The ongoing coronavirus crisis continues to put pressure on family income as the true impact of the Government’s social distancing strategy is felt around the UK. There are a number of schemes that have been launched to help businesses, those in full-time employment and the self-employed financially. But the enforced isolation we’re all experiencing has also been a time for many people to review your personal finances.
Despite the concerns that many people feel at this time, it’s also an opportunity to think about the future and how we can safeguard ourselves in the future.
Here’s our checklist for the things you can do now to give yourself complete peace of mind that you’re protected in the future.
Does your mortgage need updating?
Many people are worried right now about how to pay their mortgage. If you share that concern, you’re likely to qualify for the Government’s mortgage relief scheme, which offers a 3-month ‘holiday’ from mortgage payments to ease the pressure on your finances.
Even if you don’t have any immediate concern about meeting your monthly payments, this is a good moment to review your existing deal.
If you’re on a fixed rate or fixed-term mortgage, do you know when your deal expires?
Even though there’s a lot of publicity around reminding us all of the possible benefits that can be gained from switching your mortgage when you’re approaching the end of your existing agreement, it’s still surprising how many homeowners allow themselves to lapse to their lender’s standard variable rate (SVR).
Paying your mortgage at the SVR is more expensive and although there are circumstances where it might not make sense to move to a different rate (for example, if you’re planning to move or remortgage and want the option to move to another lender without having to pay an exit fee on your current mortgage) it’s a good idea to look at your needs a few months before your existing deal runs out, as most lenders will allow you to start applying for a new rate between 3 and 6 months ahead.
You should always talk to a professional mortgage broker as he or she will be able to give you the right advice about the action you need to take with your mortgage, whether that’s to stick with your current lender on a new deal or switch your mortgage elsewhere.
Is your life cover fit for purpose?
It’s easy to forget about things like life insurance when our circumstances change, but it’s important that you take a moment each year to review the provision.
It may be that you took out your policy years ago, perhaps to cover the remaining term on your mortgage when you first took it out, but if you’ve had a change in your circumstances since then – maybe you’ve remortgaged and extended the term, for example – then it could be your current level of insurance won’t cover what it needs to cover should the worst happen.
If you discover that your life insurance is no longer adequate, then speaking to a professional adviser like Oportfolio can help you to choose the right product.
Is your income protected?
Your life insurance will payout when you die, ensuring the people you leave behind are looked after financially. But what happens if you can’t work – either permanently or for an extended but temporary period?
These are situations that can be overlooked when planning for the future, but as we age our health inevitably becomes more vulnerable.
There are two types of protection that can give you peace of mind when it comes to your income. One is critical illness cover, which will pay out a tax-free lump sum on diagnosis of a serious (often terminal) illness.
This type of insurance, also known as cancer cover, since that is the condition most policies payout against, ensures you have enough money to allow you and those close to you to live comfortably.
The second type of financial protection you might consider is income protection. This is a useful policy replaces a significant proportion of your salary if you’re unable to work for a prolonged length of time, but will eventually be able to return to work in the future.
Although the sum paid is usually around 75% of your gross salary, the fact its tax-free means it is likely to more or less equal to your take-home pay.
At Oportfolio we have the experience and expertise to offer you professional advice about the suitability of these products for you.
These are the policies that are most likely to be on your radar because they renew each year and you’re reminded of that by the insurer.
Again, it’s worth taking a moment to speak to an adviser to ensure you’re getting the right product and to explore the market to see what else might be available.
At Oportfolio we use a trusted panel of mortgage and insurance providers in order to give you the best possible advice about securing your financial future.
Oportfolio Limited is an appointed representative of Primis Mortgage Network, a trading name of First Complete Limited which is authorised and regulated by the Financial Conduct Authority
Your property may be repossessed if you do not keep up repayments on your mortgage.
Oportfolio Ltd fees are payable on application. We charge a broker fee for property purchases of £495 and a remortgage/further advance fee of £395. Our product transfer fee is £295.