It is understandable to be worried about your finances. The world seems to be lurching from\u00a0one political crisis to the next, and each one has an impact on stock markets and prices.<\/p>\n
A recent survey found UK consumers are worried<\/a> about a slowing economy, possible tax increases in the next budget and rising food costs. We asked experts how you should manage your money in an uncertain world.<\/p>\n Investments<\/strong><\/p>\n Stock markets around the world, especially in the US, were in flux earlier this year over Donald Trump\u2019s tariff plans. Things have settled down now but it is impossible to predict\u00a0what shocks may be around the corner.<\/p>\n If you hold stocks and shares \u2013 in an Isa or pension, perhaps \u2013 you may have been nervously checking their value. UK fund managers have been increasing their holdings in US companies<\/a> over recent years, largely fuelled by the boom in tech stocks, so big moves over there have an impact here.<\/p>\n However, experts say the most important thing to do is to not sell up out of panic. The analyst Dan Coatsworth of the financial advisers AJ Bell says: \u201cThe worst thing people can do is to see troubling things in the news and then suddenly try to shift around their portfolio.\u201d Markets have recovered in the past, he says, so patience is key.<\/p>\n Gold has tripled in price over the past decade. Photograph: Denys Rudyi\/Alamy<\/p>\n Where this advice may differ is if you need your money for something in less than five years \u2013 such as a wedding, university fees or a house purchase. Then you should look at how much risk you are taking, he says.<\/p>\n Andrew Oxlade, an investment director at the fund management company Fidelity International, says this could mean switching some of your money away from the markets and into bonds. Bonds are issued by a corporation or country \u2013 the investor loans it money in exchange for a fixed rate of interest.<\/p>\n They are typically bought through a fund. Many investment management companies offer funds that have a split between equities and bonds, such as Vanguard\u2019s Lifestrategy 80%.<\/p>\n Gold, an investment that is often seen as a safe bet during times\u00a0of crisis, has tripled in price over the past decade, and many investors now hold a small amount in their portfolios, Oxlade says, after years of poor performance. Investing does not have to mean buying bars or coins \u2013 Fidelity says the most direct way for most is through an exchange traded fund that tracks the price of gold.<\/p>\n Mortgages<\/strong><\/p>\n Interest rates in the UK can be affected by what goes on globally. The Bank of England is tasked with\u00a0keeping inflation down. Before the war in Ukraine started<\/a>, it had begun to put up rates, and as prices increased, it continued, raising them from 0.25% at the start of 2022 to 5.25% by August 2023, before holding them there for another year.<\/p>\n The Bank has been reducing rates and is expected to make more cuts later this year, but the question is when. If you are planning to take out a new mortgage \u2013 either to buy a home or as a remortgage \u2013 you face a decision about whether to fix for the short or long term, choose a tracker or even to go on a bank\u2019s standard variable rate (SVR).<\/p>\n Currently, the best-priced two- and five-year fixed deals have a rate of just below 4%.<\/p>\n Nick Mendes of the brokers John Charcol says lenders are reducing rates at present largely because of falling swap rates, a key factor in how mortgages are priced. Swap rates reflect what the money markets expect to happen to interest rates in future.<\/p>\n \u201cFixed mortgage rates are more influenced by swap rates than the base rate itself, which means they are shaped by what markets think might happen in the future rather than what is happening today,\u201d he\u00a0says.<\/p>\n If you want to take out a mortgage you face a decision about whether to fix for the short or long term, choose a tracker or go on a bank\u2019s SVR. Photograph: Ian Nolan\/Getty Images\/Image Source<\/p>\n Going on to a lender\u2019s SVR in the hope that fixed rates will improve later in the year is a risky strategy as the rates are high, at about 6.5%, and can change at any\u00a0time\u00a0and increase your monthly repayments.<\/p>\n Tracker mortgages are also worth considering, Mendes says. These are linked to the Bank base rate. \u201cThey tend to start lower than SVRs and often come without early repayment charges, which means borrowers can move on to a fixed deal later,\u201d he says.<\/p>\n Mendes says people who are remortgaging should not \u201csit back and wait. Most lenders allow you to secure a new deal up to six months in advance, which is a smart way to hedge your bets,\u201d he says. \u201cYou can lock in a deal now as a safety net and still switch to something better if rates improve before the new deal begins.\u201d<\/p>\n For new buyers, Mendes says they should base decisions on what is affordable now rather than making assumptions about what may or may not happen in the future. \u201cThe last position anyone wants to be in is having overstretched themselves on the assumption that they will be able to refinance on to something cheaper at the end of their fixed-rate period,\u201d he adds.<\/p>\n You are not tied to a rate until completion, so you should be able to switch if a better deal comes along.<\/p>\n Savings<\/strong><\/p>\n Savings rates could fall even before the Bank reduces the base rate, says Rachel Springall of the financial information site Moneyfacts, as account providers may decide that they have enough deposits for a certain product. \u201cIf the whole market starts moving in one direction, you\u2019ll find that other peers will do the same because they don\u2019t want to put themselves too high up [in best buy tables],\u201d she says.<\/p>\n Until then, easy access and fixed-term rates are competitive, Springall says.<\/p>\n If you have money in a variable-rate account it may be a good time to fix<\/p><\/blockquote>\n The best rates this week for fixed one-year and two-year bonds are from Cynergy Bank (4.55% for the one-year and 4.45% for the two-year), while an easy access account\u00a0from Chase offers 5%, although this includes a 12-month bonus and is a variable rate, so it could go down.<\/p>\n There have been increases in the interest paid on fixed-rate bonds in recent weeks, she says.<\/p>\n Anna Bowes of the financial advisers The Private Office says \u201cnow is a really good time for a saver who has not been paying attention to their savings\u201d as there is good competition in the market.<\/p>\n If you have money in a variable-rate account it may be a good time to move it to a fixed rate.<\/p>\n Pensions<\/strong><\/p>\n The tumultuous times that stock markets have been having since the start of the year will have had a direct effect on many people in the UK through their pensions. Often funds are heavily invested in US stocks<\/a>, so the ups and downs there\u00a0could be affecting your retirement saving.<\/p>\n It is understandable if you are considering shifting money in your pension into other safer options such as bonds, says Helen Morrissey, the head of retirement analysis at the financial advice company Hargreaves Lansdown. However, unless you are cashing in your pension within the next five years, you should avoid reactions based on the international turmoil, she says.<\/p>\n The tumultuous times that stock markets have been having this year will affect many people in the UK through their pensions. Photograph: Alamy\/PA<\/p>\n \u201cOver the course of your saving journey, you will hit several periods of market volatility and it\u2019s important to keep in mind that markets do recover over time,\u201d she says. \u201cMaking kneejerk reactions such as changing investment strategy has the potential to lock in losses as you miss out when markets do recover.\u201d<\/p>\n Workplace pensions are often invested in \u201clifestyling\u201d funds, which reduce the amount of risk as the holder gets older by shifting from equities to bonds. So if you are approaching retirement this may be happening automatically.<\/p>\n If your fund has been hit by turbulence in the markets and you intend on retiring soon, Morrissey says that you may want to start to take a lower amount out from your\u00a0fund than you had planned in order to allow the rest to recover from any losses caused by market turbulence.<\/p>\n \u201cWe suggest that people in [income] drawdown keep between one and three years\u2019 worth of essential expenditure [from their savings] in an easy access account that they can use to supplement their income during times of turbulence,\u201d she adds.<\/p>\n Another option, on retirement, is to invest some or all of your fund in an annuity, where returns are close to all-time highs. Annuities convert a lump sum from your pension into a regular guaranteed income for the rest of your life or a fixed term. A healthy 65-year-old can now get an annuity rate of 7.72% on average, according to the pension provider Standard Life \u2013 that means that for every \u00a3100,000 invested, they would get an annual income of \u00a37,720.<\/p>\n Energy bills<\/strong><\/p>\n About 21 million households will see their bills decrease after the price cap was reduced<\/a> this week. For a household with typical usage, the cap has dropped by \u00a3129, to \u00a31,720 a year. The good news may not last too long, however, as there are predictions of increases in October.<\/p>\n