Taking Account
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Give your financial planning a makeover

Money Wise Spring 2007

When did your personal finances last have a review?

You probably give your car a service once a year and maybe your central heating system too. Both are wise precautions, because you don’t want either of them to let you down. It ought to be the same with your personal finances.

Annual reviews may seem unnecessarily frequent, but just think of some of the things that have happened since the start of 2006:

  • A new tax regime for pensions has come into being which affects virtually everyone saving for their retirement.
  • The government has announced new plans for individual savings accounts (ISAs) and PEPs.
  • Real estate investment trusts (REITs) have finally been launched, offering a new route into commercial property investment.
  • The tax laws on trusts have been revised, with relatively short deadlines set for valuable transitional reliefs.
  • The government announced plans that remove any estate planning benefits from alternatively secured pensions (ASPs).
  • The government has announced wide-ranging proposals for reform of state pensions and the introduction of a quasi- compulsory private scheme for employees.
  • Inflation has risen to its highest level since 1998.

All of these events could have affected your financial planning, and that is before you start to consider any changes on the personal front. For example, have you increased your mortgage, added to your family or moved to a new employer since January 2006?

An annual financial review gives you and your financial adviser a chance to step back and consider the impact of the last 12 months, both in terms of the past and the future. One of the areas where an adjustment is often needed is family protection. Unless this is increased regularly, life and health cover tends to get left behind by increases in earnings.

In some cases the outcome of a review may be that nothing needs altering, but that does not invalidate the review. Without the formal process, you will not have the comfort of knowing that your finances are on the right track.

A review need not take long, as it will concentrate on the changes, not the status quo. The early part of the year is an ideal time to start the process, as it can be combined with your year end tax planning. Why not call us today, and make sure your finances are set fair for 2007?

Hilton Sharp & Clarke