By Ryan Yule, senior financial adviser at Phil Anderson Financial Services
LAST week, BHS, the well-known British high street store, announced that it was going into administration – with over 11,000 staff facing the threat of redundancy.
The demise of BHS has been largely blamed on the company’s inability to embrace new technology quickly enough, and its outdated product range. Put simply, BHS got left behind by its customers and overtaken by its competitors.
Whilst we could tut with disapproval at BHS management, we also have to admit that many of us get caught up in a ‘BHS Syndrome’.
It’s often too easy to get stuck in a rut of doing things or behaving in a certain way, without moving forward regularly reviewing the things which are most valuable to us.
It is often the things that we don’t deal with on a daily basis which are the most vulnerable.
We may update our mobile phone every couple of years but many people don’t maintain the same rejuvenating approach to financial planning, despite the fact that money held in a pension can be worth considerably more than a smart handheld device.
What often happens is that, over the years, people accumulate pots of money. They can be odd pension pots from a variety of employers, which were opened 20 or 30 years ago, but have not been closely looked at since.
They could be personal pension schemes, which are outdated and costly in their fee structure, or are invested in funds which are no longer suitable.
With forgotten pension schemes, the dangerous assumption is that someone, somewhere will be taking care of that important money and that the fund will grow as imagined and all will be OK.
The same applies to some old savings accounts, dormant PEPs or premium bonds.
Pension saving and investing products have moved on. There are more investment choices than ever before, and pension schemes have become cheaper and more efficient to administer in recent years.
It is really important to regularly review your financial plans, to engage in how your money is working for you and where appropriate make the most of new financial products available.
A good financial adviser will be able to review your existing arrangements and advise you how to best move forward.
They will also ensurethat your investments are set up tax efficiently.
The aim is to know that your finances are on track and that the products you are investing into are working towards reaching your long term goals.
It is about treating your money as asmall business, which needs careful management and ongoing reviews to ensure it progresses towards its goal.
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