10 financial planning tips to get your finances in shape in January 2012

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To help consumers get their investments and savings back on track and financially prepare for the future, unbiased.co.uk’s financial advisers have come up with their top financial tips for 2012

Unbiased.co.uk - Independent Financial Advice

The biggest priority is to reduce any debt that you have

2011 has seen a fair amount of economic drama and while many of us are trying not to give in to those last minute splurges it’s almost inevitable that we will financially overindulge this festive season.

To help consumers get their investments and savings back on track and financially prepare for the future, unbiased.co.uk’s financial advisers have come up with their top financial tips for 2012.

1.    Annuities
As we enter 2012, pension annuity rates are at all-time low levels with little prospect of a speedy recovery. Individuals about to draw income from their pensions must consider all of the options available to them. - Gordon Bowden (Quainton Hills Financial Planning Ltd)

2.    Do not ‘rate tart’ with credit cards
There are many well intentioned people who save money into an interest bearing bank account and at the same time build up a credit card debt. They do this with the intention of moving from 0% deal to 0% deal, paying the 2.5% set up fee and trying to get better returns than from investing the cash. Steer well clear: the marginal benefit is heavily outweighed by the likely cost. - Dave Penny (Invest Southwest)

3.     It's time for a financial clear-out
Check those direct debits that are going out each month. You could find easy money from combing through your bank statements that could be used to pay down debt or save for the future. - Mel Kenny (Chartered Financial Planner, Radcliffe & Newlands)

4.    Risk tolerance for 2012
We are asking clients to think about their risk tolerance for 2012 as we think it likely it will be challenging 12 months coming up. We are asking what they’re prepared to lose as opposed to what they’re prepared to make in returns. - Mike Horseman (Cockburn Lucas Independent Financial Consulting)

5.    Shelter existing investments in ISA
A Bed & ISA transaction allows you to sell your shares or funds and use the proceeds to open (or top up) an ISA. You can shelter up to £10,680 of investments in ISA before midnight 5th April 2012, or £21,360 for a couple. - Danny Cox (Hargreaves Lansdown)

6.     Investment Portfolio Diversification
I’m seeing a lot of client portfolios at the moment that just aren’t diversified enough. So my tip for the New Year would be to make sure your investments are well spread. - Jaskarn Pawar (Investor Profile)

7.    Reducing debt
The biggest priority is to reduce any debt that you have. You are now probably paying less per month for your mortgage than you did (say) five years ago. Take this as the opportunity to pay more and reduce the debt. (Yes a mortgage is a debt). - Harry Katz (Norwest Consultants)

8.     Life expectancy and protection
Think about your life expectancy – how many people do you know have parents/relatives in their 70’s, 80’s or 90’s being cared for/supported by a younger generation. How much money do you need to fund your retirement and who will care for you? - Jonathan Hill (Milford & Dormor Solicitors)

9.    Protection of assets
If you have assets worth over £325,000 you may have a liability to Inheritance Tax (IHT) after your death. This liability can be planned for and minimised if the correct advice is taken. - Sharon Pallagi (Clarion Solicitors)

10.    TAKE ACTION
My tip is simply to take action! The more aspects of your finances that you can put on “autopilot”, the more time there is for you to focus on the areas where timely analysis and decision making are more likely to pay off. - Jason Witcombe (Evolve Financial Planning)

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