Since the beginning of the year I’ve started producing my own personal monthly financial report. I’ve become a lot more money-aware as retirement beckons and the certainty of a regular monthly wage lessens. That means I need to stay a lot more focused on my savings and other investments.
I’ve occasionally thought of handing this aspect of my life to a financial advisor and over the years I’ve spoken to three separate companies. All of whom pretty much advised that I give them all my money and in return pay large annual fees for highly questionable returns. I just didn’t trust any of them and have decided to go it alone which I’m convinced is the right thing to do.
Despite recent attempts to rationalise my finances including a very painful attempt to transfer a pension, which eventually did happen, I’ve got quite a broad range of investments.
Most of it is in a bank ISA, but I also have some shares, money in a business bank account and the home I own. On top of that are a couple of pensions, a small final salary-related one which will pay out a few thousand a year when I turn 60 in a couple of months. Then there is the other personal pension that I currently pay into which I’ll be able to draw on when I’m 65. I’ve also got some gold – one-gram I bought for a laugh a few years back – which is currently worth £43.80!
Altogether I reckon I’ve got just enough savings put by to carry me through to when my state pension kicks in on its current scheduled date of September 2026. Have a feeling though that this date may be pushed back further with all the measures that will need to put in place post-Covid.
It’s been quite an eye opener to see the impact of the virus on my relatively small investment portfolio which dropped by around 15% in a very short time despite the fact that most of it is in savings. Separate to this my personal pension, which in January was showing an average annual growth rate of 6%, plummeted to below 4% in a matter of weeks.
It’s reassuring to see both the shares and the pension slowly but surely heading back in the right direction despite the unprecedented economic turmoil.
More disappointing is the derisory levels of interest I’m now receiving from the banks. My ISA went down from 1.4% to 0.25% and a business savings account now pays just 0.01%.
I remember thinking not long after I’d received my first pay cheque as a callow youth that if I could one day save up £100,000 I’d be sorted for life. In those days interest rates were often in double figures and the cost of living so much cheaper.
Now that £100,000 will pay out £250 – rather than the £10,000 it once did – which barely covers the cost of taxing my old diesel Volvo.
Next week I’m going to shop round for a higher interest savings account but part of me wonders whether it’s worth the effort.