Mums Finance

Some of the hardest hit people during the recession – or credit crunch if you like – were those involved in Mutual Funds. Stocks and Shares were the hardest hit sector of the industry and this saw billions lost in the wake of the economic crash. It is time to redirect your investments – what you have you need to protect – and it is still possible to invest like the big boys and see your investments thrive even in the current climate. Companies such as MarketRiders can steer you away from the exhorbitant fees and charges that independent ‘experts’ and ‘advisors’ take to do basically gamble your money. They will help to protect your money from the devastating fees and taxes that eat away at your capitol by implementing asset allocation as the strategy for your investment portfolio.

One of the problems with packaged investments and particularly tax privileged investments such as IRA investments is that the investment element tends to get neglected or at least it’s overshadowed by the magic words “tax deductible”. Yes, it’s clearly to your advantage to get those tax deductions but don’t forget that it’s an investment that you’re making and any tax deduction can be far outweighed by charges or duff performance.

Popularity: 22% [?]

Millions of people approaching retirement are being hit by a crippling combination of large mortgages and no savings.  Those aged between 55 and 64, known as ‘pre-retirees’, have been unrealistic about their pensions and are living in a state of denial about their finances. Many people never look at their pension statements, simply filing them away every year, hoping they will have enough to pay for a good retirement – which most of them will not. Pension experts warn against the widely held approach of using your house as your pension because few people actually want to move out when they get to retirement age.

And what about those people today who have never worked a day, having spent their most productive years on benefits – who will pay for their retirement and will there be any Govt pensions to go around at all in the future? my guess is they are in very big trouble.

Parents these days are remortgaging their homes to give money to their children to help them on to the property ladder. Others use their house as a ‘cash machine’, taking out money to put into a business, fund a better lifestyle or pay off debt and one can only blame those ‘cash equity’ tv commercials for the increase in such activity. I feel they are very bad decisions to make at such a time in your life. In the past, a typical pre-retiree would have had no mortgage, more savings and would have retired by the age of 65. Separate research yesterday highlighted the nightmare facing pensioners who have been saving all their lives – with little to show for it.

People approaching pension/retirement age need to seriously look at their finances and the lifestyle they will be able to afford; this might mean telling ‘the kids’ to find their own desposit for the house they want to buy – your retirement is at stake, let them work out their own problems.

Popularity: 25% [?]

Thousands of desperate savers are having their cash returned by Government-run National Savings every day following a record rush for one of its top deals. Savers whose incomes have been stripped bare by the fall in the base rate swamped National Savings with requests for a leading one year bond paying 3.95 per cent, and a two-year deal at 4.25 per cent. But after just 24 days the rates were pulled – the shortest time one of its savings products has ever been on sale.

Now thousands who hoped to have their meagre monthly incomes boosted by the deal, are having their cheques returned. At the last count more than 1,000 a day were being posted back. Many more applications are still to be received from savers who never realised the rates had been withdrawn. They will now be forced to seek out one of the lesser deals from elsewhere on the high street – the Post Office is doing a one year growth bond at 3.70% fixed for one year and a 4.25% rate for the two year deal.

This will be a further blow to those whose incomes have been devastated by the fall in the Bank of England base rate to a record low of 0.5 per cent. In some cases investors are getting just £8 interest a year for £10,000 of savings. If you do not need to depend on an income from your savings for the time being it would also do to look at investing in gold, shares or otherwise.

Popularity: 22% [?]