May is the month of bank holidays, and there’s a lot we can learn from taking time off. Holidays are important for our wellbeing, allowing us to take a break and recharge. It’s also an opportunity for us to reflect without the busyness of our daily working lives. We look at the evolution of bank holidays in the UK and the parallels between financial planning.
Today, in England and Wales, we currently have eight official bank holidays (Scotland varies). These include Christmas Day, Boxing Day, New Year’s Day, Good Friday, Easter Monday, the first and last Mondays in May, and the last Monday in August. We also have additional bank holidays sometimes to mark a special occasion such as the monarch’s jubilee. So, what are the origins of bank holidays?
Origins of bank holidays in the UK
The concept of a ‘bank holiday’ originates from a banker and politician called John Lubbock, who was also the first Baron of Avebury. An eccentric character famed for reportedly trying to teach his pet poodle to read, Lubbock introduced the Bank Holiday Act. Previously, at least 33 days were taken off by some public offices to celebrate various occasions such as saint’s days, Christmas and Easter. By 1834, public holidays were reduced to just four days.
The Industrial Revolution led to a trend for factory shutdowns, which can still be seen in some parts of the UK today. In 1871, the Bank Holiday Act was introduced to ensure that businesses could legally close on specific dates. It also ensured that banks could postpone their financial activities until the following day without the fear of penalties or bankruptcy.
Originally, legal bank holidays in England and Wales included Boxing Day, Easter Monday, the last Monday in May (Whit Monday), and the first Monday in August. In Scotland, the days differed, and included Christmas Day, New Year’s Day, Good Friday, the first Monday in May and the first Monday in August.
Over the years, these bank holidays were combined and changed, although Scotland still has variances. In 1971 the August bank holiday was officially moved to the end of the month to prevent it clashing with factory shutdowns. Traditionally, many manufacturing companies closed for the first two weeks of August, so this ensured everyone could enjoy equal time off.
Adapting your financial plans
There are parallels between the evolution of our UK bank holidays, and how our financial planning must also adapt over time. By using bank holidays as a moment to reflect on your financial plans, you can also ensure they remain relevant in a changing world.
Below are some ways you can carry out a financial review:
- Have your objectives changed? It’s common for people to create a financial plan based on a 5 or 10-year view of how they intend to live. However, life changes, and unexpected events can have a big impact on our goals. Revisit your life vision and decide whether your financial plan needs to be updated.
- Do you need to adjust your spending? If you have a large outgoing coming up, for example, you might need to make changes to your financial plan. Cash-flow planning can help you plan ahead for major life events, from funding your children’s education to your future retirement income.
- Are your savings tax-efficient? It’s worth spending time assessing whether your money is in the right type of savings account in terms of tax efficiency. There are various ways to save and different strategies, including tax-free ISA accounts.
- Do you have a well-diversified investment strategy? If you have investments, your portfolio might perform better with a mix of different asset classes, which also helps to protect from market volatility. If you don’t have any investments and you want to understand more, just speak to our financial planners.
- Are you making high enough pension contributions? Check whether you need to increase your pension contributions to achieve the retirement income you desire. There might also be tax relief opportunities available through your contributions.
- Have you considered inheritance tax? Effective estate planning should form a key part of your financial plan. This will help you to build and protect your legacy for future generations.
We recommend reviewing your financial plan on a regular basis to make the necessary changes to help secure your financial future. Why not carry out a spring clean of your finances? Read our blog Spring ahead with a seasonal financial review for guidance.
Chartered Financial Planner, Nottingham and Lincoln
Everyone loves a long weekend, but why not take a moment this May bank holiday to reflect on your financial plan? Will it still support your current lifestyle and your desired retirement? Do you have a big life event coming up that requires changes to your existing financial plan?
At Balance: Wealth Planning, our financial planning team can carry out a financial review to give you clarity on your existing plans. We can advise you on suitable tax-efficient strategies for your savings, investments and pensions, as well as different forms of protection. And if you don’t already have a financial plan, we can create one that both protects and makes your money work harder for you and your family.
If you need a financial review, get in touch to speak to our financial planning team.
