Don’t let the wind of change blow your finances off course

As with any year, 2019 is bound to bring some unexpected surprises. But, looking ahead, there are some money moments you may be able to prepare for – even if some are more certain than others.

“Uncertainty and change are a part of life, and we’ll be better placed to ride these waves if we’re prepared for whatever may come next,” says Alistair Mcqueen, head of savings and retirement at Aviva.

“We will all benefit from a couple of hours to prepare our finances for whatever 2019 may bring.”

So what can you do to help get prepared? Here, Alistair highlights some of the key money moments to get ready for over the next 12 months...

Rising state pension age

Last year, the state pension age for men and women was equalised, at 65. Men and women will now experience a state pension age rising in tandem.

The state pension continues to represent most peoples’ biggest source of income in retirement. So it could be a good idea to request a free state pension forecast from the government to understand when you will be entitled to yours, and how much you may receive (gov.uk/check-state-pension).

Increase in pension payments

Employers have duties to provide a workplace pension. Since 2012, a new system called automatic enrolment has introduced nearly 10 million new savers across the UK to pensions.

It has been a great success. In April 2019, the minimum pension payment will increase from 5% of your earnings to 8% of your earnings. At least 3% of this 8% must come from your employer. A workplace pension can be a good way of saving for later life.

This year, prepare for this increase in payments. For your future, it will pay to save.

Potential interest rate increases

After a near decade of record low interest rates, 2018 saw the Bank of England increase its base rate to 0.75%. Many commentators expect 2019 could see further small increases in the base rate. This would be good news for savers, but not so good for the millions of borrowers holding short-term loans and mortgages. So, in 2019, it would be a good idea to shop around for the best saving and borrowing rates. A small change could make a big difference.

More pension freedoms

The new pension freedoms for over-55s have proven to be hugely popular. More than £20 billion has been withdrawn from private pensions in new flexible payments. If you’re over 50 and considering your options, it would be a good idea to consult the government’s free Pension Wise service for guidance (pensionwise.gov.uk).

Get ready for the long game

2019 looks set to be a year of volatility and change. At times like these, it is helpful to remember that investments are typically designed to navigate at least a five-year horizon, or even up to 40 years if it’s our investment in our retirement. So, in 2019 it would be a good idea to remember those longer-term goals.