my finances, and need to work on building up a cash pot. It’s all very well drifting along thinking nothing will happen, but the workplace is a fickle environment. I like the step by step nature of the results, it’s all easy to follow and I like that I can do it in my own time.
Read next: What to do with short term cash: do we all just suck up low rates?
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Trying to get a bit more pro-active with my pension. If my money had been in an online managed fund like Nutmeg for example, is it reasonable to assume that as the markets fell last year the funds would have been managed in real(ish) time to limit the damage? If so, is it therefore a no-brainer to transfer my pension to an online managed pension or is it not quite as simple as that?
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I've been reading recently about how investment trusts are much the same as funds, but are cheaper to own. A: Is this true? and B: Do you have an article on Investment trusts on your site?
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Hello, I really enjoy your website and find it useful and concise. My question is, what is meant by long term savings? I am 54, so what should I consider to be an appropriate time frame for any investment I make, that could supply the best results?
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I have an old pension and they have written to me saying that they are going to enhance my pension if I transfer it out. The company is also offering free independent advice. I have £117,000 in the pension at the moment, which would give me £6400 a year at 65. I am 61 in April and would like to finish work at that point. I am not sure how much extra they will give me. Have you any ideas or suggestions to help me decide? Thanks.
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I’ve been investing in Nutmeg’s Risk 10 profile for three years which helped my deposit for my house. I am now wondering whether to use Nutmeg again, or should I use LifeStrategy for my £1000 per month? Is there a difference between Vanguard's LifeStrategy option and let’s say a well known robo adviser like Nutmeg? I am still a beginner and would like to keep things simple, but happy to take risk and prepared to leave my investments for a long time.
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I was lucky enough to inherit a significant sum from my father... currently in Alliance trust platform in 10 investment trusts. They have delivered well in the last 20 years. But they are UK equity based. And highly risky. Do you offer a sanity check service for confused individuals like myself? I don’t know what to do...
Paul | Berkshire | 12/11/2018 | 2
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I am 25 and starting to seriously financially plan out my future. I would really welcome a 'sense check' on my thinking as well as some help on which investment choices to make. My goals are: To invest for 15 years - my risk appetite is very high (i.e. I could afford to lose all my money). Goal 1 - More Important: To have an investment pot of £1,500,000. Goal 2 - Less Important: To be mortgage free. My plan is: 1) Open an annual Stocks and Shares ISA each of the next 15 years. 2) Open Share trading/dealing account. 3) Reduce my mortgage term to 6 years by 2025. I appreciate the above is a lot to go though, but I'd welcome any help and guidance.
Mo | London | 15/10/2018 | 3
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My wife and I have recently separated. The equity in the house is going to be split 50/50. We don't have any other meaningful assets. We have agreed to co-parent the children equally. My wife is requesting that I pay child maintenance, child care and school expenses. A CMS document states that shared child care results in no child maintenance payments. However, I do agree with the child care and school expenses payments. Our daughter has Autism Spectrum Disorder, so my wife gets a Disability Living Allowance for her and also works full time. If I don't pay the child maintenance, child care and school expenses, my wife is threatening to claim spousal maintenance, and take half my pension. Should I pay the £350/month or take my chances in court?
D | Lincolnshire | 03/09/2018 | 0
- Pension
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Can you advise me on the best approach when looking to invest in a product that offers compound interest? I’m thinking about funds rather than bank accounts. I also have 4 different pensions on the go. Should I keep them separate to diversify the risk? Or consolidate them? How will these pensions be treated when I retire? Will they be considered in aggregate by the tax man?
Craig | Clackmannanshire | 16/08/2018 | 1
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I have about two thirds of my ISA in funds with Charles Stanley Direct and about one third left with St James's Place. I was planning to transfer the remaining one third to Charles Stanley Direct. However the recent platform price increases seem to put me in the worst position possible. I also have a private St James's Place pension. Would I be correct in thinking the fees are also high on this, and I could do better elsewhere? Can I transfer into an SIPP for example?
Gerry | Bedfordshire | 15/08/2018 | 4
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I invested my money in a St James's Place managed fund, split into ISAs and bonds, after advice from an adviser who was a St James's Place partner. My investments have done reasonably well, but I've read disturbing reports about St James's Place. Should I have concerns? Should I have found an independent financial adviser?
Glyn | Essex | 09/08/2018 | 6
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I wanted an investment trust with an income, so I put £10,000 into The Investment Company. It delivers a reliable quarterly dividend but the capital value has dropped by 10% since I invested 2 years ago. What are your favourite investment trusts?
Fran | Greater London | 08/08/2018 | 4
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Is there an average number of funds that one should ideally hold? I have in excess of 20. I am happy with my portfolio and coverage, but wonder if I have too many funds. The second part to the question is how long should you leave an underperforming fund?
Richard | Hertfordshire | 06/08/2018 | 3
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I am 73 and cautious. There are two areas that your advice would be helpful..what if you just spend thousands on buying the gold standard footsie companies like shell and the rest and keep them for five years and then cash them in ?
DB | UK | 24/07/2018 | 6
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My wife needs to set up a SIPP with a good value, low cost, low maintenance underlying investment portfolio. We want a good mobile app from a well respected provider. Where can we see the options and directly compare historic returns so we can make a decision?
Guy | HRT | 17/07/2018 | 1
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I hope you can help. I recently consolidated two modest pensions into a SIPP in readiness to start UPFLS drawdown in May (2018). Whilst I was hoping for growth in my investments I wasn’t expecting it to rocket and now find I could well be looking at exceeding the lifetime allowance, possibly even before my first annual drawdown in May, and I’m unsure what, if anything, I should do.
John | LDN | 03/07/2018 | 1
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I was considering applying for Individual protection 2016, which I understand would give me an LTA of £1,021,390. However, following the Inflation rise of LTA, it seems the LTA is now at £1,030,000. It now seems pointless applying for Individual protection 2016. Have I got this right?
David | LDN | 12/06/2018 | 0
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What are the differences between income and accumulation income funds? How do you declare income reinvested in a fund on your tax return?
C | 05/06/2018 | 0
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Hi, If I take a lump sum from my pension at age 55, what is the rate of tax after the first 25%?
Judy | 17/05/2018 | 1
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How long does it take to release money from your pension at 55 years old?
Diane | WYK | 01/05/2018 | 1
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Do you have information on taking your pension pot before retirement? My husband is 62, on a final salary scheme & is trying to get clear information on it.
Jo | 17/04/2018 | 3
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Can you recommend some very basic books for a 69-year-old widow who is now having to manage her money? Thanks
Martha | 12/04/2018 | 0
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Hi, I've got an old D.B. pension, approximate value £12k. I would like to invest & top up each month. Who would you recommend? Also I would like to make an investment, & don't know where to start? Thanks
Eve | 04/04/2018 | 5
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I am post-divorce with a good settlement which I have only partially invested. Are there any courses you can recommend? I have sat in a number of meetings with accountants and financial advisers feeling somewhat patronised! I am sure that there are plenty of women in a similar position to me (aged 55!).
Ellie | 14/03/2018 | 3
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How can I find a good financial adviser?
Byron | Greater London | 01/03/2018 | 0
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My question is about my wife's pension valuation in a divorce situation. She is on a final salary scheme working for a national charity organisation. I feel the CETV value is too low and certainly does not take into account the inbuilt benefits such as guranteed final salary, life insurance.
Jay | 12/02/2018 | 0
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I am a 59 yr old retired lady with no income but I have reasonable equity..is it worth starting a pension or is it too late?
| 06/02/2018 | 2
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Hi, If I take a lump sum from my pension at age 55, what is the rate of tax after the first 25% ??
Gareth | HAM | 26/01/2018 | 0
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Can losses in a pension SIPP be offset against anything?
Henryk | HAM | 17/01/2018 | 0
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We have four grandchildren (2 English living in UK, and 2 Irish living in Eire). We have decided to start savings plans for their futures. Their ages are 18yrs, 11yrs, 8yrs and 4yrs respectively. My age is 75yrs, and my wife is a little older. What should we do, please?
John | BKM | 01/01/2018 | 1
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Given the recent poor performance in Woodford Equity Income, do you think I should sell it or wait for the fund to recover?
Jenna | Cornwall | 17/12/2017 | 3
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I am a 59 yr old retired lady with no income but I have reasonable equity..is it worth starting a pension or is it too late?
LL | NFK | 10/11/2017 | 2
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If I were retired and drawing my pension, can I earn an income from doing some sports coaching too? If so, how much can I earn without it affecting my pension? Thanks
Charlotte | DEV | 07/11/2017 | 0
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I am getting long in the tooth at 79, a little forgetful and I am going through a painful divorce. This has shattered my confidence and I need help.
Richard | Kent | 05/11/2017 | 3
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I have just sold my house and have a significant sum of money I want to invest. I may want to draw some income but also want to achieve capital growth. Are there funds that aim to achieve both or should I just invest for growth and draw money as I need to for income?
Jon | SRY | 13/09/2017 | 1
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Please help me. Choosing a pension from Aviva. It asks if I want growth or income? Which one do I choose ? I'm 46 .
Ria | Greater London | 11/09/2017 | 8
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I am interested in the Fund piece that Holly refers to in today's Money Supplement in the ST’s with 'Lindsell Train Global Equity'. I am looking for a fund for myself (54 yrs old) but also my son (19 yrs old). Is this fund suitable for either of us with an investment strategy of 10 years +.
Richard | 22/01/2017 | 0
- Funds
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I am confused about index funds, e.g. Vanguard Equity fund. Do they track an index or include the yield? In the case of Vanguard, their low cost is attractive but their portfolio is made up of other Vanguard funds. I assume these probably each carry a fee structure - is this correct?
Robin | Gloucestershire | 03/09/2018 | 0
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Is it worth using a financial adviser when it comes to switching pensions funds, or should I do the research and pick the funds myself? I am no expert in stocks and shares.
Helen | Dorset | 10/08/2018 | 4
- Private Pension
- Shares
- Funds
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I am looking for a fund for myself (54 yrs old) but also my son (19 yrs old). Is this fund suitable for either of us with an investment strategy of 10 years +.
| 29/05/2018 | 3
- Robo Adviser
- Funds
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I use H&L and although they are a bit 'plumy' on the phone I quite like their website and the costs are OK. So I was thinking of H&L for [my son]. I would be telling him to open these two funds and regularly invest and forget about them for 10 years!
R | Greater London | 29/05/2018 | 1
- Lifetime ISA
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Given the recent poor performance in Woodford Equity Income, do you think I should sell it or wait for the fund to recover?
| 29/05/2018 | 0
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I have a bit of excess money to play around with and I have been looking at Investment funds. What is the typical % growth rate of an investment fund?
David | Greater London | 07/09/2017 | 7
- Online Investment Platforms
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Why should I bother with paying into a pension at my age of 55 years now when I have never had one?
Tee | Greater London | 07/09/2017 | 4
- Private Pension
- Pension
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Can I sort a pension out myself online?
Sharon | Greater London | 07/09/2017 | 0
- Pension
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What might a savings pot of £100,000 get me as a retirement income?
Aboodi | Greater London | 06/09/2017 | 1
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Pensions vs ISA - which one is best?
Roderick | Greater London | 06/09/2017 | 0
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What funds could my millennial children invest in?
Anthony | Greater London | 06/09/2017 | 1
- Funds
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What are the changes with pension annuities? My mother in law has asked as her retirement is looming. I've read in the press it's changing but it all feels confusing. I just need some simple clear advice. Thanks
Keith | Greater London | 06/09/2017 | 2
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