One thing we know is 2018 will bring is a further squeeze on disposable incomes.
So what can you do to maintain your disposable income? There are two broad options, increase your income and/or decrease your non-discretionary expenditure.
Trying to earn a higher return on your savings is almost certainly going to mean taking some level of investment risk, which means the value of your capital can fall as well as rise. However, with the guaranteed real loss your cash savings are making at the moment where is the real risk? I’m not suggesting you should go and put all your money in the stock market but your longer term savings is far more likely to beat inflation in a broad portfolio of asset backed investments than it is languishing in a savings account.
On the decreasing expenditure side of the equation, one area I am increasingly helping clients save money is on their life insurance. People are often surprised at how much they can save on older policies. They understand that life insurance gets more expensive as you get older, so believe if they took out a policy ten years ago, surely it will be more expensive now. What they forget to take into account is the fact that the insurer now has ten years less to insure them for.
For people protecting a mortgage, premiums can be reduced even further if you have Decreasing Term Assurance, also known as DTA or Mortgage Protection. With this type of cover the amount of life insurance goes down in line with the mortgage but the premium remains level. So if you started a £100,000 Decreasing Term Assurance ten years ago with a 20 year term your level of cover will now be around £73,000 but you are still paying the same premium as you were when the cover was £100,000. So a new policy for £73,000 with a ten year term can be much, much cheaper.
Whilst you may struggle to make your boss pay you more or increase your business’s sales, there is plenty you can do to maximise your income from the assets you do have and reduce your expenditure on the necessary evils.
Contact Nsure Financial Services on 01903 821010 or email email@example.com for more information or to book an appointment with one of our financial advisors.