With inflation slowing and interest rates falling, this year was meant to be the year for some easing of our costs of living. And then… war in Iran. Pension pots have taken a hit, mortgage rates are climbing and energy bills look set to rise. We know. It’s a lot.
Let’s walk through what’s actually happening in relation to your money and what, if anything, you should do about it.
Your Energy Bill
You don’t necessarily need to panic right now. The Ofgem price cap protects you from immediate spikes and it’s actually falling to £1,641/year for a typical household in April, staying there until the end of June. So if you’re on a variable-priced contract, your bills are going down in the short term.
However, analysts predict the cap could jump to £1,973 from July. That’s a meaningful increase, so it’s worth planning for now rather than being surprised later.
If you’re thinking about locking into a fixed tariff for security, know that suppliers have been pulling deals fast since the conflict began – 20 fixed tariffs disappeared in the first few days alone.
Fixed deals can also be good for budgeting consistency and remove anxiety of “the unknown”.
Use a price comparison website to shop around and see if there’s a good deal for you to hop on to.
Your Mortgage
If you’re on a fixed deal, you’re protected from volatility for now – but average two-year fixed rates have jumped from 4.83% to 5.43% since the start of March. Five-year rates aren’t far behind.
If your fix ends in the next six months: Start shopping now. Many lenders let you lock in a rate up to six months before your current deal ends – and if rates improve before you switch, you can usually still change to a better deal. Being proactive here could save you hundreds.
If you’re looking to buy: Keep a close eye on rate changes. The market is moving quickly right now.
If you’re unsure at any point, speak to a regulated mortgage adviser who can help you navigate times of uncertainty in a way that meets your needs.
Your Investments
Markets have fallen since the conflict began – the FTSE 100 is down over 9% and the S&P 500 down around 4.4% since late February. Even gold, usually a safe haven, has dropped.
We know seeing your portfolio in the red feels awful (Financielle Founder Laura shared her net worth drop here). But here’s the thing: investing is a long game, and this is not the moment to make big moves.
The advice from wealth managers right now is consistent: check that your investments are diversified across different countries and asset types, and then do as little as possible. If the reason you’re invested, the timeframe and your attitude to risk haven’t changed – short-term volatility alone is rarely a reason to sell up.
If you do have money you’re confident you won’t need for years and you have capacity to invest more, market dips can be a genuine opportunity to buy assets at a lower price. But only with a long-term view and money you can afford to leave alone. Remember, with investing your money is at risk and you can end up getting back less than you contributed to your investments.
Your Pension
Now we’ve covered investments generally above, but many are also worried about the impact the war will have on their pension and retirement plans.
How worried you need to be about your pension depends almost entirely on how far away retirement is.
10+ years away? Try to relax. Losses now can actually work in your favour – lower prices mean your regular contributions buy more, which can boost your returns in the long run. Keep contributing, don’t look too often.
Closer to retirement? Many pension providers will have already “de-risked” your pot as you’ve got nearer to retirement age – gradually shifting you from higher-risk stocks into more stable assets like bonds. If you’re not sure whether yours has, it’s worth checking with your provider.
Very close to retiring or already drawing down? Now is the time to review – not to panic. If you were planning to buy an annuity and your pot has dipped, your purchasing power has gone down. If you’re drawing down flexibly, you might consider reducing the amount you withdraw while markets are lower, or delaying access slightly if that’s possible for you.
The key for everyone: don’t make snap decisions. Markets have recovered from every crisis they’ve faced. Yours can too. 💛
Your Action List
✅ Energy: Note the July price cap review in your diary and budget for a potential rise. Look into tracker tariffs if you want a deal.
✅ Mortgage: If your fix ends within six months, start comparing rates now.
✅ Investments: Check you’re diversified. Then close the app.
✅ Pension: Check how your pot is invested and whether it matches your timeline. If in doubt, call your provider or speak with a financial adviser.
✅ Budget: Do a quick stress-test – what would an extra £50 to £100/month on energy and fuel mean for you? Better to plan now than scramble later.