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Have you Found all of Your Dormant Accounts?

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During the course of our lives we will move house and change jobs, life can be fairly hectic at times so it can be easy to lose track of some aspect of our financial affairs. It is possible to forget about bank accounts that we opened as children or teenagers, particularly if there was not a lot of money deposited in the account at the time. When a bank account or savings account is inactive for a period of time, financial institutions categorise the account as dormant. The amount of time it takes to be categorised as dormant varies from bank to bank. For some it will be a year, for others it will be 3 years of inactivity. The money in these dormant accounts still belongs to you so you should take steps to retrieve it. I recently became aware of a dormant savings account that I was using up until a few years ago.

Dormant Accounts

What Should you do Next?

If you have the account number and sort code, contact a branch of your bank or building society and explain that you want to re-open a dormant account. If you simply want to withdraw any funds from the account, explain that too. They will have their own procedures for reactivating a dormant account. In my case, I needed to present an accepted form of identification (passport or driver’s license) together with an up to date proof of address. When this was verified, the bank were happy to reunite me with my funds.

If you cannot remember the account details and do not have any old correspondence to help you visit http://www.mylostaccount.org.uk/ . The website will ask you to fill out an enquiry form and then will help you through the process of tracking down your dormant account or that of a deceased family member. Please be aware that the process could take up to three months.

Image credit: https://www.mylostaccount.org.uk/

If the dormant account that you are trying to find is a pension, rather than my lost account you should read this article which will help you find your pensions.

The Government Will Take Your Money

Following the introduction of the Dormant Bank and Building Society Accounts Act in 2008, Reclaim Fund Ltd (RFL), the government laid out plans to seize money left in in dormant accounts and untouched for 15 years. This moneywill then be re-directed to good causes across the UK, so far £360 million has been used in this way. If you want to decide for yourself how to spend your money, track down any dormant accounts that you have and reclaim your money.

Have you have success tracking down a dormant account? Let me know in the comments section below.

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Have you got the Right Money Mindset?

My aim with each blog post is to help you move to a better financial future. I believe that there is not enough financial education in the national curriculum and I intend to share anything helpful that I have learned along the way. I am by no means a financial expert. None of the information on this website constitutes financial advice and is provided as general information only. This is my personal finance blog; my marketing blog is over here and I have been blogging there since 2010. I hope you have found this information useful. Thank you for reading.

Best regards,

Mike

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Personal Finance: How Should You Prepare for Brexit?

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For those of you not living in the UK, Brexit is a word coined to mark the Great Britain’s intention to leave the European Union. This decision was the result of a national referendum in July 2016 in which the electorate voted to ‘Leave’ or ‘Remain.’ The United Kingdom was very divided; 52% voted in favour of leaving and 48% voted to remain. Those who voted to leave did so without any real understanding of the repercussions of such a decision; they were encouraged by politicians who were economical with the truth. Now in December 2018, UK inhabitants find themselves heading towards Brexit and what looks like a self-inflicted recession.

Businesses and consumers have been heavily impacted; consumers are not spending as much as they used to and business people lack of confidence about the future. Businesses are currently less likely to invest in new equipment or staff and according to the GFK consumer confidence Index the current score for the UK is – 13. To give that some context, in December 2015 the confidence index score was +2. Significantly 2015 was the first time the index had remained positive for an entire calendar year since records began in 1974.

Prepare For Brexit

From a personal finance perspective, how can you better prepare yourself for the reality of Brexit? Below I have listed 4 practical steps you can take that will help.

Revisit Your Budget

Take a look at your current monthly budget and re-evaluate all of your expenditure. If there are opportunities to cut back – take them. For example, a lot of people have unmetered water bills even though in many cases a metered water bill will work out cheaper; read this post for information, Water Bills: Are you Pouring Money Down the Plughole? There may be other opportunities for you to cutback.

Assess Your Employer & Job Stability

In financially challenging circumstances many companies suffer and some go into administration. In the UK, we have seen this with the demise of Maplin and Toy R Us.

The task for you is to dispassionately assess how well your employer is doing and how likely/unlikely it is that you be made redundant. Do not rely on any assurances from the management team at your company; do your own independent research. If you think that you could be made redundant save more money into your emergency fund.

Reduce Discretionary Expenditure

In personal finance circles, there is a lot of discussion around how much impact cutting out daily Lattes will have on the path toward better financial health. That’s a choice that you are best placed to make. However, what is sensible is to rein the dining out occasions and perhaps replace them with entertaining friends at home. Beyond entertaining, holidays are another area that you should review. Choosing a more cost effective destination or changing an international holiday to a UK based ‘staycation’ will give you greater financial comfort. Also, do not go overboard at Christmas.

Review All of Your Financial Products

Review all of your financial products including savings, mortgages, investments and pensions. Assess the impact on Brexit in each case and evaluate whether you should continue with your current provider. If appropriate, change to better performing products with other providers to maximise your returns.

How are you preparing financially for Brexit? Let me know in the comments section below.

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Best regards,

Mike

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Should you Combine Your Pensions?

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Over the course of your career, you are likely to move jobs and contribute to more than one pension. Keeping track of all your separate pensions and monitoring the relative performance can be a difficult task; there’s also the often complicated fees and charges to be taken into consideration too. It is no wonder that many working adults in the UK do not stay on top of their retirement planning in general and pensions in particular.

Your Pensions and Performance

When you have tracked down your pension pots, write to the pension providers and if necessary advise them of your new address. I add this point in because whenever I have lost track of a pension it is because pension providers have been sending the annual statements to an old address. You must notify them when you move house. Once your details have been verified, when you call your pension provider they will be able to give you a statement balance for your pension. Repeat this step for each of your pension pots. Ideally you will have the balance from previous years too. This will enable you to calculate which is your best performing pension.

Exit Charges

Once you have worked out which is your best performing pension it would be great if you could simply move all of your pensions into the best performing pension and go on to live happily ever after. Well, unfortunately it is not that simple, whilst most pension providers will usually let you add to an existing pension pot free of charge the same cannot be said ot exiting an existing pension plan. You are likely to face exit charges for exiting the pension plan early. Give your pension provider a call to find out the full extent of the charges that you will face if you exit the pension plan.

What Should You do?

After your research and phone calls, you will have a better understanding of whether it is a good idea to combine all of your pension pots into one. I cannot give a generic recommendation in this case. Please also consider the investment funds that your pensions are invested in on your behalf. You could have set them up with different risk profiles; keeping separate pension pots could be a smart way to diversify your pensions portfolio and reduce investment risk. At some point as you are evaluating your pensions and deciding what to do it would be sensible to consult an independent financial adviser.

Have you tracked down a lost pension pot recently ? Have you worked out which is the best performing pension? Let me know in the comments section below. There is no need to write any specific amounts!

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Best regards,

Mike

Follow me on Pinterest

Why you Should Track Your Net Worth

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I hope those you who did not already have a monthly household budget, have now had chance to create one. If not, this post will help you, How to Create a Budget That you can Stick to. One stage on from creating a monthly budget is to create another simple spreadsheet that records your total net worth.

Calculating Your Net Worth

Net Worth can be defined as the sum of all of your assets minus your liabilities. For many of you, the thought of creating a spreadsheet with all your assets and liabilities recorded in one place might fill you with dread. If you have large student loans or credit card debts, recording your total amount of liabilities and assets might be a painful process. However, this is a necessary step to track your net worth.

Your personal net worth looks at the bigger picture, it’s not just your monthly income and outgoings. You also get the opportunity to track all of your assets as well as your liabilities. Assets include properties, savings, investment accounts, stocks and shares and businesses owned where applicable; liabilities include, mortgages, student loans, credit card debts and loans.

For the sake of simplicity it is acceptable to leave out all regular monthly expenses that are paid out of your monthly salary or wage. When thinking about net worth I always remember a quote attributed to the mathematician, Karl Pearson.

“That which is measured improves. That which is measured and reported improves exponentially.”

Karl Pearson

Improvements to Your Net Worth

This is exactly why we are doing this! Your net worth will improve. When you complete your first total net worth tracker spreadsheet, it will take some time. By the way, feel free to think of a more exciting title than Total Net Worth Tracker Spreadsheet. 🙂

When you come to update it after a month, unless you have suffered some financial calamity, your total net worth will have increased. For example, if you have made payments to student loans and or credit cards, their totals will come down slightly and your net worth will have gone up. If you are like me, you will find this incredibly motivating! As an aside, do not compare yourself to others, just track your own progress. In time, deficits will turn into surpluses. Money that was originally to pay debts can be diverted into savings accounts when those debts have been paid. Tracking your net worth is an excellent habit and will help you to transform your finances.