Updating your spending plan

Trimming the fat

We won’t highlight the scary numbers around the cost of living crisis we now find ourselves in, but we will do our best to ensure that you feel prepared.

In many ways our clients are not as impacted by this as many folk in our wider communities – we don’t have any clients earning minimum wage for example. But we do have clients who are in their retirement and for whom small changes can have repercussions over the longer term. We also have a number of clients who fall into the ‘middle-earners’ bracket (recently identified in the press as a group who will feel the pinch).

This particular group of people are generally logical who therefore know that the answer probably lies in being sensible about budgeting; and cutting costs where it is possible to do so.

There is a lot of ’bumpf’ in social media currently about millennials who are tired of the advice from older generations to cancel their Spotify account and stop buying their skinny lattes at Starbucks in order to save money. This advice given in the context of trying to save up for a deposit on a house is frankly inadequate and I do understand the millennials’ argument about that.

However if we apply the same sort of methodology to the current crisis of ‘my living costs are increasing by £150pm’ – then there is actually some common sense to this approach – take a look …

Spotify £9.99pm

Netflix £10.99pm

Starbucks £40pm (assumes halving a one-coffee-per-workday habit)

Wine £20 (buy two bottles less per month)

Takeaway or meal out £40 (reduce by one per month – amount depends on size of household)

Amazon Prime £7.99

These alone total £128.97

We’re not talking about huge lifestyle-changing cuts here – we’re talking about small changes that soon add up. Shopping around for cheaper options on your existing expenditure is another way to cut costs (sometimes significantly) – mortgage, insurances, TV & broadband package, mobile phone contract.

UPDATING YOUR SPENDING PLAN

Martin Lewis (Money Saving Expert) comes up with new suggestions all the time – frankly I find the layout of his website ‘messy’ but I do rather like his weekly newsletter which is always full of good ideas.

It probably goes without saying but ‘now’ would be a very good time to review and update your spending plan – you can only consider how to cut costs if you know where the biggest savings are to be had – we know this can be a painful exercise so we offer a few ways for you to do this – you can click here for our video and for a pdf or an excel version of our income and expenditure form; OR you can send us (securely via the portal please) the last three months of your bank statements and we’ll do the legwork for you; OR we can work from your own ‘budget’ document – whatever form that takes.

However anxious you may be about impending price rises, there are options; there are changes you can make. If you are ever feeling overwhelmed about all this though, please do get in touch. We will support you however we can.

You can read more articles about Pensions, Wealth Management, Retirement, Investments, Financial Planning and Estate Planning on my blog which gets updated every week. If you would like to talk to me about your personal wealth planning and how we can make you stay wealthier for longer then please get in touch by calling 08000 736 273 or email info@solomonsifa.co.uk

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Updating your spending planJemima Thomas2023-12-01T12:12:45+00:00

UTILITIES BILL: WATT SHOULD I DO?

TODAY’S BLOG

WATT SHOULD I DO…

As I’m sure you’re aware, energy prices have gone through the (hopefully insulated) roof. Let’s dive into the details as to why this is, and the action being taken to mitigate the problem. First things first, gas prices have skyrocketed as a consequence of huge demand outstripping supply. With 85% of UK households using gas boilers it’s no surprise that the UK has been heavily impacted. However, increasing demand is not the sole factor in this equation. With the outbreak of conflict in eastern Europe, the UK and much of the EU has lost one of its gas suppliers in Russia, which made up 10% of the UK’s natural gas imports. While this might not seem to be a massive amount, other European nations are considerably more dependent on Russia and its exports.

In hopes of mitigating the steep rise in energy prices, the British government has offered grants of up to £350 to millions of households across the country to alleviate pressure on the purse strings. They have also invested considerably in renewable energy over the past decade, totalling around £90 billion. Key areas of investment include a handful of nuclear power plants and tripling the UK’s already world-leading offshore wind power figures.

The trouble is that developing a well-diversified power network takes time. These are long-term projects that won’t be complete for several years and they are EXPENSIVE. Which begs the question, is enough being done in the short-term? Is there even anything else that can be done? Especially since we haven’t seen the worst of it yet. Various predictions assert that we could see the price cap rise another 26% this coming winter, and with 30% of people reporting that their energy bill direct debits have doubled since the increase earlier this year (according to a survey conducted by moneysavingexpert.com), there should be a very real fear about the ramifications of two large energy price cap increases in the same year.

Finally, what options do we have to best protect ourselves and save our money? The general consensus is to stay put for now, especially if you have a fixed contract with your energy supplier. Regardless, it may still be worth remaining vigilant for better deals as always (although they are pretty scarce at the moment). Ultimately, these are turbulent times and the dynamic nature of this sector makes it difficult to say anything with certainty. Just keep an ion things!

Since writing this piece, more updates and projections have been released by Ofgem. They are warning of further price cap increases this October by an average of £800. That’s roughly a 40% increase. Consequently many experts are changing their tune slightly, and are now saying it may be worth switching if you can get a fixed rate of 35-40%. If you’d like to do some further reading on the subject I have a few links to some articles I think you may find interesting:

Sam Harris
Solomons IFA

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UTILITIES BILL: WATT SHOULD I DO?Jemima Thomas2023-12-01T12:12:49+00:00

ENERGY COST CRISIS

TODAY’S BLOG

ENERGY COST CRISIS

It seems that there is a weekly crisis at present, by the time you read this there will likely be a new one! I wonder if you are bracing yourself for an expensive winter? As you probably know, there is a global surge in the cost of gas at wholesale has led many companies to drastically increase their prices. While many companies have reacted by hiking up costs even more for customers, others have taken themselves off price comparison websites and some have gone bust. Its worth mentioning that price comparison websites aren’t all that you may imagine, they are not whole of market and only show companies that provide them with a commission.

Anyway your household and mine are facing much higher gas bills this winter due to a global surge in wholesale gas prices that have forced some energy companies to go bust. The British public has already been hit with energy price hikes over the last few months and could be paying hundreds more this winter, unless they counterbalance the extra costs by making some simple changes to their usage. The news that another five energy firms have folded in recent months will no doubt worry many householders but Ofgem has said it “has systems in place to look after consumers”. An Ofgem spokesman said that currently wholesale gas prices are at a record high, driven by international supply and demand factors. This is undoubtedly putting pressure on companies – with four leaving the market over the last few weeks. In the past few months Utility Point, People’s Energy, PfP Energy, MoneyPlus Energy and Hub Energy have all ceased trading – something which is thought to have affected half a million British households. More recently Green and AVRO Energy both collapsed with an estimated 800,000 customers between them – Octopus has stepped in to takeover.

FULL OF GAS

These consumers will be given a new supplier, that means extra hassle for them with the costs passed onto customers. Speaking from personal experience, my supplier “Green Energy Network” went bust last year and we were switched over to EDF. An unfortunately timed problem with the meter itself during this period, left us in limbo as we waited for a new account to be registered and set up, which too several weeks. We finally got there and it wasnt a major problem, but it wasnt “straight-forward”.

OFGEM added that it is working closely with the Government to manage the wider implications of the global gas price increase and it is not thought that this will lead to a complete halt in supply. Make of that what you will, I’m yet to be convinced that the current Government could successfuly manage a raffle.

As such there is no better time to see if you qualify for the Warm Home Discount Scheme, which could ensure some people are £140 better off. To find out, people can speak to their energy supplier, most of them are signed up to the scheme if they have 250,000 customers or more. More than two million UK households should qualify for this rebate on their energy bills this year and it’s important to get in touch with them early as there is only a limited amount of people energy companies can help.

What I might suggest is that you get on with reviewing your gas supply. I would recommend having a look at Martin Lewis’ website www.moneysavingexpert.com where you can do a search. If you want a £50 discount off Octopus, here is a code that you can use (I get £50 too) but do your own research about what is best for your usage. Here is the link: https://share.octopus.energy/tulip-shark-521.

Long story short, make a record and update your spending plan – either just let us know with an email, or update your information within our secure portal.

Dominic Thomas
Solomons IFA

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Solomon’s Independent Financial Advisers
The Old Mill Cobham Park Road, COBHAM Surrey, KT11 3NE

Email – info@solomonsifa.co.uk
Call – 020 8542 8084

7 QUESTIONS, NO WAFFLE

Are we a good fit for you?

Take Survey

PRIVACY POLICY | DATA PROTECTION

GET IN TOUCH

Solomon’s Independent Financial Advisers
The Old Mill Cobham Park Road, COBHAM Surrey, KT11 3NE

Email – info@solomonsifa.co.uk Call – 020 8542 8084

7 QUESTIONS, NO WAFFLE

Are we a good fit for you?

Take Survey

PRIVACY POLICY | DATA PROTECTION

ENERGY COST CRISISDominic2023-12-01T12:13:02+00:00