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Take time out to secure your financial future; Alok Dhanda of Dhanda Financial explains the importance of having a financial check up in this festive period and explains how to make 2010 a healthy financial year.

AS we enter the festive season and prepare to leave 2009 behind, now is the perfect time to run an MOT check on your personal finances.

Too many of us in the UK view discussions about death or critical illness as being something of a taboo subject, but you shouldn't put off thinking about financial planning for these worst case scenarios - it is imperative that you have adequate life cover, critical illness cover and income protection in place for the coming year.

For instance, the wintry conditions are upon us now, with icy roads and dark nights, but have you given thought to what would happen to your family or business if you were involved in a car accident? Take Princess Diana for example. Nobody would have expected her to die so young, and her estate had to pay millions to the government in inheritance tax when she was tragically killed.

Similarly, TV star Jade Goody's death at the age of only 27 shocked the nation, but she was lucky to be able to leave a comfortable sum of money to her family. Who can say how many other young mothers like her in the UK are suffering from a similar condition and yet have no cover in place? 2009 has been a difficult year of doom and gloom due to the effects of the recession, but think of how much worse it would be if your family experienced illness or death without being financially prepared. Unfortunately, a hearse is not a rehearsal. At funerals, families want to remember their loved ones, rather than worry about whether or not sufficient life cover is in place.

An independent financial adviser can help you build a comprehensive financial portfolio that will see you, your family or your business through any unforeseen changes in your circumstances.

This will minimise the risk of having to uproot your family and downsize due to financial difficulties, and would ease the pressure of loans and debts during an already difficult time.

Just as you would go for a six-month check up to your dentist, it is equally important to fill any financial cavities that might be surfacing towards the end of the year. For example, as we are coping with an ageing population, with people growing older and living longer, it is worrying that many of us are not yet saving for our retirement.

The age of eligibility for a state pension is set to rise in coming years, so it is more important than ever to build a healthy pension pot for retirement.

Moreover, the UK's interest rates are low at the moment, so time is of the essence. Why not use this period, whilst you are paying less into your mortgage, to take advantage of these low rates and rearrange your finances? Make arrangements to save your surplus funds as part of a sensible financial plan.

Winston Churchill famously said: "If I had my way, I would write the word 'insure' upon the door of every cottage and upon the blotting book of every public man, because I am convinced, for sacrifices so small, families and estates can be protected against catastrophes that would otherwise smash them up forever." Take his advice this Christmas. See an independent financial adviser who will help you to work out a sensible portfolio and make sure 2010 is a healthy and wealthy financial year for you.

For further information on how Alok can help you with your personal or business planning needs, contact Dhanda Financial, 52 Dean Street, Newcastle upon Tyne, NE1 1PG, telephone 0191 255 8960, email alok@dhandafinancial.com or visit www.dhandafinancial.com.

Q&A Your money queries are answered by Peter Rutherford, Senior Director of Rutherford Wilkinson Ltd, chartered financial planners.

QI CURRENTLY invest in the Jupiter Financial Opportunities Fund, which has performed well for me. Jupiter has offered me two new funds that I can switch my money into if I wish. What is your recommendation? ATHE two funds that are on offer are the Absolute Return Fund and International Financial Opportunities Fund. There is no way of knowing if they will perform better than your existing fund. One thing that we do know is that they are potentially more expensive in that the fund manager will also receive a performance fee as well as the normal management charge.

In addition both funds will use derivatives to try and enhance returns. This does not guarantee success and may also increase the costs. My preference would be to sit tight and wait and see how these funds perform.

QI HAVE just received my annual statement from my stakeholder pension provider and the fund value in the last year has risen by less than I have made in contributions. Should I continue to invest or look to do something else with my money? AThere is rarely a right and wrong answer to this and I would really need to understand your circumstances in much more detail before giving definitive advice. However, as we all know, it has been a very difficult investment market over the last two years or so. One of the advantages of feeding money in on a regular basis is that you are buying units of investment at various different prices and as prices fall you buy more of them for each pound you are investing. Eventually the markets should rise and because you own more of the units you have a bigger fund value ultimately. My general advice would be to continue as you are.

QI AM 50 now and am considering taking the benefits from my superannuation scheme from my old employer. I want to do this as I understand I will not be able to do it after April until I am much older. Is this a good idea? ACurrently anyone can take pension benefits from age 50, but this rises to 55 with effect in the new financial year which starts on April 6 2010. So you are correct that if you do not do it now you will have to wait for some years.

However, I would strongly urge caution as you will have to remember that the pension fund would pay you out a much lower income for taking it early than if you wait until a later date. To request a free Investor's Guide and with any questions you would like answered contact me at Rutherford Wilkinson Ltd, Northumbria House, 21/23 Brenkley Way, Blezard Business Park, Newcastle upon Tyne, NE13 6DS. Website www.rwpfg.co.uk. Telephone 0191 217 3340 or email peter.rutherford@rwpfg.co.uk Rutherford Wilkinson Ltd is authorised and regulated by the Financial Services Authority.

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SECURE YOUR FINANCES Alok Dhanda offers his advice.
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Title Annotation:Features
Publication:The Journal (Newcastle, England)
Date:Dec 5, 2009
Words:1124
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