Families have been urged to revisit their finances as the UK has gone into recession.
GDP fell for the second consecutive quarter in the final quarter of 2023, dropping 0.3 percent from October to December.
Karen Barrett, founder and chief executive of Unbiased, told Express.co.uk: “Whether the recession is likely to continue is impossible to predict, especially with the upcoming Spring Budget and General Election yet to be announced.
“If you’re worried about a recession, don’t worry, as there’s plenty you can do to prepare.”
She said the first step is to build an emergency savings pot and to clear any oustanding debts.
She explained: “An emergency savings pot will typically cover three to six months’ worth of expenses. Even if you can only put away a small amount each month, this can grow into a bigger pot over time.
“You should also make sure you have insurance in case the worst happens, whether it’s life, critical illness or income protection. An insurance broker can help you find the best insurance for your unique circumstances.”
Those building a pension are encouraged to keep up their contributions and not cut back, or they may have to change their retirement plans.
The expert said: “If you’re on a higher income and have disposable income, you could consider investing instead of a high-interest savings account to help you beat inflation and generate better long-term returns.
“And finally, if you have a mortgage, get a fixed-rate deal if you can, so you know what to expect. If your current deal expires in six months, you can secure a competitive rate now and switch to a lower one if it becomes available.
“You can find a mortgage broker via Unbiased who can help you find the best mortgage for your circumstances, while a financial adviser can ensure your money works as hard as you do.”
Iain McLeod, head of private client consultancy, St. James’s Place, also encouraged people to not lose tack of their longer term finacial goals.
He said: “Provided you have sufficient short term financial resilience, you should continue to save for your longer term goals, such as retirement.
“Whilst recessions in the economy are often accompanied by volatility in markets, the do move in lock-step. By continuing to save regularly, you can take advantage of pound-cost averaging which can help with longer term growth aspirations.
“In contrast, staying out of the markets during periods of volatility often means missing the best days when markets rebound – many people make the mistake of waiting for a rebound before reinvesting. If you are unsure, speak to a financial advisor.”
He said working Britons may also benefit from preparing for the potential event of losing their job, by reviewing and updating their CV and maintaining a good network of contacts.
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