4 tips to manage your finances in the wake of the EU referendum
If the recent results from the EU referendum have left you surprised, then it will only have been a matter of time until your mind turned to the financial implications. Leaving the EU is a political change that this country hasn’t experienced, meaning the impact upon our finances and economic future is unknown. It can be easy to think that there may be challenging times ahead as we move into a new era.
1. Panic stations.
With all this uncertainty, it’s easy to panic and start thinking about how secure your hard-earned cash may now be. You may be worrying about secure your capital is or what your next move should be. Should you sell your house now? What will happen to the job market? Should you make changes or is it better to sit tight and wait for the banking world to respond?
Whilst concern is easily understood and in fact sensible, in actual fact overly worrying is what will contribute to any fluctuations in financial markets in the short term, rather than the EU exit itself. Rash decisions and panic buying or selling are more likely to bring about changes in the current financial market and this is what you need to consider.
In order to put your mind at ease, we have 3 simple tips to help you think clearly and calmly and avoid that post-Brexit panic.
2. Don’t fall for the fall-out.
The best advice at this current moment is to simply take some time to think clearly about where your money is invested and why.
Assets you may have purchased or investments you may have made in the past were a good idea at the time but is this still the case? Do they still make sense to you? Do some research, think about your future and age and be prepared to be flexible in your approach. Use this change in our political landscape as a chance to conduct a review of your finances in order to prepare for the future.
There should be no need to panic or make rash decisions though. According to financial experts, any major changes in markets due to Brexit will not surface for the next two years at least and the banking sector is actually in a more stable position than it has been since approximately 2007. Any changes to the house or job market are unknown at this stage and so far, are not indicating any major crash.
3. Don’t put all your eggs in one basket.
All this being said, a review of where you have placed your funds is never a bad idea and the best move you can make at this point is to diversify your portfolio. This particularly the case if up until now, you have kept your finances in a singular point. Spreading capital across investments will minimise the risk of being severely affected by any future dip in the markets.
Varying the types of assets you have and the location of your investments is also the best chance of safeguarding your finance. If you are far off from retirement, your pension is unlikely to be majorly affected. If you are approaching retirement or already retired, you may want to consider removing a sum or keeping invested. Whatever you decide, now is the time to seek pension advice and to review your situation.
4. Relax – but keep your adviser on his…or her toes
If you haven’t spoken to your financial adviser in some time, it may be worthwhile picking up the phone and requesting a commentary from the investment committee or fund manager of your investments and pensions to see how they had been preparing for Brexit and post-Brexit. You do this basically to keep your adviser on their toes, not that they are not, but it’s good to make sure.
On the other hand it may be the right time to review your situation and whether market changes or even potential changes are likely to affect when you will retire and how you will access your pension. For instance, if you had been planning on purchasing a lifetime income, that is an annuity, with your pension fund, you may want to reconsider this due to the weakening of the pound.
Disclaimer: The information contained within this article are provided as illustrative purposes only based on legislation at the time of publication. Nothing in this article should be construed as advice or guidance to one’s personal situation. The value of your investments may go up and down, similarly other aspects of your wider lifestyle and financial context may impact on your objective. In a nutshell, don’t rely on blogs and the articles for personal advice, and always seek advice from a qualified professional.
