Planning For The Future - A Simple Financial Guide
Updated: Sep 30
Planning For The Future
Nowadays, and more than at any time in the past several decades, having an accurate financial plan will give you a safer roadmap towards a more comfortable life ahead.
As we head out of lockdown, and start navigating a highly volatile economic landscape, now’s the time to start planning for the future. Regardless of your current situation, it’s time to take stock of your financial position and to re-evaluate any plans you may have previously made.
However, if you want to create a realistic plan for your future, then this goes way beyond a number-crunching exercise. If you want to put a financial plan in place that will provide you with a solid foundation for years to come, then you need to look at your current lifestyle and any future aspirations.
The current Coronavirus crisis may have changed your perspective of how you wish to continue living your life; this simple guide offers a helpful starting point.
Has your situation changed?
Life is constantly changing, regardless of pandemics. You may have had change forced upon you, such as redundancy, divorce, or the loss of a loved one. You may have decided to make a big life change through personal choice after a period of self-reflection.
Any major life change is likely to have a long-lasting impact on your financial stability, therefore, careful attention needs to be paid to the potential consequences. Do you fall into one of these areas?
You are financially independent but are facing a change in circumstances that may affect your financial plan. If so, you may need to rethink your current strategy.
You have been dependent on someone, but that person is no longer in your life. If this is the case, you need to think about your income and how well you are protected.
You are financially stable, but you have made a big life change and have dependents, such as children, or caring for an older or vulnerable relative. If so, you may need to consider their care needs and costs into your plan.
Firstly, consider your current lifestyle, and where you want to be in 5, 10 and 15 years from now. Factor in any potential future outgoings, such as a child’s university fees or your own care costs.
As a guide, our financial advisers would compare different scenarios - from catastrophising, to looking at when/how you could become financially free – based on income projections and other factors.
When did you last check your Pensions?
As well as assessing your current income, an in-depth pension review will give you an idea of the level of income you can expect to live on when you retire.
According to HMRC*, there was an increase in people withdrawing from their pensions in Q2 2020, which is thought to relate to the impact of COVID-19. In some cases, people are making use of their “pension freedoms” by fast-tracking their retirement plans and leaving employment sooner.
When did you last have a Mortgage Review?
If you’re looking to move house, or you’re considering remortgaging your current property, then it’s important to use an independent mortgage broker, if you want to find the right deal. At the time of writing this article, the government has introduced a “stamp duty holiday” until 31 March 2021*, as a housing market stimulus.
As a firm, we have seen a steady increase in mortgage-related enquiries, which may be a direct result of this temporary tax relief. We also have a number of experienced mortgage advisers who are fully up to date with these new measures.
When did you last review your Investments?
There’s no doubt that when it comes to the stock market, there’s a lot going on right now. Rising stocks, investments in gold, and crashing economies are creating a colourful world for investors. But there’s always opportunity in a crisis.
When did you last carry out a review of your Estate?
Over the past few weeks, our firm has also seen a steep rise in the number of estate planning enquiries. By understanding the current and projected value of your estate, you will be able to arrange a suitable level of protection to ensure you are safeguarded should the worst happen. You will also be able to plan more effectively for Inheritance Tax (IHT), thus protecting your family from any potentially nasty and costly surprises.
Your “estate” comprises any property, valuable possessions (art, antiques, jewellery, watches, etc), money and investments, vehicles and any business interests, which are known as your “assets”.
If you haven’t had an estate review for some time, then it’s worth arranging one with our team. We are happy to answer any queries regarding estate planning, and will also be exploring the area of estate planning in more detail in our September blog article.
When did you last update your Will?
Once you have clarity on your estate value, you will be able to either update it or write an accurate Will. If you want to ensure that your assets go to the right people, then you must have a legally binding Will in place.
Without one, you will have died “intestate”, meaning that intestacy laws will determine how your estate is distributed after you die. It may also prove more tax efficient to add a Trust to your Will, which could offer your family some extra protection. Our team are on hand to help with any inheritance tax queries.
You should always seek advice from a qualified financial adviser to assist you with any reviews of your estate, pensions, mortgages, investments and Wills.
If you would like to create a realistic financial plan to safeguard your future, then please get in touch today.
*All dates/figures correct as of 13 August 2020.