If the last decade was all about mental wellbeing, we believe it’s time to get ready for a new decade of financial wellness. Money problems can have a huge impact on mental health and relationships so it’s time to remove any stigmas around struggling financially or asking for help, and find ways to stay financially ‘well’.
Learning valuable financial skills like budgeting, saving for bigger expenses, borrowing wisely, and understanding how mortgages and credit cards work can be the difference between feeling stressed about the future, and feeling confident and even excited. This difference is at the heart of financial wellness.
What you can do:
- Take stock of your finances and create a plan to get you where you want to be – these 7 smart money lessons could help.
- Try these 5 ways to make talking about money easier.
- If you’re struggling with debt – get some help. Citizens Advice and Step Change are great places to start.
2. More tech to help manage your money
As we fast forward into the future, you’re only going to hear the phrase ‘there’s an app for that’ more often.
Every month, new apps come online touching every aspect of life. Form a new habit (Habit), track your fitness (Strava), count your calories (MyFitnessPal), even write that novel (Scrivener).
When it comes to money management more and more can be done on apps. And you might be surprised how easy they are to use.
Of course we would say this, but the Standard Life app is a good starting point. It allows you to manage your Standard Life pensions and ISAs (Individual Savings Accounts) on the go and more than 100,000 customers are enjoying the benefits of being able to do this easily and securely.
Look out for other apps like Moneydashboard, which allow you to see all your accounts from different providers in one place – from pensions, to savings, to current accounts.
If you’re trying to be a better saver, you might like MoneyBox, which rounds up your spending to the nearest pound, and moves the extra pennies into your chosen savings account.
Laura Tervit, one of our MoneyPlus features team, says: “I managed to save thousands of pounds through round ups and an automatic ‘Payday Boost’. When I needed a new kitchen, the money was there for me and I still have some left in my ISA.”
What you can do:
- Look around your app store. What do you need help with? There are apps for saving, budgeting, managing debt and more.
- If you haven’t already, register for online services with Standard Life or download our app.
3. Maybe later baby – new parents are getting older
One continuing lifestyle trend is that people are waiting until they’re older to have children. For 10 years in a row, official UK stats show that the age of first-time mothers and fathers is rising. It’s now 30.6 for mums and 33.6 for dads.
Those choosing to come later to parenthood may have more time to build up savings, address debts and get onto the property ladder. Which could be helpful, as the average cost of bringing up a child in the UK to the age of 21 is (brace yourself) £230,000.
If this applies to you – or someone in your family – there are some great ways you can get ready financially.
ISAs offer a tax-efficient way to save and there are different types that can be used for different saving goals, including getting on the property ladder or saving for kids.
What you can do:
- Find out if there’s an ISA that could work for you – What are ISAs, who are they for and when should I consider one?
- Prospective parents can check what leave they’re entitled to. Gov.uk is a good starting point.
- Find out how registering for child benefit can help protect the State Pension. If this applies to you, think about keeping up pension payments when you’re on parental leave.
4. Many of us are living longer – how you can prosper
Average lifespans are getting longer and more people than ever before are working past the age of 65.
You’ll hopefully be retired for a long time and the State Pension age is increasing to 66 by October 2020. So, while some will want to keep on working because they enjoy it, anyone looking forward to taking their foot off the gas needs to save and plan carefully.
Consider saving as much as you can into your workplace or private pensions and track your progress with a pension calculator tool.
Putting in a bit of extra money now could make a big difference to your future. However, it’s important to know that pensions are investments so their value can go down as well as up and they may be worth less than was paid in. There’s more in our article What’s so good about a pension?
Almost a million people are set to reach 55 this year and will be able to access their pension pot under pension freedom rules. If you’re one of them, this article can help you understand your options if you’re thinking of taking money from your pension soon.
What you can do:
- Check your State Pension age and how much you can expect online, like 18 million others have already.
- Check out the new Retirement Living Standards to see how much you might need to save to enjoy the retirement you have in mind.
5. More people are unlocking the money tied up in their homes
Because the value of property has soared over recent decades, it’s not surprising that when they retire, a growing number of people want to enjoy the value locked up in their home without the upheaval of selling and moving.
There has been a surge in interest in equity release in recent years and this looks set to continue as research shows that more than half of homeowners aged 45+ see property wealth as part of their plans for later life.
Equity release allows over-55s to take cash out of their home, tax free, minus any outstanding mortgage. You can find out how it works, the different types of equity release available, and whether it might be suitable for you in Equity release: what’s behind its growing popularity.
It’s important to understand everything that’s involved and take financial advice before committing. Equity release may involve a lifetime mortgage which is secured against your property or a home reversion plan.
And, of course, it’s just one of the growing number of ways people are funding their retirement these days – find out about some of the alternatives here.
What you can do:
- Find out more about equity release from Standard Life.
- Explore the value of professional financial advice.
- Download the Money Advice Service guide to equity release.
Pensions and Stocks & Shares ISAs are investments and their value can go down as well as up and may be worth less than was paid in.
The information provided here is based on our understanding as at January 2020 and should not be regarded as financial advice. If you’re unsure you should speak to a financial adviser. There will likely be a cost for this.
Tax rules and legislation may change in the future and your own individual circumstances will have an impact on tax treatment.
Standard Life accepts no responsibility for the information contained in external websites. These are provided for general information only.