Five practical steps to Zen peace around your finances. Step Four: Review your specific ‘money pots’

If you haven’t read Richard Wadsworth’s earlier blogs about practical steps to achieving Zen around your finances, you can read Steps One, Two and Three which discuss the importance of understanding your current position, prioritising spending and defining a purpose for your resources.

Most of us build up a series of pensions and investments throughout our life, each of which makes sense at that point, but perhaps, over time, they can become a bit of a hotchpotch with no clear logic any more. It’s great that we’ve built up these investments and pensions, but could they now be improved? Are some past their ‘sell-by’ date? Do you still have that technology fund investment from 1999? If you have some privatisation or demutualisation shares, or shares in your employer’s company, would you, if you were starting afresh today, still buy these? If not, perhaps it’s time to tidy up – to borrow from the great tidying-up expert, Marie Kondo, which of your pots still ‘sparks joy’ and should be kept, and which should be transferred?

Staying in the spirit of Marie Kondo, I am inclined to simplify wherever I can, and it certainly applies to investments and pensions. While there can be good reasons to retain certain investments and pensions, and there can be costs or taxes that stop you moving things, my approach is to simplify where possible unless there are good reasons not to.

So dig out the statements for your old pensions and consider transferring them to your current arrangement. What about consolidating your ISAs into one? Could you move your investments under one administrator without increasing your costs and in so doing simplify your paperwork?

Suddenly, with all that tidying up, things look a little spacier, a little calmer, a little, well – more Zen.

Read about the final, fifth step in my next blog.

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Richard Wadsworth is a Director at Carbon and can be contacted at richard.wadsworth@carbonfinancial.co.uk

The value of investments and the income derived from them can fall as well as rise. You may not get back what you invest.

This communication is for general information only and is not intended to be individual advice. It represents our understanding of law and HM Revenue & Customs practice. You are recommended to seek competent professional advice before taking any action.

Tax and Estate Planning Services are not regulated by the Financial Conduct Authority.

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