How Hard Does Your Money Really Work

How Hard Does Your Money Really Work?

In times when inflation is on the rise and the economy is on the downturn, it becomes more important than ever to make sure our money is working as hard as possible for us. This applies regardless of the situation you are in. For example, you may have your own business that you rely on for all your income; in this case it is particularly important to manage your finances in the most efficient way so that you can develop your business still further into the future.

The problem a lot of people have is that they tend to stick to the same habits for long periods of time without actually taking the time to consider whether they are still the best ones for them now. For example your savings account may have been at the cutting edge of all the ones available when you opened it six years ago, but how competitive is it now?

That’s why it’s a good idea every now and then to review all the places you have invested your money, in order to see whether you could actually benefit from overhauling your finances completely.

It’s also often the case that people set up the accounts they need when they start their own business, and then forget to review those arrangements as the business begins to grow. The income you receive from your efforts in building the business in those early days can be very different from what you begin to earn later on, once your business is more established.

You may even find you are elevated into an income bracket which renders your previous way of thinking about money obsolete. If your income is channeled into the right places then you can enjoy even more benefits from it than you would otherwise, so it’s important to keep on top of what is going on.

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In the end it all comes down to good habits and one of the best money habits you can have is to constantly review your situation to ensure you are still in control of your money, rather than it being in control of you.

Another good habit to have is to make the effort to stay in touch with what is on offer in the financial marketplace in terms of various current and savings accounts at any one time. This will help you to see whether you have the right products to suit.

You can also consider switching to premier private banking, which, for a modest monthly fee often comes with lots of added benefits as well as giving you a better interest rate.

As such, it’s worth keeping tabs on your money because you will get far better rewards in return – and those rewards can help enormously in both the short and the long term.

Equity release: a good way to securely face the future

For many, the prospect of retirement can be daunting. And, with prices for essentials like food and electricity rising, alongside higher interest rates and often small pensions, many have to consider alternative options for living after retirement. This can mean downsizing, or, if practical, finding another job.

However, the financial experts believe this doesn’t have to be the case. It is thought many are not aware of the current value of their properties, and, due to increasing house prices over the past few decades, there are a lot of people who own homes worth significantly more than when they were purchased. This is where the concept of equity release can play an important role in easing the stresses of facing a future with limited income.

Equity release – a way of releasing funds which are tied up in a property – has become a popular method to boost ones’ retirement income and is generally available to those aged 55-70, dependent upon circumstances. In the current marketplace there are four schemes available: lifetime mortgages; drawdown plans; home reversion plans; and home income plans.

With a lifetime mortgage, it is possible to obtain a tax-free cash lump sum or a regular monetary income. The loan is secured against the property and interest is accrued throughout one’s lifetime. The loan is paid back once the borrower has died or gone into long-term care and the property is sold.

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Alternatively, with a home reversion plan, the borrower sells all or part of their home to a reversion plan company. In exchange, the borrower receives a tax-free cash lump sum with no monthly repayments and is able to stay in their home for as long as necessary. Additionally, the borrower is able to guarantee an inheritance to any beneficiaries, which is not possible under the lifetime mortgage scheme.

With a home income plan, equity is released through either a lifetime mortgage, or a home reversion plan. However, instead of receiving cash immediately, it is invested into an annuity, which is designed to generate income for life.

There are a lot of advantages in taking out an equity release scheme. However, when thinking about any form of equity release, it is advisable to seek the advice of independent financial experts, and to consider schemes regulated by the Financial Services Authority and SHIP – the self-regulatory trade body for the equity release market.