Is now the time to take control of your finances?

2020 was a year of uncertainty for us all. We awaited the outcome of the US election, we didn’t know if a Brexit deal could be agreed in time, and the Covid-19 pandemic caused sharp falls in share prices across the globe.

Written by Rebecca Stein, Investment Manager, Charles Stanley Wealth Managers, Oxford 

Although this political uncertainty has now passed and vaccines are being rolled-out to help fight the pandemic, there are several factors to consider in 2021 to get your finances in good shape.

1. Have an emergency cash reserve

One consequence of the pandemic has been that some of us are spending less. Consider putting this excess money to better use, either by investing it in the markets or a pension or saving it in a tax efficient vehicle such as an ISA.

Rebecca Stein, Investment Manager, Charles Stanley Wealth Managers, Oxford
Rebecca Stein, Investment Manager, Charles Stanley Wealth Managers, Oxford

On the other hand, some people have been put on furlough and have had to supplement their income with other sources such as dividends (a sum of money paid by a company to its shareholders out of its profits). This is where an investment portfolio can be useful, whether that be to draw on any natural income generated, or to withdraw capital. 

Make sure you prepare for the unexpected. It is recommended that you have at least three to six months of cash as an emergency fund. 

2. Prepare for life milestones 

Be clear on your life goals and what you want to achieve so you can plan your finances accordingly. Do you know what your short term and longer-term goals are? Whether you are buying a house, starting a family or saving for a rainy day or planning for retirement it’s important that you are financially prepared and have a clear plan.

3. Make the most of your tax allowances and exemptions

Saving, particularly for your pension, may not be something you are thinking about right now, but if you don’t you could be missing out. Also taking advantage of the tax benefits of an ISA and using as much of your allowance as possible can also make a difference and offer more attractive returns than a regular savings account. You can save up to £20,000 in tax year 2020/21 which ends on 5th April 2021.

4. Prepare for the ultimate tax – inheritance tax (IHT)

Whether you have inherited a sum of money and want to make the most of it, or if you want to plan ahead for passing on your own estate to make sure your loved ones get as much of your hard-earned money as possible, it is worth getting advice. The sooner you start planning, the more options you have to minimise the amount of inheritance tax that might be due. Similarly, if the main or sole earner in your household has passed away you may need help in sorting out your financial affairs. 

5. Watch out for the investment gap

An investment gap opened up over the last decade as savers opting for cash savings typically received 94% lower returns than investors. To put this into perspective, £10,000 invested in global markets in 2010 would now be worth approximately £30,742, compared to just £11,230 in a cash savings account. Interest rates are exceptionally low at the moment, so consider whether investing would be a better option over the long term. 

6. Consider a Lasting power of attorney (LPAs)

People of all ages and levels of wealth should consider LPAs which allow your loved ones (known as the ‘attorneys’) to carry out your wishes if you become unable to do so yourself. If you have one in place, it is important to let your attorneys know you have appointed them and inform any professional advisers you work with, such as financial advisers, investment managers, solicitors and accountants. 

7. Get advice

In a world coming out of lockdown, it is worth reviewing existing plans to ensure they remain suitable for what may lie ahead. If you’re thinking about your family’s financial future and would like to know how our services can help, please get in touch to arrange your free consultation with a member of our Oxford team. 

For information on how Charles Stanley can help you plan a more prosperous future, call us on 01865 987 485 or visit

This is not financial advice based on your circumstances. The value of investments, and any income derived from them, can fall as well as rise. Investors may get back less than invested. Charles Stanley is not a tax adviser. Information contained in this article is based on our understanding of current HMRC legislation. Tax treatment depends on the individual circumstances of each person or entity and may be subject to change in the future. Charles Stanley & Co. Limited is authorised and regulated by the Financial Conduct Authority. 

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