[Lifestyle] How to manage your money in turbulent times, from savings to mortgages

[LeenaXD]

It is understandable to be worried about your finances. The world seems to be lurching from one political crisis to the next, and each one has an impact on stock markets and prices.

A recent survey found UK consumers are worried about a slowing economy, possible tax increases in the next budget and rising food costs. We asked experts how you should manage your money in an uncertain world.

 

 

Investments

Stock markets around the world, especially in the US, were in flux earlier this year over Donald Trump’s tariff plans. Things have settled down now but it is impossible to predict what shocks may be around the corner.

If you hold stocks and shares – in an Isa or pension, perhaps – you may have been nervously checking their value. UK fund managers have been increasing their holdings in US companies over recent years, largely fuelled by the boom in tech stocks, so big moves over there have an impact here.

However, experts say the most important thing to do is to not sell up out of panic. The analyst Dan Coatsworth of the financial advisers AJ Bell says: “The worst thing people can do is to see troubling things in the news and then suddenly try to shift around their portfolio.” Markets have recovered in the past, he says, so patience is key.

Mortgages

Interest rates in the UK can be affected by what goes on globally. The Bank of England is tasked with keeping inflation down. Before the war in Ukraine started, it had begun to put up rates, and as prices increased, it continued, raising them from 0.25% at the start of 2022 to 5.25% by August 2023, before holding them there for another year.

The Bank has been reducing rates and is expected to make more cuts later this year, but the question is when. If you are planning to take out a new mortgage – either to buy a home or as a remortgage – you face a decision about whether to fix for the short or long term, choose a tracker or even to go on a bank’s standard variable rate (SVR).

source: here