Peavoy Financial Planning talks Financial Tips for 2021

Financial Tips (1)

Reviewing your Finances

There are many things we all can do to improve our financial position, both in the short term and over the long term. In today’s piece I look at five areas for households and businesses to evaluate in 2021.

1. Review your Mortgage

Over the last five to six years we have seen the value of properties increase in Portlaoise and right across the country. At the same time some of the mortgage rates being offered by lenders, have in general come down. This means two positive things have happened, that could reduce your monthly mortgage outgoing. The loan to value of your property has decreased and the rate you could be borrowing at may have come down. Our advice is to have a chat with your existing Mortgage Provider to see what they can do for you and to also have a chat with a Mortgage Broker who can assess the whole market for you. This will make sure you are not paying over the odds for your loan. .

2. Assess your Mortgage Protection

Many people take out the mortgage protection policy they use, to act as security on their loan with the same financial institution as their mortgage. This is often done for handiness sake and to speed up the whole mortgage process. What many people don’t know is they can review this Mortgage Protection policy and change the provider, if it makes sense to do so, without altering anything on your Mortgage. At Peavoy Financial Planning we distribute these solutions from the five insurers currently operating in this market: Aviva, Irish Life, New Ireland, Royal London and Zurich. By taking part in our mortgage protection evaluation process, you will have the comfort in knowing that you have the best policy to suit your needs, with the best benefits at the cheapest price.

3. Parents & Life Assurance

Life Assurance is not for you. It is for your dependents and those you love. If your a parent make sure you have Life Assurance. Personally speaking, I think it should be compulsory for all parents. If you want to drive, car insurance in compulsory, if you have a mortgage, home insurance is compulsory. Our children are our dependents and they depend on us their parents to earn an income, to put a house over their head, to feed them, to educate them. If the unforeseen happens and a parent passes away this income may stop.  It is vitally important to those you leave behind to have a solution in place to replace this income, until such a time as your dependent can earn for themselves. We all think it will never happens to me, but we all know someone who died unexpectedly. If your a parent put Life Assurance in place today, in addition to any Mortgage Protection you may have.

4. Set up a Pension / Review your Pension

The State Pension system in Ireland is creaking. We do not know what it will look like in the future. Will it be around in its current format when you retire, what age will you be able to claim it at, how much will it be, what will inflation be like between now and when you retire. These are all questions none of us can definitively answer. Have you tried to live on €248.30 per week?

There are a number of incentives for every individual to start a pension. If you defer some of your income today and contribute to a pension, it will reduce the level of tax you pay. While the money is in the pension fund, any growth will also be tax free.  At retirement you will be able to get some of it out in a tax free format, with the balance being used to provide you with an additional income in retirement.

While it is never too late to start, the younger you start it the better, as your fund has more time to benefit from any tax free compounding growth. Make sure 2021 is the year to take your pension funding seriously and grab the bull by the horns and put a proper structured plan in place.

5. Long Term Savings

In the current interest rate environment, we are having numerous inquiries from people looking for a new home for some of their savings. Money on deposit is fine for short term needs, or for keeping as an emergency fund. Long Term Savings can be approached differently. This is money that you may require in 7 years or more (eg. Educational Funding for Young Children).

The benefits of long term investing are well proven over time. The way the investment is structured and works will help manage the risk. You put money in monthly. You invest the money in a multi asset solution, comprised of all the different asset classes. This heavily diversified solution means that you are not putting all of your eggs in one basket.

A regular savings habit like this can make all the difference to your long term finances, so our advice today is to start with what you can, with a view to increasing it in the future.

If any of the above is of interest to you, do get in contact with me me here at Peavoy Financial Planning and we will work through your specific financial requirements.  I can be contacted on 087-2902206 or alternatively by email on .

David Peavoy BA, QFA, LIAP is the Owner of Peavoy Financial Planning whose practice is based in Office 5b, Portlaoise Enterprise Centre, Clonminam Business Park, Portlaoise, Co Laois.

David Peavoy T/A Peavoy Financial Planning is regulated by the Central Bank of Ireland

Disclaimer: All data and information provided within this blog is for information purposes only. It should not be taken as specific advice for your situation. Peavoy Financial Planning makes no representations as to the accuracy. completeness, or suitability of any information and will not be liable for any errors, omissions or delays in this information or any losses, injuries or damages arising from its use

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