5 scary financial mistakes to avoid this Halloween

Posted on

According to The Grocer, Brits spent an eye-watering £431 million on Halloween in 2019. From costumes to pumpkins, the spooky season has become big business, with chocolate and sweet sales alone topping £59 million during last year’s celebrations.

While Halloween might look different in 2020 – social distanced trick or treating? – it’s still a fun season for adults and children alike. So, while the youngsters are evading ghosts and ghouls, here are five scary financial mistakes you should be trying to avoid this 31st October.

1. Keeping too much of your money in cash

In turbulent times, people often retreat to the ‘safe haven’ of holding their assets in cash. While it may mean there is little to no risk to your capital, there is a strong chance that inflation will erode the value of your savings.

A recent report from financial analysts Moneyfacts found that, between March and September 2020, the average easy access savings rate in the UK fell from 0.57% to 0.23%. That’s an annual return of just £115 for a £100,000 investment. Since inflation is currently low, it’s unlikely that your return from cash will keep pace with rises in the cost of living.

Here’s some data from the last 20 years that compares the returns from cash, time deposits, and shares.

Source: HL

Since January 1999, returns for savers in the average easy access account have failed to keep up with inflation. Fixed-term savings accounts have fared better as, between January 1999 and June 2020, £100 grew to £194, or £128 after inflation.

In contrast, over the same period, the stock market turned £100 into £432 before costs. This works out to £284 after inflation. This is despite some volatile periods, including the 2008 global financial crisis.

If you’re prepared to invest for the medium or long term, stocks and shares could help you avoid the scary prospect of your money not growing in line with inflation. It could give you a better chance of outperforming inflation and meeting your financial goals.

Remember that the value of your investment can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.

2. Not maximising your pension contributions

Pensions are one of the best ways to save for your future. The most immediate benefit is that the tax relief gives you an instant boost to your investment. As a basic rate taxpayer:

  • £1,000 invested into a pension costs you £800
  • £1,000 invested into an ISA costs you £1,000

If you’re a higher or additional rate taxpayer then the tax benefits are even more pronounced.

A recent study by Scottish Widows also suggests that if you were to consider your pension as an ‘investment’, you might be tempted to save even more.

Maximising the amount that you invest can help you to achieve the lifestyle you want later in life. Your future self will thank you!

3. Having insufficient protection

In recent months, we’ve all been affected by upsetting and moving stories about families losing loved ones, and individuals struggling with long-term ill-health. The news may have led you to think about your own circumstances, and how those nearest to you would cope if something happened to you.

Putting the right protection in place gives you the peace of mind that your loved ones will be provided for if the worst happens. From a tax-free lump sum if you’re diagnosed with a serious illness, to setting up a Power of Attorney so a trusted person can manage your affairs if you can’t, it’s vital you make plans.

We’ve previously looked at how giving up a couple of lattes a week could buy you more than £50,500 of life or Critical Illness cover. Now is a great time to review your arrangements.

4. Taking too much from your pension

In the modern world, it’s likely that your pension may have to last you 20, 30 or even 40 years. As life expectancy increases, and flexible retirement becomes more popular, it’s never been more important to regularly review your finances to ensure you don’t run out of money later in life.

One of the most common reasons for retirees to run out of cash is that they withdraw too much from their pension in the early years.

Recently, research from pensions consultancy LCP has found that retirees who follow the ‘golden rule’ of withdrawing 4% from their pension pot each year are three times more likely to run out of money early than they were ten years ago.

The rule of 4% is ‘broken’ and ‘outdated’ in today’s low-interest-rate world, says the study, with author Dan Mikulskis claiming that ‘3% is the new 4%’.

Managing your withdrawals is critical if you want to ensure your income remains sustainable in later life – and taking advice at this stage can also help.

Research from Moneyfacts has found non-advised drawdown clients are three times more likely to run out of money compared to advised clients. This brings us to…

5. Going it alone

One of the scariest mistakes you can make with your money is to manage it without professional help. There are countless reasons that working with a financial planner can add genuine value:

  • It can give you peace of mind, make you more confident, and can make you feel more in control. Read more about a recent study which demonstrates this
  • Research carried out by the International Longevity Centre in 2017, and subsequently updated in 2019, has suggested that the value of financial advice could equate to £47,000 in additional wealth over the course of a decade
  • Research from VouchedFor in 2020 found advised investors generate 27% higher returns over 12 months compared to those that choose to take a DIY approach.

Get in touch

If you’d like to get your finances in order, working with a financial planner can add tangible value.

Find out what we can do for you. Email enquiries@blackswanfp.co.uk or contact your adviser on 020 3828 8100.

Please note

A pension is a long-term investment. The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Your pension income could also be affected by the interest rates at the time you take your benefits. The tax implications of pension withdrawals will be based on your individual circumstances, tax legislation and regulation which are subject to change in the future.


We aim to keep our clients up to date on interesting and relevant financial news.

You can sign-up to receive our monthly newsletter by email, even if you’re not yet a client. Sign-up using the form below.

Client testimonials

I have always found Black Swan to be caring and understanding of my quirky lifestyle. I always feel they try to get me the best returns while respecting my current needs.

Sally Muir

A client since 2011

We would be very happy to recommend the support and service we receive.

Valerie Locks

A client since 2010

I have always been completely useless regarding finance - thankfully our financial adviser is not! I've retired with far more than I ever expected and investments continue to grow safely. So - thank you!

Bernadette Jane Warner

A client since 2000

Very happy with the professional service I have received and feel a lot happier now with my finances put in order.

Martin Field

A client since 2011

Julie Cooper was recommended to me by a work colleague. She has been very helpful, professional and has explained everything well. I would definitely recommend her services to anyone else who are interested in a financial review.

Steven Rooke

A client since 2018

…Service has been first class.

Hugh Fells

A client since 2012

My face to face meetings with Rob Young and Jessica Lyons have always been very open and understandable. My questions have been answered clearly and I have left feeling that my financial matters are in good hands.

Sandra Jack

A client since 2000

[A] safe pair of hands in a complex financial world.

Gary Middlehurst

A client since 2003

A reliable company with good communication skills and good knowledge of the financial markets.

Alan Evetts

A client since 2014

Maureen Pembridge is a long-time trusted advisor to our family. The market might fluctuate but her attention to detail is consistent.

Linda Burnard

A client since 2000

I am pleased to recommend Julie as a trustworthy financial advisor. She explains financial jargon in plain language, and always listens carefully to my particular financial needs and has helped me make the best of my savings.

Carolann Samuels

A client since 2010

I have always been satisfied with the way that Black Swan has handled my account. And I have always found the staff very helpful whenever I need to call the office.

Robert Anthony Matthews

A client since 2012

An excellent personal service from a person I know and trust.

Michael Dalton

A client since 2010

I am getting a very good services from Black Swan, they have got my investments sorted out which was in a bit of a mess.

Roy Jakens

A client since 2012

A good, efficient team providing clear ideas to shape a winning strategy.

Adrian Michael Levenstein

A client since 2011

Black Swan is a company to be trusted, with friendly staff and professional advisors.

David Brian Jennings

A client since 2017

I have been with Black Swan for many years. I have never wished to change anything. They give a good straight forward service.

Martin Barrett Brooks

A client since 2010

Andy Peters has been invaluable in firstly combining several pension pots and then giving excellent investment advice. It has given us a great deal of comfort to know that our financial affairs are in such good hands.

James Guillum Scott

A client since 2014

I find my financial advisor easy to talk to and feel that she understands my lifestyle. She is always available for help when I need her and explains in words that I can understand.

Margaret Ena Glasgow

A client since 2000

Andy is a first rate Director, excellent communicator and leader.

Ross Perry

A client since

Black Swan Financial Planning and Andrew in particular, are very clever at working out how risk averse we are, and coming up with solutions that we feel comfortable with. We are happy in the knowledge that we can continue to enjoy a comfortable retirement. Andrew Peters is a very, very friendly person who is great to chat to and easy to deal with. He explains things very clearly in layman’s terms, and if we still don’t understand, he explains it until we do!

Alan & Jane Dyer

Clients since 2012

We have always found Rob [Young] to be very approachable and knowledgeable. We have every confidence in the advice given and feel comfortable with the decisions we’ve made. There are certain opportunities that we wouldn’t have known about if Rob hadn’t brought them to light, which makes the advice good value for money as far as we’re concerned.

Peter & Pauline O’Halloran

Clients since 2013

Rob [Young] is extremely knowledgeable. I knew nothing about the different types of trusts which will not only secure my income in retirement, but also leave a legacy for my children. I’m glad that I sought his advice when I did.

Sarah Wilson

A client since 2015

I am extremely happy with the service afforded to me by the company and my adviser Julie Cooper.

Geoff Coxell

A client since 2010

My wife and myself have been dealing with Black Swan for a number of years. We have met with different representatives from the company over the years and have found all very helpful in their own way. We met with James [Anderson] a few years ago and found him very helpful and knowledgeable. He keeps in contact with us on a regular basis. We find the Company information very helpful and we feel very secure with our finances.

Andrew Kirchen

A client since 2015

I have always found my adviser to be easy to contact, very professional in his approach, yet friendly and understanding. I have a sense of an experienced company behind him, really on the ball financially and with good standards.

B McBean

A client since 2011

Partner with the most reliable and experienced team of advisers

Enter your details & we'll be in touch to discuss your needs.
Alternatively, contact us directly and speak to a member of the team.

    Subscribe to our newsletter