Making financial decisions and arrangements can feel like a huge weight has been lifted; allowing you to relax and move on with your life. But the fact is that things can and do change and what might have been the right course of action even 12 months ago may no longer be the best thing for your circumstances.
So isn’t it time you showed your finances the love and attention they deserve?
Here are 5 instances that should trigger you to have a heart-to-heart with your financial adviser…
A change in financial circumstances
Many people may aim to set aside a certain amount each month or each year for pension savings, ISAs or investments. But any change in financial circumstances could mean going back to the drawing board on these figures.
For example, if your income is linked to the performance of a business (if you are a Director or if you are self-employed), the amount you are able to contribute into the various pots may fluctuate on an annual basis. This means that what was appropriate to set aside one year may be wildly different just 12 months later.
Receiving a windfall such as a pay rise or bonus may be welcome, but depending on your income, you could fall into a high earning bracket that has the potential to impact your tax-free income allowance, income tax bracket, or eligibility for other allowances, such as Child Benefit.
When weighing up the best financial plan for a client, age and earning capacity are two of the key factors. For example, a client that is within 5 years of retirement would probably want to consider increasing pension contributions if possible, whilst also potentially reducing their exposure to risk across their overall portfolio. However, a different approach altogether would be better for younger clients wanting to get on the housing ladder, who would probably be better paying a bigger proportion into an ISA so the funds are available when they need.
In short, your needs change with age and it is important to keep reviewing your arrangements so you can be sure you’re on track to meet the goals in your short, mid-term and long-term future.
A major change in your life
Taking the step of putting life insurance, income protection or other such policies in place is a really positive step. However, many people fail to amend their policy should their circumstances change. Taking on a bigger or additional mortgage, having children, divorcing or getting married are all circumstances that really warrant a review of your protection arrangements.
Changes in legislation
Sometimes it isn’t a change in your life that renders your existing arrangements unsuitable, but a change in external forces, such as amendments to legislation. Without the guidance of a financial adviser, it can be very easy for changes in legislation to pass you by.
A change in lifestyle and financial goals
As things change within your family set up, you may also experience a change in mindset towards your finances. Regardless of the reason behind the change in attitude, wanting to use your income or savings in a different way can mean shifting things around significantly within your existing setup. Leaving things as they are and maintaining the status quo could mean it takes much longer than necessary for you to reach your goals.
As Brits, we don’t always like talking about money. However, failing to allocate enough of your time to your financial affairs can mean you miss significant opportunities to either accumulate wealth or save tax.
Here at Gresham, we love talking about money – and in particular, helping clients maximise their opportunities to get, and stay, on track to attain their financial goals. To speak to one of our financial advisers, please get in touch.