Halloween is just around the corner, and little goblins and ghosts are preparing to creep to your door for “trick or treat” fun.
Whether you love all things scary or prefer to switch on all the lights and crank up the volume on the TV, here are three frightening financial mistakes that you’d be wise not to ignore.
1. Don’t let inertia stop you earning higher interest on your savings
Since the end of 2021, the Bank of England (BoE) base rate has increased from 0.25% to 5%. In August 2024, the rate reached a high of 5.25% – a level last seen in February 2008.
Though the high only remained for a month before dropping back to 5%, if you haven’t checked to see what interest rate your bank is currently paying, you may be missing out on a valuable opportunity to grow your savings.
According to a report from MoneyAge, despite the increasing savings rate, that many banks and building societies have passed on to their customers, 43% of savers failed to move cash to accounts paying higher rates. 30% of savers said they simply didn’t get round to moving their money, despite rising rates[1].
If you have savings and haven’t checked the interest rate on your account, find out what the rate is, and see if you could profit from a higher rate elsewhere.
The MoneyFacts website shows that, as of 9 October, the interest rate on an easy access account with Ulster Bank is 5.20%[2].
2. Failing to pay yourself first
Warren Buffett, one of the most successful investors of our time, said: “Do not save what is left after spending, but spend what is left after saving.”
Paying yourself first and investing for your future may require a fundamental change of mindset. In the same way you pay your mortgage each month, pay off your credit card, and pay for your car, you need to save towards your future too.
If you already have an adequate cash emergency fund, prioritise paying money into savings or direct it towards your pension or other investments.
Should funds be limited, start small. Even directing £50 to a Stocks and Shares ISA is a step in the right direction. Saving a small amount each month, regular as clockwork, can help you build your wealth. And the sooner you start, the sooner you’ll begin to benefit from potential compound growth.
3. Not making the most of your workplace pension
Auto-enrolment means it’s easier than ever to contribute to a workplace pension. In 2024/25, the minimum auto-enrolment contribution is 8% – 5% paid by you and 3% paid by your employer.
While auto-enrolment has helped to encourage employees to actively save for their retirement, the Institute for Fiscal Studies (IFS) report that 1 in 5 workers don’t save into their workplace pension. And up to 7 million people are unlikely to have adequate income in retirement[3].
While opting out of auto-enrolment may allow you to save money in the short term, you’re effectively passing up “free” money. Over the longer term, missing out on pension tax relief and regular contributions from your employer could have serious consequences.
Rather than opting out, consider budgeting elsewhere. You might even find that if you increase your contribution, your employer is willing to increase their percentage too.
Get in touch
If you’re looking for support in finding the best ways to save and plan for the future you desire, please get in touch.
Email info.wp@titanwh.com or call us on 0800 048 0150.
Please note
The information contained in this article is based on the opinion of Titan Wealth Planning and does not constitute financial advice or a recommendation for any investment or retirement strategy.
A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Past performance is not a reliable indicator of future performance.
The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates, and tax legislation may change in subsequent Finance Acts.
Workplace pensions are regulated by The Pension Regulator.
The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.
Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.
[1] https://moneyage.co.uk/Over-two-in-five-savers-havent-moved-accounts-in-last-36-months.php
[2] https://moneyfactscompare.co.uk/savings-accounts/easy-access-savings-accounts/
[3] https://ifs.org.uk/news/reforms-needed-millions-employees-track-inadequate-retirement-incomes