UK Trends That Could Influence Your Financial Future



The more control you have over your finances, the better chance you have of coming out on top. But with so many outside influences shaping financial outcomes, it can be difficult staying on course. Fortunately, financial advisers and experts are busy studying trends, passing-on their informed observations.

Following months of uncertainty, fueled in part by Brexit and the general global economic climate, Britons are poised for a successful new year, wondering what it will bring to their financial lives. Although it’s hard to predict the future, some of the possibilities are outlined below.

Where Are Your Finances Headed?

A complex stew of economic and social influences impacts financial prosperity and security. Whether global or local, these pressures ultimate shape your best approach to money management. With your closely held personal financial goals and values in mind, it’s important to stay informed, furnishing opportunities to adjust your financial approach for maximum benefit. According to a recent article, the following financial matters could be at the forefront during the coming months.

Pensions

Britons are working longer than they once did and valuable pensions aren’t as widespread as they were in the past. The reality for younger workers is an uncertain future, without the same financial guarantees their parents enjoyed. Fortunately for young people and earners at the low end of the income spectrum, moves are being made toward pension reform, which may provide greater security in the future.

Reducing the age of auto-enrollment to 18 represents one of the recent changes made to bolster the pension system. And there are efforts underway to shore-up pension possibilities for self-employed Britons, helping them set aside money for retirement, at the most sensible points in their individual earnings cycles.

Further positive reforms are expected, as pension issues remain important to leaders across the political spectrum. Conservatives are committed to placing more power in the hands of consumers, supporting their access to efficient wealth-building opportunities. And the Liberal Democrats view property assets as an increasingly important part of retirement planning, potentially opening doors to pension reform that would help pensioners make the most of their equity.

House Prices

Owning a house remains an important financial goal for UK families. Despite prevailing low mortgage rates, recent years have presented obstacles for would-be buyers. At the same time, with house prices holding high in most regions, current owners have benefitted from the perception their house investments are doing well. Following the price run-up, what can UK residents expect from property markets during the months ahead?

An interest bump by the Bank of England, the first of its kind in a decade, isn’t likely to send house prices on a downward spiral, but growth in house values is likely to be more modest in the coming months. With changes to the Stamp Duty and mortgage rates that are still affordable, momentum for first-time buyers should continue, building on a trend in the right direction. It is thought first-timers accounted for 150,000 of the property buyers closing deals in 2017. Government efforts to build more housing, perhaps hundreds of thousands of units by 2020, should help balance supply and demand and stabilise the house market moving forward.

Earnings

Tracking trends shows a number of positive economic developments since the financial crisis – both globally and at home. UK incomes, however, remain stagnant, leaving Britons with less money to spend, in real terms. Though unemployment is historically low, inflation has undercut spending power for families – a trend that may not let up in 2018.

As the pinch wears on, consumer confidence has tracked downward, leaving the population pessimistic about their future financial prospects. Interestingly, while those over thirty-five anticipate having less money left over after twelve months’ time, half of UK workers between the ages of eighteen and twenty-four are more optimistic, believing after their bills are paid this year, they’ll be left with more extra money than last year.

Debt and Spending

Following a period of growth led by consumption, slowdowns are expected, resulting from some households’ growing debt load. There are still plenty of borrowing options available to consumers – even without formal credit checks. But pessimism about British economics and rising debt balances are likely to curb what has been an extended spending rally.

As the year unfolds, look for cautious consumers to roll-back some of their discretionary spending, in favor of finding better financial balance at home.

Accurately predicting economic outcomes is a tentative prospect, but studying trends yields clues about what the future might hold. A close look at current UK momentum suggests a mixed bag for the coming year. For help making informed financial decisions, pay attention to pension, property, earnings, and spending trends.

Paul graduated in 2001 with a degree in Finance. Since then he has gone on to work for several of the UK's most well-known financial institutions.

An avid blogger and a huge football fan, Paul is here to guide you through the ins and outs of personal finance and perhaps save you some money in the process!

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