KEVIN Simpson of financial advisors Blue Trust answers some commonly asked financial questions.
Q How often should couples review there finances
A Think about having regular financial checkups with your IFA every 12 to 18 months. A lot of time people are so busy that life changes around them and it’s assumed that the other person is on the same page. But as each year goes by your financial goals can change. Reviewing them is an ongoing process which needs to be worked on continuously
Q What is meant by the term the “real return”? on an investment?
A That’s a great question and one that is sometimes overlooked when people see headline rates in Bank and Building Society windows trying to entice people in. This is the return achieved by an investment after taking into account the effect of inflation . So, for example, if the investment return is five per cent but inflation is four per cent you’ve only made a one per cent return, also ensure that you take into account the tax situation within the investment as this can make a difference in the real rate of return.
Q We need a £60,000 mortgage to be repaid over ten years. Would you recommend a repayment or an interest-only loan, backed by saving in Isas?
A If your need is to have this mortgage loan paid off in 10 years time a repayment mortgage is the obvious way to go. No one knows what the markets will do over the next ten years and if you are not prepared to gamble then do not go down the ISA route. ISAs may be tax efficient way to save but they will not give you a guarantee of return due to the investment on the stock market.
These questions were answered by St Helens Based Independent Financial Adviser Kevin Simpson of Bluetrust Ltd (Tel 01744 752209).