Taking stock:

Are you rethinking your financial priorities as a result of coronavirus?

The upheaval of recent months may mean the financial goals you had in place at the start of the year may no longer be fit for purpose, or you might even feel differently about your future plans. Here’s why talking to an expert can help you adapt your strategy.

Everyone has been affected by the COVID-19 pandemic to some degree, from health concerns to social and financial impacts. As we have navigated through these unforeseen circumstances, the pandemic crisis may have changed how you feel about your plans for the future. But after a spring and summer of discontent, it’s important to refocus your goals this winter.

March 2020 – Battening down the hatches

When COVID-19 hit the UK in March and the country went into lockdown, there was a sense of households acting in the short-term and waiting out the storm. In financial terms, that meant working out all of the implications as quickly – especially for those who had their income hit by redundancy, pay cuts or the effects of being furloughed.

Understandably, this made us more cautious with our spending and investing. In the second quarter of this year, the UK savings ratio surged to 29.1% – the highest level on record.1 Tony Clark, Head of Retirement Marketing at St. James’s Place Wealth Management, commented:

“For a majority of families…the spring lockdown period offered little time to understand the potential financial knock-on effects of the crisis, or to adjust.”

The result, says Clark, was that plenty of people adopted a more risk-averse attitude – certainly when it came to their approach to investments:

“Even where they’ve seen their spending fall and savings rise – as commuting costs have been removed or slashed, holiday plans have been aborted or socialising opportunities have been restricted – people have typically been very, very cautious.”

The same is true of those in retirement, who might be taking less income amid the ongoing volatility – but are also seeing their monthly outgoings reduced.

People across the board are hyper-aware of what’s happening in the world, and stock market volatility during the current coronavirus outbreak has been worrying. Many have therefore taken comfort in having an easy-to-access financial buffer available, in case of emergency.

It’s hardly surprising, Clark adds:

“The pandemic has served as a brutal reminder of the importance of ‘rainy day’ funds – not just for our peace of mind, but because our finances can so easily be undermined by events outside our control.”

November 2020 – Time to take stock

While it’s understandable to want to keep a tight rein on our funds, this winter we should take the opportunity to refocus on our financial well-being and direct our efforts towards building up longer-term financial resilience.

It seems likely that varying levels of social restrictions will feature through winter 2020/21 – in England, we’re currently one week into our second lockdown, due to end on 2nd December (with the local ‘tiers’ system likely to still be in place, putting restrictions on high-risk areas). On Monday this week (9th November), Wales emerged from their 17-day fire-break lockdown, while Scotland currently has a five-level alert system in place. Today (13th November), the four-week lockdown in Northern Ireland was due to come to an end, but it has now been extended for one week.

With these winter restrictions, UK spending will once again be curtailed, so it’s an opportunity to take the time to look at the bigger picture and to reflect on what you now want from your finances.

In times like these, we have a heightened sense of the important role things like protection and savings have on our future and peace of mind. According to the latest research by Aviva, 30% of UK adults aged between 45-54 are concerned that the financial strain caused by the coronavirus pandemic is negatively impacting their mental health.2 While this shows there’s undoubtedly been an increase in financial awareness, it’s time to act upon it.

If you’re in a position to put some money aside, you’ll create space for reprioritising goals and can make more informed decisions on your long-term interests. Think twice about stopping your pension contributions to save cash. There’s no question that it’s prudent – essential even – to have an emergency fund, but once you’ve got this sorted, it’s wise to shift your focus to the longer-term.

2021 – A change of direction?

For many, the upheaval of recent months has meant the goals they had in place at the start of the year may no longer be fit for purpose and might, in some of these cases, need a more urgent review.

The uncertainty may even have nudged people to, for example, reassess how long they want to continue working, or whether to do something different with their lives. It should also prompt them to talk openly about their financial ambitions and seek out expert support when renewing their financial choices.

The value of advice

Our goals help to determine what we do with our finances and how we think about them. They are also inherently emotional drivers, reflecting our attitudes, hopes and aspirations for ourselves and our families. And when emotions get involved, understanding how to achieve those outcomes can be far from easy.

This is where professional advice can come into its own.

A financial adviser will build the emotional drivers into rational objectives, and will bring you back to your core priorities. They will help you to focus on your goals and work out how you get there, and to protect yourself from volatility, for example, unexpected redundancy.

At Wellesley, our advisers can assess your holistic financial situation and build a plan to match your ambitions. We will also regularly review your plans to ensure your investments continue to reflect your risk appetite and that everything remains in line with your objectives.

Want to review your financial plans? Or take advice on reprioritising for the future? We’re always on hand. Just ask.


1 Office for National Statistics, Households’ Saving Ratio, September 2020
2 Research of 2,000 UK consumers conducted on behalf of Aviva by Censuswide, August 2020. Of which there are 301 respondents aged 45-54.

The value of an investment with St. James’s Place will be directly linked to the performance of the funds selected and the value may fall as well as rise. You may get back less than the amount invested.