Personal Finance in a Downturn by Gareth Flanagan

From pensions to mortgages and savings to insurance - difficult economic times impacts on every aspect of personal finances. Now, more than ever is the time to keep a close eye on your money and get the best possible advice.

Here are just a few of the points you should be considering:

Your Mortgage

If you have an existing mortgage, the most obvious change that you will have noticed is the rapid fall in interest rates. As the base rate falls to nearly zero, it can have an enormous impact on your monthly payment. If you have a tracker mortgage, then this is great news as your monthly payments will be falling. If you are paying a tracker mortgage then the option of overpaying your mortgage is worth considering - saving yourself thousands in interest and protecting the equity in your home as house prices continue to fall.

If you have a standard variable rate mortgage, then chances are you will not have seen such a huge change in your monthly mortgage payments as most banks have not passed on the entire fall in interest rates. If you have a fixed rate mortgage deal then you're out of luck.

If by chance you are looking for a mortgage, or a remortgage, then it's a good idea to take professional advice as to what type might be the most suitable for you. As interest rates can't really go much lower, a fixed rate might be a sound idea. Of course, that assumes you can get one. As the banks are much more hesitant to lend, having access to the whole of the market through an independent financial adviser is key.

Your Pension

Pension funds have been hit by falls in the stock markets - affecting how much money you will have available in retirement. Depending on how far away from retirement you are, you might consider moving your pension fund or investing in other kinds of investments. Again, good retirement planning (and quality advice) is key.

Your Savings and Investments

If you are a saver rather than a borrower, falling interest rates are obviously bad news. It may be worth looking at alternatives to simple savings accounts as a way of maintaining the value of your savings. Investments in gilts, bonds or even stocks and shares could potentially provide you with better returns - although again, your individual circumstances will have a big part to play.

It is also important that you make the most of any ISA allowances you may have, as even though returns may be low, there's no reason to pay more tax than you have to.

ASU Insurance

Hard economic times can often lead to unexpected company closures or redundancies. Accident, sickness and unemployment insurance (ASU cover) can help ensure that the bills still get paid even if you are made redundant. It's certainly something worth considering.

Whatever your own personal situation, the more challenging the economy becomes the more attention you need to be paying to your personal finances. You cannot afford to sit back and assume that your pension fund is on track or that your investment ISA is giving you the best possible returns. However, provided you get the best advice and have access to the whole of the market, you can make simple changes to ensure that your personal finances weather this economic storm.