Keeping financial control during the cost-of-living crisis

Overview:

• There’s a misconception that financial advice is only useful when you receive an inheritance, a windfall or have a lot of extra money.
• Crucially, we can also help you maintain control of your money during the hard times.
• Staying on track with your financial goals is more difficult with the high cost of living, but there are strategies to help.

This year has been a financially challenging one for households in a range of income brackets. The cost of living has risen substantially as inflation has soared and remains close to a 40-year high,¹ household energy bills have skyrocketed,² and interest rates are rising³. Meanwhile, investment markets have been choppy, which has been an additional source of stress for those planning their financial future.

You may think that we can’t do anything to help, but it’s during the hard times that the value of financial advice really shines through. Here, we explain the ways that seeking advice can help you not just to survive, but thrive during economic storms.

What does a financial adviser do?

The purpose of financial planning is to help you manage your income and assets in the best way, so you can achieve your life goals.

You may think that it’s only worth talking to us if you have a specific goal in mind, such as early retirement, or after a big financial event such as divorce or receiving an inheritance, when you have a large sum of money to manage.

Although that’s part of our role – and these are all key moments when good advice is important – in reality, we can help you tackle a whole range of money-related issues. The ultimate goal is for you to reach a place of financial wellbeing, which can include:

• Making the most of your money on a day-to-day basis
• Being financially capable of dealing with the unexpected
• Feeling confident, empowered and knowledgeable
• Making smart use of debt, investments, insurance policies, tax reliefs and financial products to help you on your journey.

The current cost-of-living crisis presents a huge threat to many people and their prospects of achieving these aims. Although some are more insulated than others, the impact of high inflation, energy bills, interest-rate rises and other economic challenges have become widespread.

Despite the 80% rise in the energy price cap now being cancelled with the introduction of the energy price guarantee, prices will still increase for many who will already be feeling the squeeze from previous rises.

We’re here to help you with the most mundane aspects of money management – and the most complex areas, too. Talking about how difficult things are, or how worried you are, is the first step to feeling better about it.

Why financial planning is important

You’ve probably already put in place structures and routines to help you reach your goals. These may include budgeting, savings goals, monthly contributions to pensions or investments, and insurance or income-protection policies.

The challenge in the current environment is that some of these best-laid plans fall apart. This can be either because people’s incomes are so stretched they cannot keep up with commitments such as pension contributions or savings, or because people actively stop working towards their goals out of fear of what’s ahead – it’s a mindset of battening down the hatches.

We spend every day creating specific, actionable plans to help people reach their aims, based on realistic calculations of how much they’ll need. We can tweak and fine-tune these so that people who may feel they cannot afford to save for retirement, for example, or keep up their financial commitments, are able to do so.

Managing financial worries

As well as being a sounding board for your financial concerns and creating action plans for getting ahead, we can accurately assess how you as an individual may be affected by the current environment. Whether it’s the impact of inflation on your cash savings, how rising interest rates could influence your retirement plans, or how a recession may affect your business, we can provide a range of forecasts tailored to your circumstances.

These should offer reassurance, because your worst-case scenario may not have the terrible effect you fear. Whatever the situation, rest assured that there will be a financial solution – and we’ll make sure you find it.

At Wellesley, we can help you thrive during the cost-of-living crisis – contact us now for support and advice.

Sources:

¹ Consumer Price Inflation, UK: August 2022, Office for National Statistics, September 2022
² Ofgem Updates Price Cap Level and Tightens Up Rules on Suppliers, Ofgem press release, August 2022
³ Official Bank Rate History, Bank of England database, accessed September 2022