Although recent newspaper headlines, with talk of recession and financial hardship are enough to make you despair, at Continuum we believe in taking a positive view – and that that there are actually some financial developments to be cheerful about.
With some expert help, a prosperous new year could still be on the cards.
Inflation – the end could be in sight
Inflation is already falling from the 11% highs, and both the Office for Budget Responsibility (OBR) and the Bank of England expect CPI inflation to be falling sharply by the middle of next year. The OBR is even suggesting that it will fall below zero from mid-2024.
Inflation means your cash will buy less – so it may be time to look at your investments and pension plans, to ensure they still provide the kind of lifestyle you need in retirement.
At Continuum we can arrange a pension forecast to show how large your current pot could be and ways to potentially boost it.
House prices may be stabilising
Mortgage rates have fallen from the highs seen after the disastrous mini-budget, but still look high by the standards of the past five years at 5.99% for the average two-year fix. These higher rates and worries about financial security are having a chilling effect on the property market.
People can no longer afford to pay an inflated price for their home. There have been real fears of a house price collapse.
It has not happened so far. Despite some recent month-on-month falls, asking prices for homes across the UK are still higher than this time last year. Your home is still an appreciating asset.
What’s more, these price changes should be seen as a correction in the market, one which makes it easier for people to buy the home they need.
Purchase prices aside, mortgages have become more costly, making it more important than ever to get the most appropriate deal for your house purchase or remortgage.
At Continuum we can help find the mortgage deal that is best for you, searching the entire lending market to save you money.
Saving may be worthwhile again
Low interest rates have come to an end as the Bank of England attempts to rein in inflation.
At one point last year there was a general belief that the Bank Base Rate may have to go as high as 5.5% or even 6%. Since then, expectations have been downgraded and some observers suggest the peak may be 4% by the middle of 2023.
Certainly, borrowing has become more expensive. But this has a real silver lining in that saving is starting to look more worthwhile, with interest on savings accounts shooting up.
Banks and building societies may actually start to compete for your money again.
At Continuum we keep a constant eye on the rates offered by all the savings providers. A call to us could help you find an account that makes your money work harder.
So what happens now?
The UK seems to have entered a recession, and opinions vary on how deep and sustained that recession might be.
The past few years have shown that financial predictions are never quite as reliable as those who make them would like you to think.
Recessions can be painful, but there is some comfort in remembering that any fall in the value of the pound will actually have a positive side. Export growth will be supported and a rise in UK exports in 2023 by 4.6% and by 1.1% in 2024 has already been predicted.
At Continuum we have a prediction of our own – that taking a fresh look at your financial plans could help you enjoy a more positive outlook.
The simplest way to get expert help with that is of course to call us at Continuum.
Making 2023 a prosperous new year could start with a call to us.
The information contained in this article is based on the opinion of Continuum and does not constitute financial advice or a recommendation to suitable mortgage products or investment strategy, you should seek independent financial advice before embarking on any course of action.
The value of investments and pensions can fall as well as rise and you may get back less than you invested.
The Financial Conduct Authority does not regulate deposit accounts.
Your home may be repossessed if you do not keep up repayments if you do not keep up repayments on your mortgage.