My theme for this year’s articles is realism. In past periods of austerity we have tended to take greater care of our property and assets;  people have mended their shoes rather than buying new, had their clothes mended and cleaned rather than buy new. They have made the most of what they already had  and it should be the same with investments.

I recently had a meeting with a client when he said “he now realised why independent financial advice was different”… the reason was that I was telling him NOT to invest more into his pension arrangement, no one had ever said that to him before because they had always been trying to sell him a product rather than give him advice. His family circumstances were such that he could not afford to put any more into his pension and I showed him that it was unlikely that he would be able to save more for some considerable time. The key element to the advice was that he continued making the contributions at a level he could afford and that he kept the situation under regular review in particular the performance of the funds he was using.

In the current economic environment, there are many people of working age who will not be able to afford to increase contributions to savings schemes or pension arrangements, this is a reality but working within this reality, it is even more important to squeeze every last drop of performance out of the existing investments and keep costs to a minimum.

In periods of austerity it is very important to take care or protect that which we do have, so at this time I would recommend checking your insurance policies to make sure that your house, contents, car and liabilities are all comprehensively covered. It is worth an increased premium to give you the comfort that if there was a catastrophe you and your family could recover quickly.

This is also a time to check your personal life  and income protection cover. If you have dependants you should check to make sure that there is sufficient life assurance in place so that on your death your mortgage would be paid off . Your family will appreciate a mortgage free roof over their heads. An additional lump sum to help them through the period of bereavement could also be a tremendous help particularly at a time when finding employment is difficult.

This does not have to be an expensive exercise just think about some additional cover for say the next 5 years while the economic situation may be dire. £100,000 of cover for 5 years for a man aged 40 next birthday is a mere £7.12 per month. If you are a parent or grandparent you may like to consider paying a premium of this level to make sure that your family is protected in the event of a family catastrophe such as the death of the main breadwinner.