As another year passes, and most business owners review their hopes, fears and budgets for the next 12 months, their thoughts inevitably turn to their personal finances.
In particular, the need to put sufficient aside in pension premiums (given the dire warnings from successive governments that we simply aren’t saving enough for our retirement) and life assurance policies.
Martin Tickner of Tenterden-based Financial Choices recently gave an eye-opening presentation to fellow Wealden Business Group members about the perils of putting your savings into a heavily-advertised policy without first seeing if you can earn a better return elsewhere.
Quoting a recent investigation by the Sunday Telegraph, he confirmed what IFAs have known for a long time – that customers buying policies from banks, building societies or retail providers such as Tesco might be spending far more than they need to.
The report cited the case of a £250,000 Aviva Life level-term life assurance policy for a 40-year-old male non-smoker.
If he’d gone to his IFA, the policy would have cost as little as £23.08 a month.
Tesco Bank sold a re-branded product for £29.85, while – astonishingly – the 40-year-old smoker would have paid £35.30 if he went direct to Aviva, a hike in premiums of almost £3,500 over the policy term.
But the Tesco and Aviva markups looked positively puny compared to an even starker case, where monthly premiums for a Legal & General level term life and critical illness policy ranged from £90.36 a month up to £120.55, quoted by the Yorkshire Building Society.
Martin’s advice was therefore simple: let an IFA do the shopping around for you, so the savings you make on your pension and insurance premiums benefit you at the end of the day, and not the provider.
You can contact Martin Tickner of Financial Choices either by phone (01580 766400) or email [email protected]