Wealth update – 31/03/2020

The markets are now closed and I have updated all of my portfolios (see my Wealth page for details). Unsurprisingly, March has been a negative month.

The only things which increased were my cash holdings and my pension. This is because I topped up my cash from my salary and sacrificed my bonus into my pension. All of my investments have lost money across the board – however, I kept my EIS valuations the same as last month as these are illiquid and it’s not possible to get a market value.

Not only did I get a bonus, but also a tiny 1.8% increase to my base salary – this, I presume, is to keep my salary in line with inflation (CPI is 1.7% right now based on Bank of England’s website). Better than nothing I presume and it’s always nice to see an increase in my earnings. My net salary will increase a tiny bit from next month as well as HMRC announced an increase in the national insurance bands. So, this has been a modest improvement.

However, my rent has increased by 4% and council tax has increased by 3.5%. These two largely negate the increases in my earnings.

I also switched my mobile service provider as I found an even better SIM-only deal than I previously had. Now, I’m saving a fantastic £1.05 p.m. on my mobile phone bill – I only pay £4.95 p.m. and get 2 Gb of data plus calls and texts, which have some limits but I hardly ever call anyone – and when I do I use WhatsApp. #Millennial The saving is small but still worth doing.

Next week, on 6th April, the new tax year will start. I plan to top-up my LISA with £4,000 from my current cash and invest it. Once the £1,000 LISA bonus is paid in (this will probably take 6-8 weeks), I’ll invest that as well. I’m going to hang on to my GIA monies for a bit as the market is very volatile and I don’t want to move it to my ISA just yet (as that would require a sale in the GIA and then buying it back in the ISA and maybe a few days of being out of the market). I will fund the ISA with my GIA later in the year when things have calmed down a bit.

I also started an application for critical illness insurance. However, the insurer needs to get a medical examination and a GP report, which are difficult to obtain during times of a pandemic. This is delaying things, probably for a couple of months. I estimate this to cost about £45 p.m. once it’s set up (I’m applying for a £100,000 critical illness sum assured with £100,000 of life cover to age 70, where the sum assured increases with inflation).

Why am I getting critical illness cover? Well, to cash in if I get cancer or some other horrible illness. For example, 1 in 2 UK people will be diagnosed with cancer in their lifetime – so if this happens before my age 70, I will get the sum assured and treat myself. The £100,000 figure is sort of random as I didn’t really know how much I need – on the plus side, I’m able to increase it during certain life events e.g. buying a home, having a child – without any need to do any further medical checks (but I will have to pay more each month to reflect the larger sum assured). So I’ve got some flexibility.

I find paying £45 p.m. quite expensive for £100,000 of cover, but the fact is that I’m not getting any younger. The later I leave it the more expensive this will become.

My girlfriend (24 y.o.) got the same insurance policy (but with a 40-year term as it’s more than 40 years for her to reach age 70 and the maximum term was 40 years). She was accepted without the need to provide any medical tests or GP reports and got the policy on the same day as we applied for it. I think it cost about £28 p.m. for her, I’m not sure. Oh… to be young…

And that was the month of March 2020.