A ‘back to school’ moment for your finances

This article is the latest part of the FT’s Financial Literacy and Inclusion Campaign

The start of the academic year has always been a moment when I schedule in some time for financial planning — and given the winter that’s coming, maybe you should too.

In years gone by, this process has been positively tinged with the smell of fresh exercise books. Approaching the halfway point of the tax year, it’s a good time to review the investment performance of your Isa and pensions, adjust your budget and check your savings goals are on track.

This year, however, you may well be feeling a sense of foreboding. There’s even more political and financial uncertainty than usual, and we have rising inflation, spiralling bills and volatile markets to contend with.

Now more than ever, colleagues in the FT newsroom are stopping by my desk to ask questions about their personal finances. The three most common topics? Energy bills, mortgage rates and retirement worries.

As suppliers start to increase monthly direct debits, submitting regular meter readings is a must, as is understanding your household’s power consumption and what you could do to manage this.

People who live in period properties will be in for a shock, as their homes are likely to be the most energy inefficient. However, higher prices will shorten the investment “pay back” of installing solar panels (do drop me a line if this is something you’re considering).

In a double feat of forward planning, my stepdaughter’s Christmas present from us will be having “smart” radiator valves fitted in her home that are compatible with her Hive app.

Rising energy bills could add hundreds to your monthly costs, but so too could rising interest rates when you come to remortgage.

The best piece of forward planning advice? Knowing the date that your current fix expires, and looking for a new deal six months beforehand (it’s possible to “lock in” a rate ahead of time).

If you’re thinking of paying to break your current fix and take out a fresh one, I’ve had good feedback from readers about the free calculator on the Nous.co app I recently mentioned, which helps make a cost comparison.

Needless to say, all of these things are going to take a much bigger chunk out of our budgets in future.

The record credit card borrowing figures we’re seeing show how many people already use debt to plug gaps in their budgets. For some, the solution might mean having to cut back on what you regularly put aside in savings and investments.

This is never a decision to be taken lightly, particularly if you’re considering trimming your pensions contributions as you’ll lose out on employer top-ups and tax relief.

An exercise you might find helpful is cash flow planning — a tool beloved of financial planners. For the months ahead, plug in the likely rises to your living costs and major expenditure (such as Christmas, and January’s tax bill) then see how your budget could absorb the shock of this.

Lastly, many will worry about the long-term implications for their investment goals.

Charlotte Ransom, founder of Netwealth, says the number one question her clients are asking is: will I have enough to retire on?

“People want to understand the impact of rising inflation, higher outgoings and current low investment returns on their likely retirement pot,” she says. As well as working for longer, many are weighing up the extent to which they can afford helping adult children with cash gifts.

At a time where there are so many questions for our finances, I’ll be asking a few more this Saturday at the FT Weekend Festival in aid of FT Flic, the Financial Literacy and Inclusion Campaign.

We all need to get to grips with our finances, and boosting financial literacy is a goal we can all get behind.

Martin Wolf, our chief economics commentator, will be among those taking part in a personal finance quiz (if you are feeling flush, you can bid to have lunch with either of us in the Flic charity auction).

If you can’t join us for the festival at Kenwood House Gardens in north London on Saturday, fear not. I’ve devised this mini quiz for readers at home, and have two prizes from FT’s archive to inspire your budgeting endeavours.

The Financial Times egg cup was (we think) a gift for subscribers in the 1980s. Its pinstriped arms hold a copy of the FT from March 1988 with the Budget speech of former chancellor Nigel Lawson on the front page.

One of the most controversial in history, Lawson announced huge tax cuts (sound familiar?) which ultimately preceded a huge inflationary spiral — something to think about as you crack open your breakfast egg!

To stand a chance of winning one, please answer the following questions and tie breaker.

I will reveal the answers (and winners) in my next FT Money column on Saturday September 24. Yes, readers, despite my love of forward planning, I’m about to embark on the worst-timed holiday in history. But when I return, we will have a new prime minister, plus new energy help measures and potentially some tax policies to chew over together.

Claer Barrett is the FT’s consumer editor: claer.barrett@ft.com; Twitter @Claerb; Instagram @Claerb