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MARY MACFARLANE: Keeping financial control during the cost-of-living crisis

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This year has been a difficult one, financially speaking, for households in a range of income brackets.

The cost of living has risen substantially as inflation has soared and remains close to a 40-year high [1], household energy bills have skyrocketed [2] and interest rates are rising [3]. Meanwhile, investment markets have been choppy, which has been an additional source of stress for those planning their financial future.

You may think that this isn’t the time to be seeking financial advice, but it’s during the hard times that the value of financial advice really shines through.

What does a financial adviser do?

The purpose of financial planning is to help you manage your income and assets in the best way, so you can achieve your life goals.

You may think that it’s only worth talking to a financial adviser if you have a specific goal in mind, such as retirement, or after a big financial event such as divorce. The reality is there are benefits in seeking advice at all stages of life.

The ultimate goal for a financial adviser is to help you reach a place of financial wellbeing, which can include:

  • Making the most of your money on a day-to-day basis
  • Being financially capable of dealing with the unexpected
  • Feeling confident, empowered and knowledgeable
  • Making smart use of debt, investments, insurance policies, tax reliefs and financial products to help you on your journey

The current cost-of-living crisis presents a huge threat to many people and their prospects of achieving these aims. Although some are more insulated than others, the impact of high inflation, energy bills, interest-rate rises, and other economic challenges have become widespread.

Why financial planning is important

You may already have put in place structures and routines to help you reach your goals. These may include budgeting, savings goals, monthly contributions to pensions or investments, and insurance or income-protection policies.

The challenge in the current environment is that some of these best-laid plans fall apart. This can be either because people’s incomes are so stretched, they cannot keep up with commitments such as pension contributions or savings, or because people actively stop working towards their goals out of fear of what’s ahead – it’s a mindset of battening down the hatches.

Financial advisers work with their clients to create specific, actionable plans to help people reach their aims, based on realistic calculations of how much they’ll need.

Managing financial worries

As well as being a sounding board for your financial concerns and creating action plans for getting ahead, financial advisers can accurately assess how you as an individual may be affected by the current environment.

Whether it’s the impact of inflation on your cash savings or how rising interest rates could influence your retirement plans, a financial adviser can provide you with reassurance and help you to find a solution that works for you.

n To receive a complimentary guide covering wealth management, retirement planning or Inheritance Tax planning, contact Mary MacFarlane Financial Planning on 01463 793542 or email mary.macfarlane@sjpp.co.uk

MM Final Logo CMYK
MM Final Logo CMYK

[1] Consumer Price Inflation, UK: August 2022, Office for National Statistics, September 2022

[2] Ofgem Updates Price Cap Level and Tightens Up Rules on Suppliers, Ofgem press release, August 2022

[3] Official Bank Rate History, Bank of England database, accessed September 2022

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