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This article is for general guidance only and is not financial or professional advice. Any links are for your own information, and do not constitute any form of recommendation by Saga. You should not solely rely on this information to make any decisions, and consider seeking independent professional advice. All figures and information in this article are correct at the time of publishing, but laws, entitlements, tax treatments and allowances may change in the future.
In uncertain times, one of the most empowering steps you can take is to focus on what you can control – your own finances.
Global trade tensions and tariffs, stubbornly high inflation and rising food and energy prices can feel unsettling – especially if you’re on a fixed income or have retirement on the horizon.
Whilst you can’t control what happens to the economy, there are things you can do to protect your money. We’ll walk you through some of the best steps to take right now.
Volatile stock markets since the start of the year have affected many investments. Many pension funds hold significant stakes in US stocks, which means fluctuations across the Atlantic can directly affect the value of your retirement savings.
And if you’re approaching or in retirement, that can feel worrying. Brian Bené, chief customer officer at Octopus Money, says that after the age of 50, money stops being something you’re simply building up for ‘one day’. You’re moving from saving and investing to drawing an income that needs to last, possibly for decades.
“The questions now are bigger and more personal: When can I stop working? How do I take an income from my savings without running out? Can I still live the life I want, even with inflation and market ups and downs? Do I need to switch strategies?”
Whatever your age, it’s important not to panic over short-term market dips and to ensure any drawdown or annuity strategy aligns with your timeline.
Bené says: “There are many options for taking money out of your pension. These include drawdown, phased withdrawals or enhanced annuities, depending on your circumstances. Consider a check-in with a financial expert, which at this stage can make a huge difference.”
Start by looking at what’s coming in and what’s going out. Make sure essentials such as your mortgage or rent, food, energy and household bills are prioritised before discretionary spending such as holidays or hobbies.
If inflation is eating into your income, a refreshed budget can highlight where small cutbacks might free up cash to put towards savings or debt repayments.
Bené says a budget is your anchor when it comes to being a smart spender. If you’re still working, it helps you manage rising costs while protecting your savings. If you’re retired, it ensures you don’t overspend early and run out of money later. “Budgets aren’t static – prices change, rates shift and your goals evolve. A regular review keeps everything aligned with your life,” he adds.
Unexpected expenses, such as a boiler repair or private medical bills, are far easier to manage when you have savings set aside to fall back on – so build an emergency fund and keep this money in an easy-access savings account.
Clare Moffat, personal finance expert at Royal London, says it’s often believed that your emergency fund should cover three months’ of expenses. But the amount really depends on your circumstances.
If you are still working, you might have a mortgage so a larger fund could be needed, but you might also have insurance products which could pay out if you were unwell or couldn’t work. Some experts recommend that in retirement, you should have one to three years of expenses available, to cover unexpected emergencies such as house repairs.
Moffat adds: “If you’re retired, the amount you receive in pension will be less than you received from a salary, so covering unexpected expenses could be more difficult - but most people who are retired don’t have a mortgage. You could also have taken some tax-free cash and have that available to help with any large expenses.
“The key is to work out your day-to-day spending, allow for any potential and unexpected bills, and have the money to cover that easily accessible.”
When it comes to your investments, you may want to avoid over-concentration in any single asset type, whether that’s equities, bonds or property, to avoid putting all your eggs in one basket.
One way to diversify your portfolio is to look at funds that invest in a range of shares, bonds or other assets.
Another option could be money market funds – short-dated, low-risk investments designed to provide returns slightly higher than typical cash savings.
Helen Morrissey, retirement specialist at Hargreaves Lansdown, says it’s important not to take knee-jerk decisions that you may come to regret. “Switching investments can crystallise losses and rack up fees. You may be in a ‘lifestyle’ arrangement anyway, that moves you from equities into bonds the closer you get to retirement.”
It’s worth seeking advice from a financial adviser before making any major changes to your investment portfolio.
If you’re thinking about moving house, downsizing or remortgaging, take time to research the type of mortgage that best suits your circumstances.
A fixed-rate deal can provide stability by guaranteeing your monthly payments for a set period. Alternatively, a variable or tracker mortgage may appeal if you believe interest rates will fall further.
If you’re remortgaging, most lenders allow you to secure a new deal up to six months in advance. This can be a good way to hedge your bets – you can lock in a deal now, while leaving the option to switch to a better product if cheaper rates become available.
Inflation rose to 3.8% in the year to July, as measured by the Consumer Prices Index from the Office for National Statistics (ONS). The Bank of England has predicted that inflation will rise to around 4% in the next few months, and then start falling back towards its 2% target after that.
When prices for everyday goods and services are increasing faster than your savings rate, the real value of your money falls.
Kevin Brown, savings expert at Scottish Friendly, says: “Falling savings rates combined with high inflation mean cash is steadily being eroded. Savers may want to look to secure the best-paying accounts or consider long-term investments that have the potential to deliver stronger real returns.”
The UK energy price cap is due to rise in October. The average bill for gas and electricity when using direct debit is to rise by 2% – or £35 a year – to £1,755, energy watchdog Ofgem has announced. The current price cap is £1,720 a year.
Switching to a fixed rate tariff could save you money. Do this now, ahead of winter. The best deals currently available are nearly 15% less than the price cap, and with a guaranteed fixed rate for 12 months.
Analysts predict that the energy cap will fall slightly in January and rise again in April, although these predictions are uncertain. Use a whole-of-market comparison site to find the best deals.
Getting on top of your finances in uncertain times can feel daunting, but small, deliberate steps can make a positive difference. A financial health check helps you step back, look at the big picture and make a clear plan. It can give you confidence that you’re making the right decisions now – while protecting your future.
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